Note to CEOs of Web Ventures: Know Your Own Terms of Service

Don Tennant

If you don't abide by the terms of service of an online service provider, you're setting yourself up for a legal hassle. But what happens when the provider itself doesn't abide by its own terms?

 

That's the question that has arisen following my recent interview with Alex Edelstein, co-founder and CEO of crowdsourcing service startup CloudCrowd. In my post, "Taxation, Immigration Laws Need to Catch Up with Crowdsourcing," I noted that CloudCrowd provides its service by means of a Facebook app, and that Edelstein saw no problem in users falsifying their identities when they sign up. In his words:

In general, people are already members of Facebook, or even if they don't like Facebook, they can create a separate identity on Facebook for purposes of working on the [CloudCrowd] system.

That seemed kind of strange, and in my post I raised the issue of the income tax implications of a system that allows falsification of workers' identities. Having that issue raised in a public forum apparently caused some angst at CloudCrowd, because a week later Mark Chatow, CloudCrowd's vice president of marketing and business development, posted this comment on my blog:

CloudCrowd has the same provisions in its worker agreement that Amazon has, and requires that workers provide accurate information when registering. They are also in compliance with IRS requirements that companies submit 1099s for any contractor who earns $600 or more.

Chatow was referring to Amazon's Mechanical Turk, a much more established crowdsourcing service. As it turned out, when Chatow said CloudCrowd has the same provisions in its worker agreement that Amazon has, he wasn't kidding. In fact, they're nearly identical. Here is the relevant wording in Amazon's agreement:

1.a. Registration. When you register with the Site, you will be asked to provide us with, at a minimum, your name, a valid email address, your phone number, and your physical address. Providers may also be asked to provide certain tax information at registration or afterwards. You agree to provide us with true and accurate information, and to update that information to the extent it changes in any way. When registering or updating your information, you will not impersonate any person or use a name that you are not legally authorized to use.

And here is CloudCrowd's version (you have to log on to Facebook and click on "Join Up" to access the Terms of Service):

1.a. Registration. When you register with the Site, you will be asked to provide us with, at a minimum, your name and a valid email address. Workers will also be asked to provide certain tax information. You agree to provide us with true and accurate information, and to update that information to the extent it changes in any way from time to time. When registering or updating your information, you may not impersonate any person or use a name that you are not legally authorized to use.

Curious, huh? In fact, the two lengthy agreements are, to a very large extent, verbatim copies of each other. I e-mailed Chatow and asked him to explain that fact, and he replied that he would have to refer the question to CloudCrowd's attorney. He did that, and this was the response:

According to [our attorney], there is often uniformity among agreements in similar industries. Beyond that, it's our general policy not to comment on legal matters in a public forum.

Well, OK. But there's uniformity, and then there's being nearly identical, so that really didn't explain what was going on. The Amazon people failed to respond to my request for a comment, so they were no help. I checked CrowdFlower, another well-established crowdsourcing provider, and found that its Terms of Service are unique and unrelated to the Amazon/CloudCrowd document. But by Googling various phrases from the agreement that Amazon and CloudCrowd use, I found five other sites that use tweaked versions of it: ShortTask, Field Agent, MyEasyTask, TestArmy, and Sytai.

 


Perhaps one of these sites came up with the document, and the others copied it, presumably with permission. I asked all five of those sites if they could explain why they were using tweaked versions of the same Terms of Service agreement. None provided an immediate response except Field Agent, which so far has no explanation:

That is a great question and we will get with our legal team to ask their perspective. We look forward to reading your article and let us know how we can help out in the future.

In any case, it's clear that if a site's Terms of Service agreement is something that's just left to the lawyers to deal with and the company's top executives are unfamiliar with it, those executives can find themselves in an uncomfortable position.

 

When I e-mailed Chatow, I also requested a response to this question: If CloudCrowd requires that workers provide accurate information when registering, why did Alex tell me that "even if [people signing up to be CloudCrowd workers] don't like Facebook, they can create a separate identity on Facebook for purposes of working on the [CloudCrowd] system"?

 

Chatow replied that he would have to get Edelstein to respond to that one. It took a couple of days, but Chatow came back with this quote from Edelstein:

"I was simply mistaken in my answer. I have not before been asked detailed questions about terms of service issues, and I wasn't prepared."

I'll leave it to you to form your own conclusion about the legitimacy of that response. But just to be clear, I did not ask Edelstein any detailed questions about terms of service issues. In fact, I asked no questions at all about terms of service issues. Edelstein volunteered the statement about creating a separate identity on Facebook in response to my simple question about what a user should do if he wants to be a CloudCrowd worker but doesn't want to be on Facebook.

 

I'd be very interested in hearing anything from anyone who has experience with CloudCrowd, or who can shed some light on the practice of distinct Web sites using tweaked versions of a single Terms of Service document.



Add Comment      Leave a comment on this blog post
May 18, 2010 9:55 AM FDS FDS  says:

Sweet jeez.. life is way to short... so what if one company uses very simlar or even identical terms to describe EXACTLY the same thing...

If my CEO was spending time on this I would be seriously concerned.

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