
Ohio school districts sue Facebook for accepting ECOT ad purchases - Keverw
https://www.dispatch.com/news/20190411/ohio-school-districts-sue-facebook-for-accepting-ecot-ad-purchases
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adamiscool8
On a quick read of the relevant statute [0], seems like they'd have to show
the Facebook ad buys were made with actual intent "to hinder, delay, or
defraud any creditor of the debtor" \-- which might be a tough lift when the
ads were to promote enrolment and therefore intended to improve the ability to
repay creditors? Also sounds like Facebook may have been a "good faith
transferee" in receiving the payments.

[0] [http://codes.ohio.gov/orc/1336](http://codes.ohio.gov/orc/1336)

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Gunax
I am not sure I understand how Facebook is even supposed to know about these
things. Does this law really say that you cannot run advertisements if the
business is facing insolvency? What constitutes insolvency, and how is
Facebook supposed to know (especially if it's a private business)?

And while this is a school, other business might be operating in advertising-
heavy industries where running ads is their plan to get out of financial ruin.

~~~
reaperducer
FTA:

 _The districts, which may never be made whole for state funding they lost
when ECOT inflated attendance, are alleging that Facebook knew the online
charter school was financially failing when it sold ads to help ECOT boost
enrollment. That, under Ohio law calls, would be an illegal and “fraudulent
transfer.”_

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Keverw
Seen this and thought it was a bit of a ridiculous lawsuit, maybe a unique
one.

Somehow Facebook was supposed to know about the school's financial problem? I
doubt people in Facebook's office in California are watching the local news
for Ohio.

Facebook just approves ads for content, but as for targeting and budgeting
that's all self-controlled and mostly automated other than ad content being
approved. I believe Google's ad system works a similar way, ad text or image
is approved but as for budget and keywords that's all on you to set up, pause,
resume, etc.

Kinda feel like the school districts are stretching the law here. I wonder if
the school paid with a credit card? Did their bank and credit card network
commit fraud too for allowing the payment to go through?

~~~
henryfjordan
> Somehow Facebook was supposed to know about the school's financial problem?
> I doubt people in Facebook's office in California are watching the local
> news for Ohio.

They took the money, and according the law they shouldn't have done that.
Facebook doesn't get some magical pass because their systems are automated. If
they want to do business, they need to follow the same rules as everyone else.
If their automation doesn't cover all the corner-cases of the law, that's on
them and they should be deprived of any profit derived from their rule-
breaking.

~~~
ars
How far do you want to take that? If some tiny locality passed a law that in
order to accept online advertising you must XYZ, with the penalty in the
millions - would you expect Facebook to follow that?

What about another country?

Would it not be more reasonable to require Facebook to have a physical
presence in the locality in order to be bound by its laws?

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rhizome
How would the tiny locality establish jurisdiction, or even standing? Locate a
branch office of Facebook there?

~~~
ars
Well, that's kind of my question, isn't it?

Does Facebook have a branch office in Ohio?

