Hooray! There’s a new platform for helping small businesses battling to survive the pandemic!
As an entrepreneurship law attorney, I really want to cheer with you. I do. But after reading the terms and conditions (T+Cs) behind the newest Facebook business gizmo, the tech lawyer inside of me cringed.
I realize that no one likes to read T+Cs (aside from attorney nerds, like myself), but these small print, five-times-backlinked, “necessary evils” provide the rules that dictate your use of the tools they stand behind—and often are the reason your expected payout is much lower than . . . well, expected.
Because most T+Cs contain a lot of legal mumbo-jumbo, I’ve broken down what you need to know before using Facebook’s Online Payment Events (OPE) tool in a quick, five-minute read. Let’s begin.
“Respect the rules, get paid.”
Not all content is allowed.
Before you even sign up, make sure you have a clear understand of what you may and may not use OPEs for. On the list of Things Not Allowed via Facebook’s Content Monetization Policies are:
- Engagement Bait. This no-no is defined as any content that encourages viewers to interact with a link or post through likes, comments or shares.
- Hot Social Issues. If you want to use OPE as a forum for discussing religion, race, politics, immigration, or any polarizing issue in-between, you better find a different forum. Discussion of these topics could result in Facebook reducing—or even disabling—your revenue share.
- Strong Language. This type of content is generally defined as profanity, slurs, and sexual innuendo, and can also lead to a reduction or elimination of event profits. If your typical content is NSFW (or you happen to be a raunchy comedy club), OPEs are not for you.
- Fake News. Ah, our favorite political phrase of 2016. If the information provided on your OPE is dubbed misleading, you could see your share in the profits vanish. *This applies to all misinformation, whether or not it is political or medical.
Giveaways are forbidden.
Sorry to say it friends—there is no room for contests, raffles or sweepstakes on Facebook’s OPE platform. This is not to say Facebook is a Big Bad Bully, but from a legal perspective, the regulation of such appealing engagement bait is just a nightmare. And remember—even if you see someone else do it, That. Does. Not. Mean. It’s. Okay. Because despite others’ actions, you have to own up to the consequences for breaking rules. And that could mean no profit from the OPE. Respect the rules, get paid.
Be careful of background IP.
Infringing on another’s intellectual property (IP) can be severely consequential. Infringement occurs when you don’t have the right to use certain music, photos, videos, scripts, logos or other creative elements in your OPE. There are only four options for obtaining these rights: 1. You created all of the material, 2. You have a legal document in place assigning ownership or licensing your use of the material, 3. You get the material from Facebook’s Sound Collection, or 4. The material is in the public domain (i.e., it’s a super old song, and its copyright protection expired).
If you infringe, not only can your OPE event profits be taken away, but you can be kicked off the platform AND subject to a lawsuit. Harsh.
App engagement may deplete profits.
Whether you’re trying to keep your business afloat or hosting a charitable event, the ultimate goal of your OPE is likely to maximize profits. Therefore, it’s important to know how those profits may be reduced.
Through a series of contracts entered into before the OPE platform was even imagined, Apple provided for itself a sweet cushion of 30% of all in-app purchases. This, in turn, will eat up your revenue. If an iPhone user registers for your event through the Facebook app, Apple gets 30% of your OPE profits, right off the top. Android users are no exception—if participants on the Android app use Google’s in-app payment system to pay for the OPE (rather that Facebook Pay), Google will keep 30% of the revenue.
To avoid revenue sharing, the OPE transaction has to occur on the web or Android users must utilize Facebook Pay.
Removal is discretionary.
Time to bite the bullet—since you’re choosing to engage with a multi-billion-dollar mega corporation, you need to understand that T+Cs will always be unfair. I will let the agreement speak for itself:
“Facebook can terminate or suspend your use of POEs at any time in [its] sole discretion, and [Facebook] may change or stop offering POEs at any time in [its] sole discretion. In no event will [Facebook] be liable in any way for terminating or suspending your use of POEs, for the discontinuation of POEs, for the removal of or disabling of access to content, or for the withdrawal of the content or POEs.”
There you have it. The ramifications of dealing with Big Tech. Enjoy Facebook’s new business feature!
While it is unlikely you can negotiate any of the terms in Facebook’s Paid Online Events Creator Terms, the team at Rockridge® can help you understand your responsibilities when using OPEs or other tech tools and help you avoid legal liability.
About Lauren Hughes McClanahan
Lauren Hughes McClanahan is the privacy and branding lead at Rockridge Venture Law®. Equally adept at creative campaigns as well as technology transactions, Lauren leads clients through copyright, privacy, regulatory, and trademark considerations in optimizing successful e-commerce portfolios. She is a leading voice among women practicing in technology law and an IAPP Young Privacy Professional. Her primary practice areas include copyright and trademark law, data privacy, sports and entertainment law, and technology transactions. Lauren also leads the Knoxville Technology Council’s Women in Tech Committee, and is a Director of the Tennessee Women’s Theater Project. Read more about Lauren, connect with her, and Calendly her.
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Rockridge Venture Law® was launched in 2017 to become the preeminent intellectual property and technology firm across the Appalachian Innovation Corridor. We now have offices in Chattanooga, Durham, and Nashville, and represent clients and interests globally. Our services include all aspects of intellectual property, litigation, M&A, privacy, technology transactions, and ventures.
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