WeTransfer has updated its terms and conditions to grant itself the right to use customer content to train machine learning models and also to “prepare derivative works” without paying compensation to the owner of the content, its users.
What is a derivative work?
In a nutshell, it’s any piece of content that was created from a distinct, pre-existing source material or materials. In music, a song that has a sample from another song is considered a derivative work. In legal terms, it is a novel piece of work, but it is not is completely original. In the majority of cases, to use a sample, an artist needs to get clearance from the rightsholder of the source material and the creator of the derivative work will pay either a royalty or a fee to obtain the usage rights.
Why is this controversial?
Content creators are rightly uncomfortable with the concept of big technology firms using their original creations to train AI. Many see AI as a threat to their livelihoods, so would understandably be reluctant to participate in anything that helps AI compete with them. Photographers and visual artists are particularly sensitive to this, for obvious reasons.
Perhaps more concerning is the fact that WeTransfer has also granted itself permission to effectively ‘sample’ the work of other creators without seeking their permission or paying them. This means that theoretically at least, WeTransfer could use content from one of its customers to create a book or piece of art, which it could then sell.
Why is it a public relations problem?
There are a few reasons. AI training is controversial for the reasons we’ve mentioned above. We believe that unless WeTransfer quickly moves to clarify its intentions (or better still, remove the new clauses in its terms and conditions), it could find itself in an unwanted crisis communications situation.
The main issue people will have with this WeTransfer news is that many content creators are on a paid plan. They therefore believe they are paying to have their work and livelihoods compromised.
In cases where a large organisation, like Google for example, assigns itself permission to use content for training AI, it’s commonly looked at as a trade-off in return for a free, useful service. People may not like it, but they see it as an unwelcome compromise to continue using Google.
In the case of WeTransfer, users will not feel that WeTransfer is entitled to ask for this trade off if they are already charging for the service.
What are the risks to WeTransfer?
WeTransfer provides a service in a sector where brand loyalty and customer friction is low. Aside from price, user experience and convenience, there aren’t many compelling reasons to choose WeTransfer over say, Dropbox.
By friction, we’re referring to the ease or difficulty of switching suppliers.
Banks, mobile network providers and public transport providers are high friction because switching can be difficult, either due to an absence of alternatives or due to the effort required to change supplier. Take-away coffee, retail, and ride-sharing are generally low friction due to an abundance of competition in the sector and the relative ease of using a different supplier. In many cities, if you lose faith in Starbucks, you can just as easily go to Cafe Nero (UK) or Dunkin’ Donuts for the same product.
But don’t lots of providers give themselves similar permissions?
Yes, lots of organisations have terms and conditions that permit them to use content for training AI. However, many of those providers benefit from high brand loyalty. Most people select their file transfer provider based on cost and convenience. It is relatively easy to switch to a new file transfer provider. In fact, in many cases, professional content creators and publishers will have accounts with more than one file-sharing service.
The main risk here is that a competitor like Dropbox, Smash or even Google Drive could come out and announce that they will never use your content for these purposes. That immediately gives users a good reason to abandon WeTransfer completely.
In fact, Dropbox already clarifies in its terms and conditions that it doesn’t claim any rights to customer content.
From the Dropbox terms and conditions:
Your stuff & your permissions
When you use our Services, you provide us with things like your files, content, messages, contacts, connected services and so on (“Your Stuff”). Your Stuff is yours. These Terms don’t give us any rights to Your Stuff except for the limited rights that enable us to offer the Services.
Why else are people unhappy?
Aside from the obvious rights usage issue, it appears that WeTransfer have tried to grant themselves these permissions by stealth, simply by updating their existing terms of service. Had they made an announcement explaining the changes, the reasons behind them and the impact it may have on their customers, they could have potentially limited the level of speculation and anger that we believe they will now face.
WeTransfer AI training and derivative works clause
See the new terms here.
Look for clause 6.1. We’ve highlighted the controversial bits.
“You hereby grant us a perpetual, worldwide, non-exclusive, royalty-free, transferable, sub-licensable license to use your Content for the purposes of operating, developing, commercializing, and improving the Service or new technologies or services, including to improve performance of machine learning models that enhance our content moderation process, in accordance with the Privacy & Cookie Policy. Such license includes the right to reproduce, distribute, modify, prepare derivative works based upon, broadcast, communicate to the public, publicly display, and perform Content. You will not be entitled to compensation for any use of Content by us under these Terms.”
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