If they do then they have no excuse.

~~~
Keverw
Found the case, it's against Facebook Payments. I'm actually surprised they
have this info online as some court websites are very outdated or under a
paywall. I know one website to pay tickets online in another county for
example traffic tickets(red light cameras, etc) said it wasn't secure in
Chrome yet they asked for sensitive info.

[https://clerkweb.summitoh.net/PublicSite/CaseDetail.aspx?Cas...](https://clerkweb.summitoh.net/PublicSite/CaseDetail.aspx?CaseNo=CV-2019-04-1369&Suffix=&Type=)

Then Facebook has a license in Ohio too since Messenger lets you send money to
people over chat.

[https://www.facebook.com/payments_terms/licenses](https://www.facebook.com/payments_terms/licenses)

So maybe that's one way they can claim power over Facebook.

Looks like the last action on the case was 05/17/2019 where it was assigned to
another judge. So wonder what the next steps are for this case, will be
interesting to follow.

I was just curious about ECOT yesterday since that's the school I did my final
years of high school and was wondering about where people would get their
transcripts if say for college... Looks like records were being transferred to
the last known district of residence, but there's also an email if you need
help getting them it looks. I'm guessing probably where you lived when you
were last in school then, probably not where you are now if you moved since
then. The Educational Service Center of Lake Erie West in Toledo was the
sponsor of ECOT.

[http://www.esclakeeriewest.org/ECOTInformation.aspx](http://www.esclakeeriewest.org/ECOTInformation.aspx)

Also looks like the server is at Franklin County courthouse, the judge there
approved $300,000 to upgrade the server to preserve it, as the FBI is also
looking into the school over the campaign contributions. Then the other big
thing ECOT got in trouble over was the way of accounting attendance.

[https://www.dispatch.com/news/20190801/judge-approves-
moving...](https://www.dispatch.com/news/20190801/judge-approves-moving-ecot-
records-to-new-computer-server)

I liked ECOT. If I needed to ask questions I could send a email(they had a
fake email system, wouldn't go to external addresses) or even call up... I
felt they cared a lot more compared to the last public school I went to.
Actually got way better grades too. But someone else who went to ECOT after me
felt a bit different, so maybe things changed more since I went.

I wish we had more school choice in America, instead of the city school being
the default. Wish more competition but I think schools in general feel
threatened and enjoy having a monopoly on education. Then apparently it's
easier to fire teachers at charter and private schools, so public school
teachers can be lousy and have great job security.

Also other schools could try and claim they lost money too because of this,
but aren't part of the lawsuit... Wonder how that works in the future if say
Facebook lost and ordered to pay which is split between the schools. Can the
other schools join in on the lawsuit or would they need to file separately?
Not sure if it's technically considered a class action, since usually you get
a notice about the lawsuit to join it automatically if you do nothing with a
date to submit a claim or you opt-out to then file your lawsuit or get
nothing. Be interesting if these schools won, and then other schools sue for
the same amount... Then would FB have to pay out twice the amount? Unless they
are only considering what those schools believe they lost directly that was
spent on ad money, and not the total lost statewide, as that would make more
sense - but I think they want the total money spent at FB total not
considering which schools the funds originally came from. As ECOT had students
in all 88 counties across the state, so it sounds like other schools not part
of this lawsuit might be leaving money on the table if FB is found in the
wrong.

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jeffdavis
It seems silly to talk about Facebook "knowing something". Even an individual
who knows something does not necessarily incorporate the implications of that
knowledge into every decision they make. A whole company certainly can't.

~~~
catalogia
Companies shouldn't be held to lower standards the larger they are, which
would be the natural consequence of your line of reasoning (the larger the
organization, the less likely it is to understand its own actions.)

~~~
jeffdavis
My philosphy is decentralization, in large part because of the nature of
information flow.

But in the context of the system we have now, it really is silly to say that
an entity as large as FB "knows" something.

And further, in the context of the lawsuit, trying to say that one company
should be responsible for the internal financial situation of another enforces
centralization -- and will ultimately _favor_ large companies.

~~~
Keverw
Decentralization is interesting, but still some flaws and challenges in
designing systems. Then making them mainstream is also another challenge as
some of these systems are used for bad. But be interesting to make the
internet ran by the people for the people instead of mega-corporations, even
some people aren't happy with what's happening with handing over control of
the .org TLD.

I've always thought it's interesting though how an online company is supposed
to follow the laws of the multiple states, and even worldwide since a website
is accessible worldwide without borders. There are cases where US and European
law conflicts. So a company has to decide which law is better to break. I feel
the US would be way more aggressive, so maybe European law would have to take
the backseat when the company lawyers do a risk analysis. Some stuff is as
clear as mud and seems made up as they go.

Then also at least 2 countries, maybe more require data for citizens to be
held there so that countries own governments can backdoor it. So a backup must
be replicated and stored in that country too.

The top big tech companies have the money to deal with this, but some stuff
like this is very hard for startups. Also wouldn't surprise me if some of
these companies try to push regulations to make it harder for startups, so
they can get comfortable and stay an established player in the market without
needing to compete or innovate. Then also localization of languages seems like
duplicated efforts.

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jeffdavis
"it gets about $800 in state aid per student and loses more than $6,000 for
each local kid who goes to a charter school, instead."

That's confusing. Can someone explain?

~~~
ars
Instead of getting $6,000 for each kid of who to the local school, that money
goes elsewhere, and they only get $800.

AKA students are walking cash machines to the schools.

~~~
sodosopa
Of course they are.

Their education determines how well they can support future community needs.
Public education is a continuous reinvestment in a community.

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sojmq
[https://webcache.googleusercontent.com/search?q=cache:9mhM4-...](https://webcache.googleusercontent.com/search?q=cache:9mhM4-ituxgJ:https://www.dispatch.com/news/20190411/ohio-
school-districts-sue-facebook-for-accepting-ecot-ad-
purchases+&cd=1&hl=en&ct=clnk)

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anm89
This is clearly insane.

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sodosopa
Knowing what we know now, we know that Facebook saying they “did not know”
something is a boldface lie.

~~~
anm89
The logical implication of saying "Facebook saying they did not know something
is always a lie" is that facebook knows literally everything at all times.

That's like some bizarre self hating facebook worship at that point.

