You may remember a big PR flap last month about Facebook‘s terms of service, followed by Facebook backing down and promising to involve users in a self-governing process of drafting their future terms. This is an interesting step with little precedent amongst commercial web sites. Facebook now has enough users to be the fifth largest nation on earth (recently passing Brazil), and operators of such immense online societies need to define a cyber-government which satisfies their users while operating lawfully within a multitude of jurisdictional boundaries, as well as meeting their legal obligations to the shareholders who own the company.

Democracy is an intriguing approach, and it is encouraging that Facebook is considering this path. Unfortunately, after some review my colleagues and I are left thoroughly disappointed by both the new documents and the specious democratic process surrounding them. We’ve outlined our arguments in a detailed report, the official deadline for commentary is midnight tonight.

The non-legally binding Statement of Principles outline an admirable set of goals in plain language, which was refreshing. However, these goals are then undermined for a variety of legal and business reasons by the “Statement of Rights and Responsibilities“, which would effectively be the new Terms of Service. For example, Facebook demands that application developers comply with user’s privacy settings which it doesn’t provide access to, states that users should have “programmatic access” and then bans users from interacting with the site via “automated means,” and states that the service will transcend national boundaries while banning users from signing up if they live in a country embargoed by the United States.

The stated goal of fairness and equality is also lost. The Statement of Rights and Responsibilities primarily assigns rights to Facebook and responsibilities on users, developers, and advertisers. Facebook still demands a broad license to all user content, shifts all responsibility for enforcing privacy onto developers, and sneakily disclaims itself of all liability. Yet it demands an unrealistic set of obligations: a literal reading of the document requires users to get explicit permission from other users before viewing their content. Furthermore, they have applied the banking industry’s well-known trick of shifting liability to customers, binding users to not do anything to “jeopardize the security of their account,” which can be used to dissolve the contract.

The biggest missed opportunity, however, is the utter failure to provide a real democratic process as promised. Users are free to comment on terms, but Facebook is under no obligation to listen. Facebook‘s official group for comments contains a disorganised jumble of thousands of comments, some insightful and many inane. It is difficult to extract intelligent analysis here. Under certain conditions a vote can be called, but this is hopelessly weakened: it only applies to certain types of changes, the conditions of the vote are poorly specified and subject to manipulation by Facebook, and in fact they reserve the right to ignore the vote for “administrative reasons.”

With a nod to Bruce Schneier, we call such steps “democracy theatre.” It seems the goal is not to actually turn governance over to users, but to use the appearance of democracy and user involvement to ward off future criticism. Our term may be new, but this trick is not, it has been used by autocratic regimes around the world for decades.

Facebook’s new terms represent a genuine step forward with improved clarity in certain areas, but an even larger step backward in using democracy theatre to cover the fact that Facebook is a business and its ultimate accountability is to its shareholders. The outrage over the previous terms was real and it was justified, social networks mean a great deal to their users, and they want to have a real say.  Since Facebook appears unwilling to actually do so, though, we would be remiss to allow them to deflect user’s anger with flowery language and a sham democratic process. For this reason we cannot support the new terms.

[UPDATE: Our report has been officially backed by the Open Rights Group]