0

Medium is sort of a content facilitator that charges its users for premium content and passes on part of that fee to authors, when the reader interacts with their work. However, over recent months, Medium has become increasingly focused on their own partnerships and internal publications, to the point where it's hard to argue that there is not an ethical conflict of interest. My question is whether there's a legal conflict of interest.


General Idea

To put it into general terms, consider three parties, A, B, and C. Party A offers party B and C the opportunity to profit from an operation, where parties B and C are in competition with one another for a finite amount of revenue in a given month (the total available from subscription fees in this case). Further suppose that the operation relies on party C for success (it seems easy to argue that Medium would have trouble surviving if only their own content was on the platform), and that party A provides biased support to party B. Finally, B and C are paid by A, from the revenue generated by the operation, rather than B and C obtaining the revenue directly from the operation's customers.

In such a scenario, there seems to be both an ethical issue and potentially legal issue. However, I am not familiar with any specific civil statutes that may come into play. Does it appear that the above scenario might violate any specific statute? The one potential reason why Medium might be saved from a valid lawsuit is that an author does not have to pay for the service. However, they are providing support, in their aggregate, through the massive volume of writing that they provide to the platform, without very much chance of being able to actually generate revenue. Precedent from cases involving pyramid schemes may apply here.


Michael Seifert raised an interesting question: "How would this be different from Publishing House A promoting a more profitable Author B instead of a less profitable Author C?"

The difference is that the publishing house does not rely on C's work for sales. To continue this analogy, consider a situation where the publishing house put in a request for chapters for an anthology, where the majority of the chapters came from C, and a few came from B. Further suppose that the publishing house paid its authors based on how many sales the respective authors generated, but almost exclusively promoted author B's website that sold the anthology. Even though readers likely would not purchase the anthology, without the chapters provided by C, because of A's disproportionate support of B, C would receive very little of the revenue stream.


BlueDogRanch made a point that Medium's terms of services "says nothing about being fair, or ethical." Agreed. Its terms of services say nothing, and therefore it does not say that they reserve the right to unfair, unequal, or unethical, biases. If the terms of service stated that Medium reserves the right to unequal promotion of work regardless of whether it reduces the potential revenue by other authors, then Medium would have a greater chance of winning in court, and greater justification for their actions. However, without such statements, it becomes less certain that one should assume that a content facilitator that provides revenue streams as part of a partner program would engage in actions that disproportionately shift revenue streams towards their own content.


A final point. It seems that in California, an individual must pass the "ABC" test, at least when it comes to wage orders. Specifically, Medium's authors do not pass B: the worker performs work that is outside the usual course of the hiring entity’s business. It seems that, contrary to the suggestion that Medium's authors are subcontractors, they are, at least as far as California law is concerned, employees.

4
  • 1
    How would this be different from Publishing House A promoting a more profitable Author B instead of a less profitable Author C? Aug 22 '19 at 17:26
  • Because Publishing House A does not rely on Author C's work for its survival and reader base that B relies upon. It's fairly easy to argue that Medium's reader base would be incredibly small if it didn't have the material provided by the larger author base, and therefore it wouldn't have its revenue for itself OR its selected authors. I'll add this idea in an edit to the question. Aug 22 '19 at 17:31
  • Could you please cite, or better yet link to, the CA law you are quoting about the test for employee status? Aug 23 '19 at 1:53
  • It's a Supreme Court case. courts.ca.gov/opinions/archive/S222732.PDF and again, this only applies to wage orders. Borello still applies for broader questions. Aug 23 '19 at 1:54
1

Is Medium at risk of legal action?

They are, in as much as anyone or any company is due to the nature of civil law, i.e. just about anyone can take anyone else to civil court. That is where "legal conflicts of interest" are worked out. But I'd assume that Medium's lawyers have covered the bases in terms of adhering to state and federal laws that govern their business, their business model of paying authors and changing their business model; and ensure that they have a strong terms of service document for the site, and that document is legally binding for Medium's users.

Now, a disgruntled author could file against Medium, alleging fraud, uncompetitive practices, unfairness, conflicts of interest or anything else and attempt to recover damages for what they allege is a skewed payoff to authors or Medium's self-serving policies. That said, authors and Medium are bound by the Medium Terms of Service. The TOS says nothing about being fair, or ethical, and it clearly states that

By using Medium, you agree to these Terms. If you don’t agree to any of the Terms, you can’t use Medium. We can change these Terms at any time... If you don’t agree to them, you should delete your account before they take effect, otherwise your use of the site and content will be subject to the new Terms.

and

Limitation of Liability. Medium won’t be liable to you for any damages that arise from your using the Services.... This includes all types of damages (indirect, incidental, consequential, special or exemplary). And it includes all kinds of legal claims, such as breach of contract, breach of warranty, tort, or any other loss.

That's the contract that the author would have to fight in court, and they will lose. They agreed to the terms of using Medium. Their only option, within reason other than a lawsuit, is to quit using Medium. An author could still file a lawsuit, but how far are they going to get? How much money do they have to spend to go up against Medium?

