ContractsProf Blog

Editor: Jeremy Telman
Valparaiso University Law School

Tuesday, June 30, 2020

Are the User Contracts of Google and Facebook Illegal? - Guest Post by Preston Torbert

Today we have a guest post by Preston Torbert, Lecturer at the University of Chicago Law School and Visiting Professor at the Peking University School of Transnational Law.  This is an excerpt from a much longer article,  “Because It Is Wrong: An Essay on the Immorality and Illegality of the Online Service Contracts of Google and Facebook” available here.     

        Are the user contracts of Google and Facebook illegal?

          No one has ever raised this question in court, so as yet there is no definitive answer.  But why would anyone raise this question?
          Because the business model of Google and Facebook (free service for personal data) is immoral and the contracts implementing it are arguably illegal.   Critics have pointed to the companies’ various failings: monopoly, privacy violations, harmful content, and misrepresentations.  But although their business model is the problem, no one has used a legal argument to attack it.
          The business model is: more engagement=more data=more manipulation=more advertising revenue, all through secret, unknowable algorithms without awareness or understanding by the users.  This model is immoral because it reduces users’ autonomy through addiction, surveillance, and manipulation.  While addiction is generally associated with substances, “behavioral addiction” has now achieved recognition and is included in the American Psychiatric Association’s DSM.  Google and Facebook website designers employ social validation loops, intermittent reinforcement, and human heuristic biases to “hook” users and addict them.  And addiction is a paradigm threat to personal autonomy.  The surreptitious collection of vast data troves necessary for manipulation requires pervasive watching and tracking—surveillance.  In fact, the two companies’ business model has been called “surveillance capitalism.”  The companies manipulate the users--intentionally arrange circumstances to influence them in a way that is beneficial to the companies and detrimental to the users.  This manipulation diminishes users’ autonomy.
          Of course, immoral conduct is not necessarily illegal, especially if the conduct is authorized by contract.  But the legal system has never given effect to every contract.   Every legal system deems certain contracts to be so detrimental to society that it will not enforce them.  Such contracts are illegal, null, and without legal effect. 
          Are Google and Facebook user contracts so detrimental?  The answer depends on society’s values, primarily autonomy.   The founders of liberal democracy, John Locke and Thomas Hobbes, premised their theory of consensual government on the assumption that men had “liberty” (what we now call “autonomy”) to choose to consent.  More recently, John Rawls’ Theory of Justice also assumes that individuals are autonomous.  Clearly, democratic government cannot be created or sustained without autonomous citizens. 
         The federal Constitution makes no reference to autonomy, but the Declaration of Independence and many state constitutions (including California’s) do.  Among the fundamental “inalienable” rights they proclaim are those to life, liberty, and the pursuit of happiness.   So, a contract that depletes a person’s autonomy violates a foundational principle of our democracy.   Because autonomy is an “inalienable” right, it is not subject to the market and a person cannot contract to give up this right.
          Logic also supports this conclusion.  As John Stuart Mill argued, a democracy cannot allow citizens to choose to give up choice, e. g., to allow them to contract themselves into slavery.  If society values autonomy, then it cannot allow a person to alienate their autonomy because to do so would be to deny their autonomy.   And American history supports this conclusion.  In the nineteenth century, peonage was a new form of bondage based on a contract freely entered into by the peon.   But the Peonage Statute of 1867 and many court decisions prohibited peonage contracts because they deprived peons of the inalienable right to autonomy.
          Today, the legal system continues to protect autonomy.  First, under applicable California contract law a plausible argument can be made that contracts depleting a party’s autonomy (such as those of Google and Facebook) are contrary to good morals, unconscionable, and against public policy.   Second, under this argument, the contracts (including the users’ consent to the collection and monetizing of their personal data) would be illegal, null, and without legal effect.  Third, as a result, the companies would have no legal right to collection and monetization and these acts should constitute a tort or a statutory violation.
          An example of how California courts protect the autonomy of its citizens is the gambling contract.  The courts, sua sponte, have found gambling contracts contrary to good morals and refused to enforce suits for the collection of gambling debts because such contracts are contrary to good morals and against public policy.  This is especially true where addiction and the resulting loss of autonomy have led to compulsive gambling on credit.  Since contract law has helped protect society from the loss of autonomy through gambling addiction, it should be able to do the same for digital addiction.
          Autonomy is essential not just for the theoretical basis or the foundational documents of American democracy, it is essential for the integrity of elections.  This is why Judge Jacob Trieber in Peonage Cases, 136 F. 707 (E. D. Ark. 1905) said that peonage was more dangerous to the country than slavery--because a peon, unlike a slave, was a citizen with a vote that their master could influence.  More recently, it has become clear that the business model and contracts of Google and Facebook pose a grave threat to democratic elections because they manipulate users and diminish the autonomy of these “digital peon” voters. 
          The two companies’ business model and resulting data troves also create an environment hostile to democracy.  False content is more viral than truth so more engagement leads to more virality and to more false content.  Virality then becomes the coin of the campaign realm.  And as we spend more time online, we become what our data is made to say about us and our digitized personhood is made alienable.  Personhood, the supreme value, becomes a mere commodity sold by the two companies.  Surely, these direct effects of the business model and its contracts are immoral, unconscionable, and against public policy.
          California courts have a reputation for leadership in moving the law forward.  They have been pioneers in affirming the rights of the individual against corporations, the government, and traditional mores.  For example, they have taken the “extreme” position that all adhesion contracts are procedurally unconscionable.  While California courts have not ruled on the legality of the Google and Facebook contracts and no precedent compels a decision of illegality, California courts have creatively applied the law in responding to changes wrought by new conditions.  The internet service contracts of Google and Facebook are examples of new conditions that require the creative application of contract illegality doctrine.
          In the future, a class action against the two companies could well render a positive answer to the title question.  If so, the court should issue a permanent injunction preventing the companies from collecting more information from their users than is functionally necessary and should place on them a fiduciary duty in dealing with users’ personal data.  The two bankrupted platforms should then convert to a subscription model that does not entail manipulation or loss of autonomy.  Growing discontent with the two companies seems to be preparing society and the judiciary for just such legally “disruptive innovation.”

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