Facebook and Scrabulous: Safe Harbor in a Web 2.0 World

CNET has a great piece on Facebook’s role in the Scrabulous battle. For those unfamiliar with the case, Facebook is a social networking site that allows developers to post widgets that it calls “applications” for users to use on Facebook. One of them was the incredibly popular game Scrabulous, which Hasbro claimed ripped off their board game Scrabble. So, Scrabulous backed down and modified their program, re-releasing it as Wordscraper.

At CNET, Caroline McCarthy asks the important question why Facebook left Scrabulous alone, in the wake of lawsuits like Google-Viacom challenging websites’ status as safe harbors. McCarthy points out that Facebook in fact regulates its applications fairly heavily (though not nearly to the degree of, for example, Apple’s iPhone App Store). Given how popular Scrabulous was – and how much traffic it generated – it is little surprise that Facebook kept it around, in spite of obvious liability concerns.

McCarthy’s explanation for Facebook’s “neutrality” are pretty intuitive, but the most interesting bit comes near the end of the piece:

Plus, had Facebook taken a hand in the Scrabulous debacle, it would’ve set a messy precedent. “The thing is, there’s 400,000 developers (using Facebook’s platform), and they’re trying to find ways to be successful, and that means copying games that are going to work,” Owyang said. “So you’re going to see more indicators of this.” If Facebook had vocally pulled Scrabulous, goodness knows how many game companies would’ve come knocking on Zuckerberg’s door in Palo Alto with complaints of their own.

And that wouldn’t have been good, because there are plenty of games beyond Scrabulous that have been boosting Facebook’s score on that coveted Valley rating scale, user engagement. “They’re clearly trying to segment quality apps that help the user experience, versus ones that don’t,” Owyang said. Again, in doing nothing, Facebook was doing a whole lot.

“They’re a private entity. They’re not a public utility, (and) they’re not an ISP,” Howell said of Facebook. “It’s perhaps disingenuous for Facebook to use the word ‘neutral’ in that kind of situation, because at the end of the day they do hold all the cards on what people can and cannot do on their site.”

The important question – and one that is fast becoming the next Big Question in copyright debates – is whether Facebook can be viewed as like an ISP, a neutral platform for users to post whatever they want on. The safe harbor question will come up in an increasing number of contexts. No longer are P2P apps the only target of infringment-aiding suits. Should a website like YouTube that hosts infringing content be held liable? What about a website like Facebook that allows infringing widgets? What if Scrabulous was available in the iPhone App Store? What about Google – does placing an infringing page high on its search results make it liable? And what about ISPs that do engage in some network management? How much control do you need to have over content to be liable?