Posted by: N.S. Palmer | February 19, 2009

Facebook’s About-Face

By N.S. Palmer, Ph.D.

The online social networking site Facebook recently changed its terms of service to give it more control over users’ personal information. After a widespread uproar on the Internet and in traditional news media, Facebook rescinded its policy change and returned to its old policy.

Facebook’s terms of service are an instance of a more general problem that consumers face in dealing with giant corporations. Who has enough time to read every 25-page legal document in fine print and impenetrable jargon from the credit card company, the insurance company, the cable company, the bank, and the countless other corporations that dominate our lives?

When a corporation buries abusive clauses at the bottom of page 17 and puts them in deliberately obscure language, how are consumers supposed to cope with that?

When corporations spend hundreds of millions of dollars studying language and psychology to find better ways of manipulating and deceiving their customers, how are consumers supposed to cope with that?

They can’t. Corporations count on it. The practice even has a name: it’s called “gotcha capitalism.”

Only strong regulation, carefully and thoroughly enforced, can level the playing field between consumers, workers, and corporations.


Copyright 2009 by N.S. Palmer. May be reproduced as long as copyright notice and URL (http://www.ashesblog.com) are included.


Responses

  1. And of course, the regulation should be written in the same Sir Humpreyesque legalese… 🙂

    • A good point. Yes, you’re right. The regulations would have to be detailed, specific, and often adapted to the particular industries they covered.

      However, corporations have legal departments whose full-time job is to stay informed about such things. As a result, their situation is not comparable to that of individual consumers.

  2. It makes no sense that Facebook would risk messing up a good thing by edging in on people’s intellectual property. They had people’s trust and then they go and risk losing it; not smart.

  3. I agree with you in principle, but it was public outcry that got Facebook to rescind the new policy.

    Dealing with corporations these days is like ducking bullets from an automatic weapon. Their abusive policies come at you in such great numbers and from so many different directions that it’s impossible to detect, let alone avoid, all of them. That’s how the practice works. Even to read every terms of service agreement and amendment that corporations fire at you would be practically a full-time job. And if you don’t agree with some abusive provision, what can you do about it? Competition has been replaced by oligopoly and monopoly.

    One of the most horrific examples of corporate abuse is biotechnology companies’ use of their terms of sale agreements to prevent any independent, unbiased research into the safety of genetically-engineered crops: see the New York Times article here: http://www.nytimes.com/2009/02/20/business/20crop.html.

    Without strong government regulation, corporations by their nature will act like psychopaths: see the book “The Corporation” for a good history and analysis: http://www.amazon.com/Corporation-Pathological-Pursuit-Profit-Power/dp/0743247469/ref=sr_1_1?ie=UTF8&s=books&qid=1235327264&sr=1-1.

  4. “Without strong government regulation, corporations by their nature will act like psychopaths…”

    You know, a lot of people treat that as hyperbole but there’s real truth to it when you think about it. Huge, almost unbridled power, united to intelligence with no accountability and no one responsible for providing it with a conscience. And then people want the government to get off the backs of big business. They should really sit back and think about what they’re asking for.

    • It’s literally true. When Nobel laureate economist Milton Friedman wrote that “the social responsibility of business is to make profits,” I think he assumed that corporations would still abide by standards of decent human behaviour. He was wrong. Because of the way they are set up as institutions, corporations are designed to pursue profit at the expense of all other values. Some corporations, under the leadership of morally enlightened top management, do follow a better path. However, their incentives discourage them from acting decently and encourage them to act without conscience. Sooner or later, the incentives tend to win.


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