MoneyWatch Tech

Criminalizing Competition Makes Facebook the Anti-Social Network

By Erik Sherman

Updated on: May 7, 2010 / 12:00 PM EDT / MoneyWatch

For over a year, Facebook has faced off against Power.com in a lawsuit over user data. Mark Zuckerberg wants to grab as much data as possible and not let it out the door under any condition -- got it. Nothing unusual when a corporate looks to amass data -- otherwise known as value and power these days -- and lock it down tight.

The problem is that Facebook alleged Power.com had committed criminal computer fraud in its actions, similar to Apple's (AAPL) latest actions when Gizmodo got hold of an iPhone 4G prototype and Apple alleged theft and pushed for criminal prosecution. Bringing criminal charges is a powerful tool. However, both Facebook and Apple are evidence of an apparent growing tendency among high tech businesses to make indiscriminate criminal allegations. That's a huge mistake, because there are certain unspoken agreements in business. Once you cross the line yourself, you invite others to use the same weapon against you.

Both Facebook and Apple alleged criminal conduct as a way to bludgeon an opponent, whether a competitor who could potentially lower the value of otherwise locked-up information or members of the press who refused to play the do-what-we-say-or-suffer control game that Steve Jobs so highly favors. The danger is that both parties seem willing to stretch a reasonable definition of criminal activity to get what they want, consequences be dashed.

Facebook claims that Power.com violated California Penal Code Â§502(c) by pulling data off its site, even though customers of both Facebook and Power.com used the latter to manage their own data. As the Electronic Frontier Foundation points out in a friend of the court brief:

Facebook argues that by offering these enhanced services to users, Power violated California's computer crime law. It grounds its claim in the fact that Facebook's terms of service prohibit a user from having automated access to a user's own information and that Power continued to offer the service to Facebook users even after Facebook sent Power a cease and desist letter demanding that it stop. Yet merely providing a technology to assist a user in accessing his or her own data in a novel manner cannot and should not form the basis for criminal liability.
To hold otherwise, as Facebook asks this court to do, will create a massive expansion of the scope of California criminal law, hinging liability on arbitrary and often confusing terms chosen by private parties in the contracts of adhesion they present to users. This creates both legal uncertainty and the risk of capricious enforcement. It will also hobble user choice and interfere with follow-on innovation, in part by creating a barrier to Facebook users who wish to move their data from Facebook to a competing service.

This approach to lock down value in data that is actually owned by customers would, as the EFF points out, effectively turn millions of people who ignore terms of use into criminals. If upheld by a court, it will drive companies into greater caution, reduce innovation, and in the long run make it more difficult for companies like Facebook to partner with others. Furthermore, it increases the possibility that competitors or disgruntled former partners will scour criminal statutes, looking for some way of striking back. And it tells users that you are out to get them. Not the smartest type of PR.

Apple is in the same position. Claiming that Gizmodo received stolen goods, even though an Apple employee apparently lost the unit and the finder allegedly called the company about his find but was ignored? Please. I could see Apple management being angry, but do something smart and direct it inward to find where you have to change your own behavior to avoid such a slip. (Hint, don't send sensitive equipment out with young people who are about to hit bars to celebrate their birthdays.) Furthermore, it wouldn't be surprising if some scrappy media company with some cash for lawyers found one or more areas where they could reasonably allege that Apple was breaking a criminal law and return the favor.

It's time for everyone in the tech industry to take a deep breath and ratchet things back. Folks, I know lots of money is at stake, but the corporations involved here already have enormous revenue, influence, and power, and are suffering no real loss. Step back from the brink, lest someone come up from behind and nudge you over.

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Image: RGBStock.com user saavem, site standard license.