6 Major Legal Policy Fails of Fortune 500s and Their Lessons to Take AwaySep 12, 2017 by Zachary Paruch, Termly
Every few months, the internet becomes replete with news of outrage at a change in a major company’s legal policy. It’s always the same story — the company makes a shocking or ambiguously worded update to one of its policies, there is a public backlash, the CEO makes a formal apology, and the changes are scrapped.
Inevitably, the company loses customers, its stocks take a hit, and it wears a scarlet letter in the public eye for a few months — at least until another company gets pinched for similar crimes against consumer privacy.
So what can your business do to avoid a similar fate?
Below, we’ve outlined 6 examples of
Spotify had failed to make clear that these terms were
The next day, the company’s CEO, Daniel Ek, posted a public apology on the company website in an effort to address user concerns and clarify his position. He also promised to update the policy again in a way that would better reflect the company’s true intentions.
In 2012, the popular
One day later, following an uproarious backlash across social media and in the news, the company’s CEO went public with an apology and promised to remove the offending language from the policy. He cited the confusing language used in the terms and a misinterpretation of their intentions as the cause for the backlash.
This was not before an unprecedented number of users left Instagram for other
One line of the new policy, in particular, drew ire from netizens. The line read:
Horrified users interpreted this to mean that, by using the Dropbox service, they were granting the company the right to do whatever it wanted with the work, photos, documents, and research that they entered into the platform. Further, users would have no recourse to take back ownership or gain compensation.
In response to the ensuing public outrage, the company amended its policy to add a line which explained that the license in question was for the sole purpose of technically administering and operating the service.
To the app’s users, this was an especially heinous breach of trust and privacy, as Snapchat’s primary appeal is the fact that you can send photos that disappear moments later. If photos can be stored, reproduced, and published by the company, it means that they do not really disappear at all.
Only three days later, and in response to the public outcry, Snapchat took to its blog to clarify its stance and the wording of its policy updates.
The company emphasized that it had only updated its policies so that they’d read the way people actually talk. Snapchat adamantly maintained that it had not and would not store user content, and went lengths to ensure users that their photos and messages were deleted after they were seen or had expired.
5. Delta Air Lines
After more than three years of trials and appeals, the case was thrown out in favor of Delta Air Lines. The presiding judge held that the Airline Deregulation Act of 1978, a federal law, preempted the application of CalOPPA to the Fly Delta app — thus giving airlines an
What Can We Learn from Their Mistakes?
Although the aforementioned cases involve
Use language that is easy to understand
Nearly all of the cases outlined above were a result of the use of language that was too easily misinterpreted. These misinterpretations and subsequent consumer outcry could have been avoided by simply taking more care to ensure that the language used was easy to understand.
If possible, avoid using overly formal language in your legal policies. Legalese is difficult for many people to understand, and could create confusion or misinterpretations. Overly formal language also acts as a barrier of sorts, seemingly keeping the user at arm’s length.
Try to be as conversational as possible. Your users will feel more confident in their understanding of your policies, and also that you are being real and open with them.
Be transparent about your intentions
Another pitfall common amongst most of the cases detailed above was a lack of transparency about the company’s intentions. The companies rightly notified their users that there were updates to the policies, but did little to explain the reason for those updates or the effects the changes would have.
Make an effort to be open with your users. Notify them with any changes to your legal policies, and explain why those changes have been made. If you need to collect more personal information to improve your services, just be open and let them know. They will appreciate your candidness and be more likely to give you the benefit of the doubt.
Get a second opinion
When working on something for a long time, it’s easy to get too close to it to notice problems. In the cases discussed above, lawyers most likely spent hours poring over those policies to make them just right.
However, when push came to shove, the documents contained some glaring problems that the companies in question clearly hadn’t noticed or anticipated. This is why it’s important to get a second — or even a third — opinion on your proposed changes. They may notice something that you’ve missed, or have a different interpretation of the words you’ve used.
Of all the companies that have suffered consumer backlash as a result of updates to legal policies, Evernote is one of the only ones to take appropriate steps to right their wrongs.
Evernote finally learned its lesson and did things the right way — but only after suffering a very public controversy and losing countless users. Avoid the backlash, and do things the right way from the start.
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