Things come in threes – Paris Tribunal guts Facebook’s T&C’s

Readers may recall the recent decisions of the Paris Tribunal, which nullified significant portions of Twitter’s and Google’s terms and conditions on the basis of French privacy law, data protection, contract and copyright law (see here and here for previous posts).

Proving that all [good ?] things come in threes, the Paris Tribunal turned to the terms and conditions of Facebook in a decision handed down on 9 April 2019 (decision: Paris Tribunal (Tribunal de Grande Instance), UFC-Que Choisir v Facebook Inc. (9 April 2019), see here for the decision in French). 

Before going any further, it is worth noting that Facebook modified these documents between the start of the proceedings and the publication of the decision by the Paris Tribunal. The edited and current version of Facebook’s terms is reported to address some of the issues raised in Tribunal’s decision (here). In fact, the European Commission praised Facebook for editing its terms and conditions on the very day the decision of the Paris Tribunal came out (here). However, and as discussed below, these changes do not affect clauses related to copyright. Unless Facebook appeals the decision and wins on appeal, this Paris Tribunal decision will send Facebook back to the drawing board for a second rewrite of its T&C’s. Read on. 

The legal proceedings and clauses in dispute

As in the Twitter and Google cases, the proceedings were brought by the French consumer association “UFC Que Choisir?” (UFC). UFC applied to the Paris Tribunal that Facebook’s terms be declared unlawful under French privacy law, data protection regulation, contract and copyright law.

In total, the Paris Tribunal reviewed 436 clauses, 430 of which were declared unlawful. These 436 clauses span three different versions of Facebook’s terms and conditions (dated 15 November 2013, 30 January 2015 and 9 December 2016, respectively). Facebook’s terms are contained in four different documents : the “Statement of Rights and Responsibilities” (SSR) (“déclaration des droits et responsabilités”),the “Data policy” (“politique des données”), the “Community standards” (“standards de la communauté Facebook”) and the “Cookies policy” (“Cookies, pixels et technologies similaires”). The transfer of copyright for user-generated content is covered in Clause 2.1 of Facebook’s SRR document.

In its 2015 and 2016 versions, Clause 2.1. of the SRR read:

2. Sharing Your Content and Information

You own all of the content and information you post on Facebook, and you can control how it is shared through your privacy and application settings. In addition:

1.    For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it. 
(Facebook’s official version, here)

Arguments of the parties

UFC brought a claim based both on French copyright law and French law of contract, arguing that Clause 2.1 breached provisions of the Consumer Code (CC) and the Intellectual Property Code (IPC). Here are its arguments.

(a)  They submit that the user agrees to the transfer of his/her copyright, without limitation, with no obvious benefit conferred by Facebook in return. As such, UFC claims that the burden of the parties’ respective contractual obligations was disproportional (i.e., it lacks adequate consideration) in favour of Facebook and as such should be struck out as an unfair contract term in accordance with consumer law.

[NB to readers: In principle, French contract law does not regulate the consideration given by the parties to a contract. However, this principle is subject to numerous exceptions, one of which concerns business-to-consumer (B2C) contracts, as it is the case here. In a B2C contract, the judge may invalidate any contractual clause whose terms disproportionately favours the business side by imposing onerous obligations on the consumer. This protective measure is provided by the CC (Article L.132-1, para 7), which implements Directive 93/13/CEE of 5 April 1993 (Article 4 para 2). It is worth nothing that this exception applies only to terms and conditions that are ancillary to the contract, such as liability, arbitration or choice of jurisdictions.

As such, it cannot apply to clauses which go to the heart of the contract. Such clauses are determined on a case-by-case basis.Typically, for a contract of sales, clauses related to the price and the main features of the goods will be regarded as core to the agreement. In the case of a contract for the speedy delivery of goods (e.g. with Fedex) clauses related to the price, the service of delivery and its timeliness will be regarded as going to the heart of the contract, whereas the core of an ordinary delivery agreement will typically be the price and service delivery. Now back to IP…]

(b) UFC considers that Clause 2.1. transfers copyright in user-generated content to Facebook without specificity or limitation. In support of their argument, they note that the clause allows Facebook to use the content even after it has been deleted or the account has been closed, by the user. The claimant points to the requirement under the copyright law that a transfer of copyright (assignment or licence) be specific regarding the copyright work at issue, the rights conferred, and the types of use allowed by the author of the work. To be valid, a transfer must also indicate the length of its duration. Importantly, the IPC prohibits blanket transfers of rights for future works (see (Article L 311-1 and following).

