June 17, 2024
The FTC warned about 'quiet' TOS changes for AI training. Here's why it might not be enough.

This week, the FTC warned companies that ‘quietly’ changing their Terms of Service, as a result of the powerful business incentives to turn user data into AI training fuel, could be unfair and deceptive.

“Companies might be tempted to resolve this conflict by simply changing the terms of their privacy policy so that they are no longer restricted in the ways they can use their customers’ data.” an FTC blog post said. “And to avoid backlash from users who are concerned about their privacy, companies may try to make these changes surreptitiously. But market participants should be on notice that any firm that reneges on its user privacy commitments risks running afoul of the law.”

The FTC offered strong language, but its warning is late in coming. In July 2023, for example, Google updated its privacy policy to allow the company to use public data to improve its AI models. And in August 2023 VentureBeat reported on the news that Zoom had made silently made changes to its TOS clarifying that the company can train AI on user data, with no way to opt out.

VentureBeat also reported in June 2023 about Adobe Stock creators who were upset that they did not receive notice that Adobe was training on their uploaded work for their Firefly model.

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“I don’t recall receiving an email or notification that said things are changing, and that they would be updating the terms of service,” one UK-based creator told VentureBeat.

Most people don’t read or understand the TOS fine print

Also, the truth is that most people don’t read or understand the fine print of the dozens of Terms of Service documents they interact with anyway. In 2019, for example, a study analyzed the terms and conditions of 500 popular US websites, including Google and Facebook, and found that more than 99 percent of them far exceeded the level most American adults read at.

In addition, there is an old report from 2017 that likely still holds up: A Deloitte survey of 2,000 consumers in the U.S found that 91% of people consent to legal terms and services conditions without reading them. For younger people, the survey found the rate for people aged 18-34 was even higher, with 97% agreeing to conditions before reading. 

Bradley Kuhn, a policy fellow at the Software Freedom Conservancy, said at an October 2023 FTC roundtable that “if consumers take anything away from my comments today, I hope they remember to carefully read the terms and conditions of all software platforms they use, as they may have already agreed for their own creative works to become part of the company’s machine learning datasets.” He added that “I admit it may take you a week to read all those terms. But it’s sadly the only way you’ll know what rights you’ve inadvertently given away to big tech.”

Many updates are just explicitly saying what was already in the TOS

Many Terms of Service updates, including around AI, are really just more explicitly confirming something that was already in the TOS, according to Katie Gardner, a partner at international law firm Gunderson Dettmer, who VentureBeat spoke to about the Zoom policy changes.

It’s common for companies to frequently update their Terms of Service as their practices change, she explained, and some privacy regulations, such as the CCPA, require companies to update their Privacy Policies annually.

“Companies need to notify users of material changes to their practices if they want the changes to be legally enforceable against them,” she told VentureBeat. “At least in the case of Zoom, if done quietly, it was likely because the change wasn’t material — it was just stating more explicitly something it [had] already retained the rights to do.”

That said, she pointed out that tech companies are currently making these updates because they’re seeing backlash from regulators. “The methods by which companies are collecting consent for using user data for training purposes are targets of enhanced regulatory review,” she said, including the FTC’s resolutions in May 2023 of actions against Ring and Amazon related to the transparency and accuracy of notices to users about the use of their data for training models. 

There still might be more TOS surprises to come

There still might be some more Terms of Service surprises in store. For example, today planned updates to the Terms of Service by Findaway Voices by Spotify — an audiobook platform for independent authors — were shared widely online, causing concern about audio narration being used for training AI.

On Reddit, users shared a response from Spotify: “Earlier today, we shared planned updates to our Findaway Voices by Spotify Terms of Use that are set to take effect on March 15, 2024. Our goal was to introduce language that would allow us to offer authors innovative features, improve discovery, and provide promotional tools such as share cards while assuring authors that you ‘retain ownership of your User Content when you post it to the Service.’ In the hours since, we’ve received valuable feedback, and we understand that there is confusion and concern about some aspects of this language. We want you to know that we hear you and are actively working to make clarifying updates to alleviate your concerns.

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