Radical Reforms

Contents

Catalina Goanta, Marlene Straub, Jacob van de Kerkhof

Foreword

Laura Aade

The Invisible Contract: Rethinking the Principle of Informality on Social Media Platforms

Omri Ben-Shahar

Personalised Law and Social Media

Sunimal Mendis

The Magic Bullet That Isn’t!: The Limited Efficacy of Article 14 DSA in Safeguarding Copyright Exceptions to Quotation and Parody on Social Media Platforms

Mateusz Grochowski

From Contract Law to Online Speech Governance

Hans Christoph Grigoleit

Digesting the (Not So) Free Lunches of Social Media: Dark Patterns and Party Autonomy

Vanessa Mak

The Contractual Rights and Obligations of Prosumers on Social Media Platforms: Recognizing Use Value

Niva Elkin-Koren, Ohad Somech, Maayan Perel

A Non-Binary Approach to Platform-to-Business Transactions

Chantal Mak

Data After Life: The Protection of Users’ Development of their Digital Identity

Christoph Busch

Pay to Play: Social Media Meets the Subscription Economy

Johann Laux

The Shape of Personalisation to Come: Whether Done in the Interest of Consumers or Traders, Personalisation Requires a (Platform) Governance Perspective

Giovanni De Gregorio

Monetising Harmful Content on Social Media

Felix Pflücke

Rethinking the Regulation of Financial Influencers

Title Page

Table of Contents

DOI 10.17176/20230717-124837-0

ISBN Print 978-3-758476-25-9

ISBN eBook 979-8-224511-83-9

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Contents first published on verfassungsblog.de.

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Cover design by Carl Brandt

© 2024 belongs to the authors

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Edited by

Catalina Goanta, Marlene Straub & Jacob van de Kerkhof

Radical Reforms

Bringing Fairness to Social Media Contracts

Foreword

In a constant search for new ways to generate revenue, social media giants are transitioning from business models that have largely been focusing on (targeted) advertising, to capitalising on the social transformation of influence. In these new ecosystems monetizing attention and parasocial relations, traditional contractual relationships are altered in ways we do not yet fully grasp. Gratuitous contracts with payment as counter-performance coexist with cascading new digital services around subscriptions, tokens, micro-transactions, and other forms of monetization that allow social media platforms to rely less on advertising business models.

The Verfassungsblog Radical Reforms symposium is based on the presupposition that the social media landscape is changing. Coined as the new public forum (see for example Packingham v North Carolina¹, also Pozen’s The Perilous Public Square), we see that that public square is now filled with citizens selling products, promoting services, and charging for subscriptions. Simultaneously, the owner of the square is incentivising attention-seeking behaviours (also known as clout-chasing). In that changing landscape, a regulatory quest for fairness manifests itself. How can a space that is becoming increasingly commercialised, monetised, and is a source of income for many be fair?

Departing from this foundational question, this symposium pursues many more granular ones, each anchored in whether and how the rights of users in social media spaces can be strengthened vis-à-vis dominant platforms. One point of departure are the standard agreements that users conclude when joining social media; does the extant contract law paradigm sufficiently protect the user online? Centrally, a division emerges between the average user and the so-called influencer. Some user groups who generate content and, in turn, income, may demand their share in a fair division of value. But in the pursuit of attention, clout, and eyeballs, not every means of surpassing minimum thresholds necessary for generating income may be desirable from a societal point of view. Indeed, as society is gradually enmeshing real with virtual, the dynamics of the privately owned, increasingly commercialised virtual world can skew how information is shared and spread to the average user. Can social media contracts contribute to making the status quo bearable for society at large, and fair for average users and influencers on the personalised level? In the end, the sum of these questions all boils down to power: Who gets to decide on the digital landscape, and with whose interest in mind should that decision be made?

Against an increasingly complex background, even basic questions relating to the expectations of parties (especially consumers) to social media contracts, or the nature and content of their performances, threaten existing legal doctrines and fundamental principles aiming to alleviate the imbalance of power in these transactions, such as fairness, good faith or unconscionability. So what if we rethought social media contracts in a radical way? What values should we prioritise in the relationships between users and social media platforms, and how can they be facilitated? This symposium invites its participants to rethink social media contracts, whether based on insights from technology, behaviour and/or legal doctrine, to map and address the inherent vulnerabilities of this space and the individuals affected the most therein.