Facebook countered with the following claims:

(a)  The clause does not breach the provisions of the CC on unfair contract terms because the obligations in the license are not disproportionate. In their view, this proportionality rests on the fact that Facebook seeks a non-exclusive licence rather than a full assignment of the rights for the copyright in user-generated content. In support, they point to the preamble of their terms and conditions, which declares that a user remains the owners of its own content [Twitter’s and Google’s spun the same line in their respective cases, see here and here].

(b) The provisions of the CC on unfair contract terms cannot be applied to this particular clause because the latter goes to the heart of the contract (referring to the concept of the “object of the contract”, a component of consideration in French contract law). Facebook submitted that it is the core of their service to enable the publishing and sharing of user-generated content. Clauses covering the question of copyright in the content are thus essential to that service. Accordingly, clauses dealing with the transfer of copyright form part of the object of the contract, which cannot be subject to the general principle of judicial scrutiny under the consumer protection law.

Decision of the Paris Tribunal

The Paris Tribunal addressed  the respective pleadings of the parties in Section 4 of its judgment. The Tribunal’s reasoning consists of three points:

(a)  The main object of the service provided by Facebook, and therefore of its contract with users, is the provision of “social media networking” (“service de réseautage social”) services, which makes it possible for users to interact with their contacts, create groups around common interests and share content with other Facebook users. This object is distinct from the purpose of the clause, which concerns the transfer of copyright in user-generated content. As such, Clause 2.1 of the SRR may, in accordance with consumer protection law, be subject to judicial scrutiny.

(b) Taken as a whole, Facebook’s terms and conditions on user-generated copyright content are unclear and confusing. Clause 2.1. fails to define with enough specificity the scope of the free, world-wide, non-exclusive licence granted to Facebook. The Tribunal stresses the fact that Facebook gives its users the possibility of terminating the licence by deleting the content from the platform or by closing their account. At the same time, the clause provides for significant caveats, whereby Facebook will not be bound by the termination of the licence (when the content has been shared by others or back-up copies have been made by Facebook, both of which are common and highly likely to occur). This, the Tribunal argues, gives too much leeway to Facebook to ignore the effect of the termination, because frequently content will have already been shared by users and thereby saved by the company for back-up purposes. Thus, the Tribunal holds that while the clause gives the impression that users have a right to terminate their licence, in fact, the termination will often have little effect in practice, and their content will continue to be used by Facebook. The fact that the company does not make this clear in the clause contributes to the contract’s lack of clarity and specificity.

(c)  Considering the points made above, the contractual obligations between Facebook and their consumers regarding the transfer of copyright are significantly disproportional. In securing the free, world-wide, non-exclusive licence without clarity on the scope of its application, Clause 2.1. of the SRR document constitutes as an unfair term within the meaning of the French Consumer Code and 1993 Directive, and thereby breaches the provisions of IPC mentioned above.

On the basis of the foregoing, the Tribunal concludes that this provision is null and void and thus unenforceable by Facebook.

What now?

As mentioned above, Facebook has already addressed [some!] of the issues noted by the Paris Tribunal in this decision. However, none of these changes concerned the licencing of user-generated content. The new version of Facebook’s SSR, now called “Terms of Service”, is identical in substance to the clauses struck out by the Paris Tribunal on 9 April 2019 (see here for the English version). 

As with the Twitter and Google decisions, we will have to wait and see how Facebook proposes to respond to the Tribunal’s order to change their contractual terms. Again, it is possible that this social media platform will appeal the decision, although one wonders whether a court of appeal will overturn what appears to be a straight-forward application of French law (and which the Tribunal has now affirmed three times).

Concluding remarks made in relation to the Twitter and Google (here and here) decision also apply to this case. Going forward, Facebook will have to be granted a licence as users upload their content or use their services for the company to lawfully secure the right to reproduce user-generated content. In the context of Facebook’s services, this could involve prompting consumers to sign off on their rights as they post or upload new content. This seems more feasible for Facebook than Twitter or Google, because the platform already invites or prompts users to “tag” information “in” their posts (e.g. disclosing their own physical location at the time of posting or the identity of others featuring in their photos and videos). Can the same technology be extended to sign away copyright? Maybe…

Images are in the public domain.