How To Prevent Legal Issues That Arise from Actions of Users?

A recent LawTrades user asked: “What Are Some Ways to Prevent and/or Deal with Legal Issues That Arise from Actions of Users on User Generated Content Websites?”

What’s required overall is reliable risk management. Because of the fairly high risk of liability exposure that’s involved with user generated content (UGC) sites, you’ll want to engage a knowledgeable attorney to draft the Terms of Use and Privacy Policy.

The terms of use is your contract with users, which they need to agree to prior to using the site. It should be specifically tailored to your website, which is why you need a good lawyer who can help you minimize your liability exposure.

The privacy policy is a set of disclosures a site owner must disclose to users. As opposed to policies and terms of use which are contractual, privacy policy is legally required – in word and action. In other words, a service provider is legally responsible for protecting user information. The privacy statement needs to specify how you’re going to protect a user’s privacy and data (including information stored in data logs), and how you will respond in the event of a breach of security.

We see companies and website owners often at LawTrades that mistakenly believe they can simply adopt another site’s terms or privacy statements. This is very risky since every company and site is different, and therefore will need language that fits and protects them.

I also get many questions about potential defamation or other harmful communications or posts. The good news for US operators is that the Communications Decency Act (CDA) provides exemptions from liability for some content or behavior which could be considered offensive – as long as it’s not a tort or criminally prohibited.

Specifically, Section 230 says that “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” Translation: there’s general immunity for UGC sites when some of the UGC content is defamatory or misleading, even when the site owner is aware that the the UGC content is noxious. Moreover, unless the operator has agreed (e.g., in the Terms of Use) to remove such content, the default position of the CDA is that a site owner is not required to take down harmful posts or content – again, as long as it’s not a crime or a tort.

Intellectual property is another legal item to be aware of. Users on UGC sites can sometimes post work (chiefly videos) to which they have no rights. Here again, the US offers operators some fairly stout safe harbor provisions. The Online Copyright Infringement Liability Limitation Act (OCILLA) effectively offers operators immunity from liability for users’ copyright infringements. In contrast to the CDA, however, OCILLA requires site owners to immediately remove the protected IP. In addition, the operator is required to not have actual knowledge of the IP infringement.

Suggested Practices

In addition to having a privacy policy and carefully drafted Terms of Use that your users agree to, there are certain actions you can take that can help you minimize liability as a service provider:

  • Regularly review and update the Terms of Use.
  • Eligibility for some OCILLA safe harbor provisions – specifically under the Digital Millennium Copyright Act (DMCA) – require a service provider to register with the copyright office. More information is available
  • Be responsive to complaints.
  • Consider insurance. New insurance products are available for service providers of UGC sites that can significantly reduce liability costs.
  • Adequate training. Ensure that your employees are trained about legal issues, policies and risk management strategies.

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