What About Rights?

The idea of fairness online can be assessed from the perspective of rights and obligations. Users and platforms have rights and obligations toward one another. If those rights are violated by either, the violation causes a change in the relationship. But in defining rights and obligations, the question of what legal sources those rights should arise is a first stumbling block. In this context, Laura Aade reflects on the absence of formalism when concluding contracts with social media platforms. Conceptually, there is a big distance between clicking yes on a clickwrap agreement, versus putting your signature under a physical contract, although the contractual relationship exists either way. The predicament of informal social media contracts compounds, as the wording of their standard terms is moving towards increasingly oversimplified and (potentially) legally meaningless fluff. The consequences are a threat to the establishment of a fair contractual relationship between platforms and users.

Social media users’ rights and obligations are currently laid down in a uniform manner: the same rules apply to all users, whereas not all users use the multifaceted social media space in the same manner. In Omri Ben-Shahar’s contribution, reflecting his recent book with Ariel Porat, he explores how social media data can serve to inform more granular, personalised contracts, and immediately qualifies its utility: the behaviours displayed online generate a data profile which is not suitable to inform contracts in areas requiring deliberate choices, informed by individuals’ real preferences. Rather, on social media, the surrounding choice architecture drives individuals and manipulates them to forge gut responses based on instantaneous emotional allure. The implication for personalised social media contracts is that the data source informing granularity may be inappropriate, if not deliberately skewed.

Delving into other rights, such as intellectual property and copyright, it is doubtful where fundamental rights, such as freedom of expression, stand in contrast to rights which are primarily commercial in nature when pursued on social media. This is what Sunimal Mendis explores in her contribution, reflecting upon the tension between platform power and the possibility of imposing obligations on social media to safeguard their users’ rights to rely on quotation and parody exceptions.

Meanwhile, when a social media user qualifies as a consumer, they can rely on consumer protection frameworks vis-à-vis platforms. It remains the subject of debate to what extent a social media platform is responsible for offering such protection to consumers against third parties. Drawing on the horizontal effects doctrine, introducing the need to interpret fundamental rights in some private relationships, Mateusz Grochowski’s contribution portrays freedom of speech on social media as a consumer service. In the provision of this service, tensions may arise between the Digital Services Act’s holistic approach to standard terms and the existing unfair terms protection that requires a case-by-case analysis, in that it may bifurcate enforcement. Hans Christoph Grigoleit notes in his piece that the existing legal frameworks on contract law and consumer protection are already enabled to curtail many of the excesses of the use of social media, such as dark patterns, unfair contracts and addicting features. The question is whether another regulatory reform is likely to yield any improvements in the quest for fairness.

Contrasting this viewpoint, and singling out the content creator, or prosumer, Vanessa Mak critically reflects on the need for a regulatory framework that would enable content creators to reclaim power over their creations from the hand that feeds them; Big Tech companies monetize prosumers’ content. While extant consumer law frameworks may protect from disempowerment, true fairness and a recognition of prosumers’ use value would require a deeper evaluation of the ways in which contract law views economic exchange.

Equally important for this understanding is the angle of business users, who often suffer from the same unequal bargaining position towards platforms as their own consumers. Focusing on platform-to-business (P2B) transactions, Niva Elkin-Koren, Ohad Somech and Maayan Perel emphasise the contractual lens for addressing the rights of businesses in P2B transactions: Contract law has the potential for greater sensitivity to contract classifications because different types of contractual relations invoke different values and trade-offs. Courts can better posit them in the spectrum between business and consumer contracts while securing business users’ unique interests.

What About Value?

More than ever, value is created on and through social media spaces, causing a pressing need for radical reform, as already touched upon by Vanessa Mak’s contribution. At the most basic level, users create value by sacrificing data and attention in order to use social media platforms. Johann Laux contemplates whether the application of that data and attention to the creation of personalised law can lead to a fairer use and provision of social media. This depends on the interests such personalised law seeks to serve; if personalisation serves the interest of advertisers, as it currently does, we are simply postponing solving the inequitable problems private platforms cause, creating the future’s future problems. Beyond the exchange of intangible data and attention, users increasingly pay monetarily to use social media platforms, across a spectrum