11
  • "That's the contract that the author would have to fight in court, and they will lose. They agreed to the terms of using Medium." You make it sound like the terms of a contract override all statute, precedent, etc. Aug 22 '19 at 18:42
  • And thank you for your answer, but I also have to wonder why you would assume that Medium's lawyers covered all their bases, without doing a more detailed analysis of the law and their practices, given how often businesses fail to cover all their bases. Aug 22 '19 at 18:48
  • A contract can say anything it wants, as long as it does not contract for anything illegal. It's safe to assume Medium is not contracting for anything illegal in the TOS. Thus, current statutes and legal precedents don't come into play, other than any statute that say contracts can contract for anything illegal. Aug 22 '19 at 18:48
  • A contract cannot override statute on matters. For instance, if it is the statute that a tenant must be given 10 days notice, it doesn't matter if the contract says only 5 days notice is needed. Aug 22 '19 at 18:50
  • "A contract cannot override statute on matters." That's what I said. Aug 22 '19 at 18:51
0

Any business is free to subcontract on whatever (legal) terms are agreeable to them and their subcontractors

There is no legal obligation that the terms to different subcontractors be the same (unless the difference is solely due to discrimination against a prohibited class) or that they subcontract at all rather than doing the work ‘in-house’.

The same holds for suppliers and employees.

4
  • The problem is that no specific terms are set forth in the partner program. Would the law default to assumption of unequal support or assumption of equal support for equal work? I return to the example of the anthology where payment is received based on where the sale comes from, where the publisher actively promotes one source over the other. But perhaps there is no such protection. It is still unethical either way. Aug 22 '19 at 21:12
  • I should also add that it is not the pay that is differential in this case. The pay is equal, at least per clap. Everyone has the same opportunity, when a subscriber claps for the article. What differs is where the readers are being directed, by Medium. Aug 22 '19 at 21:27
  • @DanielGoldman my answer refers to terms, it doesn’t mention pay
    – Dale M
    Aug 22 '19 at 21:27
  • Fair. The problem is there is a single TOS. So the terms are the same. There are other problems too. When there is nothing explicit or really nothing stated at all, is it assumed that the terms for revenue generation would be equal? Of course, the other issue is that Medium doesn't pass the ABC test, and Medium states that it is holding itself to California law. Aug 22 '19 at 21:53
0

As I understand it, Medium has posted content by various authors, some employees of theirs, and some indep4endent. it charges members of the public a subscription fee to access (some of) this content and it pays outside authors a fee based on how often their work is accessed by subscribers. So far nothing illegal.

The OP claims, if I understand correctly, that Medium has been promoting the works of their employees, more than those of outside contributors, presumably in a bid to increase the share of the subscription fees that they retain.

I scanned the posted ToS and various linked documents, but I did not find the contract that people wanting to participate in the "partner program" amnd be paid for their postings must agree to.

Medium is free to advertise which ever of its offerings it chooses to, unless it has specifically agreed otherwise in its contracts. It is under no obligation to advertise in accord with the nu,mber of postings, or thei popularity, or any estimate of the revenue each contributes. It may advertise the postings that will bring it the most revenue, if it so chooses. That may or may not be smart business, but it is fully legal unless it has promised otherwise.

Not of the documents that I read, nor that were quoted in this thread, include any promise or implication on how Medium will distribute its promotional efforts, or indeed even if it will make any.

OP has drawn an analogy to a more traditional publishing house. Such publishers often promote some authors more than others. There have been cases where such publishers received a disproportionate share of their revenue from a single author or a small group of authors, but promoted more heavily other authors who it felt gave the house greater prestige, or better long term prospects. I do not know of any court case holding such practices illegal.

Unless there is language in Medium's contract with its posters promising equal or in some sense "fair" distribution of promotional efforts, it has no obligation to do so under any law that I know of. An author may choose to withdraw his or her work at any time if dissatisfied with Medium. An author may also publicly denounce any perceived unfairness and try to persuade others not to participate or not to subscribe. An author can try to negotiate a better contract. That is, I think, the limit of an author's rights in such a matter. Of course, anyone can sue for just about anything, but i see no plausible basis on which such a suit could succeed.

11
  • The way I see it, the problem is that these general authors are the primary means by which Medium supports itself as a business. These authors are being used by the platform, even though they have the expectation of a reasonable chance of making money. I would probably say that the closest law that might apply is one involving pyramid schemes, for similar reasons. However, there's also another issue. Medium is in California. Medium's writers may very well be deemed employees there. Aug 22 '19 at 23:19
  • @Daniel That may make the authors unwise to agree to the deal, or not to withdraw. It might arguably make the deal unethical, although I don't agree with that view. It doesn't have any relevance for the legality of the deal. Nothing in the law requires a business to treat those it depends on well. Nor is this a pyrimid scheme in any legal sense. People are being actually paid for actual work. They may be paid less than they expect or perhaps deserve, but as long as the contract is not violated, and no law provides otherwsie, there is no legal issue. Aug 23 '19 at 0:53
  • I'd have to look into the arguments for the issues with pyramid schemes. But there's also the employment law issue, as Medium is a corporation that is bound by California law. Aug 23 '19 at 1:00
  • "People are being actually paid for actual work." This is another issue. The people are not being paid "for their work." They're paid only when people clap, and Medium is diverting readers away from them and towards their own authors. Aug 23 '19 at 1:03
  • @Daniel I would be surprised if such an arrangement was rueld to be employment, but I haven't checked CA law on that point. But even if they are employees, there is no rule or law requiring employed to have equal pay or equal rates, or to be t4rated "fairly". There are various specific laws on what an employer must do, and it may be that M is not complying, but It probably wouldn't be even if all its promotion was for "independent" authors. Aug 23 '19 at 1:03

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.