Thanks to those who joined us for the first episode of our Clubhouse Speaking Series, "Welcome to the Future: Legal Issues with Using Clubhouse"! We had great fun and a great turnout, and we look forward to entering the Club again in just a few weeks.
Given the ephemeral nature of the platform, we wanted to memorialize some key takeaways from the room:
We Ain't Seen Nothin' Yet. It's important to remember that even though Clubhouse is valued at $1 billion and has 10 million subscribers and counting, the app is currently in beta form. We expect major changes to the platform, so we will all have to watch closely over the coming months to see how it evolves. Rumors include developments like ticketed talks, subscriptions, the ability to tip your speakers, an influencer program and more!
It's Apparently Not Meant to Be Used for Commercial Purposes. Huh? As of now, according to its terms, Clubhouse is not intended to be used for commercial purposes or advertising. Maybe so, but that has not stopped brands from using the app, including by registering their brand names as usernames, attempting to send free product to those in a room, or having their CEOs or endorsers interact with consumers on the platform. That said, there are currently no paid advertising opportunities, no sponsored rooms, no branded content or analytics tools for influencers, nor any other platform functionality obviously designed to help advertisers monetize their time on the app. Will a brand be able to act as a true editorial speaker on Clubhouse? TBD!
Toto, I Have a Feeling We're not in Kansas Anymore. Remember, there are some main differences between Clubhouse and existing social networks, and those differences can impact how companies use the platform. For example, the app is only for users who are 18+, there's no centralized "feed," no place to upload photos, no chat functionality, and no way to "like" or comment. It's more like a giant audio conference center where attendees can wander a central "hallway" and duck into rooms with panels in progress led by select moderators and a captive audience. The conversations happen live and aren't recorded for playback. Basically, if you're not "in the room," you'll miss what's happening. This new domain presents all kinds of novel issues: How and where does a brand disclose if it sponsors a room? If a company is hosting a Clubhouse and its employees or influencers attend and make comments about the brand or its products or services, how and where should their material connection be made clear?
The Data is in the Details. The rollout of Clubhouse has been a bit rocky from a privacy and data security standpoint, and reminds us of the cautionary tale of Zoom from 2020. The Clubhouse terms prohibit any data extraction from the platform and state that audio is never recorded, except temporarily in encrypted format for the sole purpose of supporting incident investigation. But, according to researchers, that isn't entirely accurate, as recordings and metadata have found their way off the platform. Privacy professionals also highlight issues with the platform, including a very aggressive invite process reliant on the development of dark profiles (you might even get a recommendation to invite your drug dealer), terms and policies that are not easily accessible, and a general lack of privacy options, such as the inability to hide who invited you to the platform. Given Clubhouse's quick rise to stardom, we wouldn't be surprised if regulators in various jurisdictions take the position that certain of these practices violate data protection laws.
Everything in Moderation. After living through the Trump years, we've all become increasingly familiar with issues around social media moderation. As with many of the other major social networks, Clubhouse has a lot of discretion as to who can remain on its platform, and it reserves the right to suspend or remove accounts that may be in violation of its terms. In other words, their backyard = their rules. What's remarkable about the app, though, is that moderation also sits directly in the hands of room moderators who can personally accept, reject or mute speakers, or remove them from a room altogether. This user moderation capability not only raises complex legal issues (e.g. does a brand on Clubhouse lose immunity under Section 230 of the Communications Decency Act if it carefully curates who can speak during a sponsored talk in its room?), but also social justice questions. As Vox reported, room moderators are not always equipped to handle issues like silencing or hate speech. Clubhouse's moderation tools can lead to rooms becoming dangerous environments for participants from historically marginalized communities, particularly if they are unable to speak or are harassed when they join the conversation. The Clubhouse Community Guidelines state that the app "depend[s] on the vigilance of each user and the community to report violations of Rules." But Clubhouse also says that if a live session ends without an immediate user report of bad conduct, any record of the session will be deleted, thus making it hard for users to report incidents and for the platform to investigate later. We will have to see how the platform and its users tackle these complex issues as the app matures.
We look forward to following Clubhouse on its meteoric rise, and to watching how Twitter Spaces and "whatever Facebook brings to the table" react as this new audio ecosystem develops. We will continue to update you.
In the meantime, find us in the Club!
Originally Published by Frankfurt Kurnit, March 2021
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