Net 303/503 Policy Primer: Pozible, crowdfunding platform

1. NET 503: ASSIGNMENT 2. POLICY PRIMER OCT 2013
By Bernadine Phelan
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

2. What is
?
Australia’s first and largest crowdfunding platform, which
connects supporters with potential projects in the arts, culture,
business start-ups and social philanthropy.
◦ Crowdfunding is about creative community. In its own words: “Pozible
can also be a gateway for discovering and supporting inspirational
projects and thinkers directly. . . project supporters become a vital part of
a true creative community.
To join that community, you must become a Member and
accept their Terms and Conditions, which includes their
Privacy Policy.

3. Who is it for?
Anyone. Crowdfunding is reaching out far beyond the wannabe
bands, the filmmakers, charity projects and struggling artists.
◦ Crowdfunding now supports: Scientific research, independent journalism,
shared workshops for city bikers who love a good latte with their lathe, and
a very Australian project, crowdfunded alcohol (albeit high-end, both in
aesthetic and market).
Pozible’s T&Cs have been written with their target audience in
mind.
The language and tone is inclusive. The T&Cs are not overlong, nor written in obfuscating legalese.

4. A little bit of context
Crowdfunding isn’t new.
◦
In New York 1884, more than 125,000 people donated a total of
$100,000 to build a pedestal for the Statue of Liberty (Abrahams and
Johnson, 2013).
Credit: Rakkhi
Samarasekera
Jan 2011.
But it is now a significant* contributor in the economy.
Pozible began in 2010 and has raised more than $15m AUD
(Sept 2013), hosting more than 4500 individual projects.
(tumblr, Wikipedia)
◦
Its largest project was raising $243k AUD for Patient 0, a multiplayer
role-playing zombie game.
*A US study found that, in 2012,
donor and reward crowdfunding
grew 85% to USD $1.4b
(Massolution, 2013)

5. How does it work?
The Project Creator proposes a project and places the listing
on site with supporting information, such as video, images and
a story; all with the objective of garnering support. It is a
competitive process.
◦ Creators offer a variety of “rewards” for monetary support – none of which
can be for equity under Australian regulations.
◦ Pozible projects are limited to 60 days and are based on the “All Or
Nothing” (AON) crowdfunding model.
◦ AON means pledged money is taken only after the Project reaches its
target. Creators get nothing if the target is not reached.
$

6. What does it take?
Pozible charges a 5% fee for successful projects (not listed in
their T&Cs).
The “fees must never be mentioned on project listings”. No fees
are taken by Pozible for unsuccessful projects.
There are risks because crowdfunding is not protected by the
usual investment rules of disclosure. Also, the scale of risk may
be greater because of the larger number of potential
supporters.
(CAMAC Sept 2013)
Note: when you pledge support on a
crowdfunding site in Australia, you are
not covered by Australian Consumer
Law. (Sharma 2012)

7. What are your rights?
You are essentially carrying out a transaction using your
own judgment – a point they make several times in their
commendably clear, “plain English” T&Cs and Policy
statements.
◦ “Pozible is not directly involved in the transaction between Project
Creators and Project Supporters.”
◦ “As a result, Pozible has no control over the: quality, safety,
morality, legality. . . truth or accuracy of the listings.”
Pozible doesn’t guarantee that the
project can, or will, be completed – so
you need to assess the level of risk you
are prepared to take, as either a
Creator or Supporter.

8. Just to be clear. . .
Any commitment you make on the site,
any information you provide,
is at your own risk.

9. Who is liable for what?
You are, whether as a Project Creator or Supporter – for
content, functionality, delivery. For Everything.
Again, Pozible draws the clear distinction that it is an online
platform only and cannot be held liable for the content posted
by its members or any outside parties on its site.

10. Who can use the service?
Anyone can be a Creator or Supporter, once they have signed
up as Member.
The only exception is Children under the age of 18.
◦ If you are under the age of 18 years, you can use this service only in
conjunction with and under the supervision of your parents or guardians.
◦ Note: are other CF sites which have been set up to capitalise on [i.e.
exploit] the generous nature of children: Piggybackr which calls itself “Kidfriendly”, helping young students raise money.
Credit: Heleana Genaus under CreativeCommons3.0 from
Rising Sun Workshop project http://pozible.com/risingsun

11. What you provide
You are wholly responsible for your own information.
◦ “We act as a passive conduit for your online distribution and publication of Your
Information. ”
They require full name and email address for membership,
although you can exclude email address from publicly available
information.
Again, the onus is on you to show that your content is not:
◦ Misleading, false, inaccurate or deceptive
◦ Defamatory, libellous, fraudulent
◦ Infringes any other party’s copyright, patent, trademark, trade secret or other
proprietary rights or intellectual property rights, rights of publicity, confidentiality
or privacy
◦ Obscene, inappropriate or unlawful or contain any content that is prohibited –
the test of which is at Pozible’s “sole and absolute discretion”
◦ Containing any malicious code

12. What they use
◦ “Our primary purpose in collecting personal information is to provide you
with a smooth, efficient, safe and customised trading experience. This
allows us to provide services and features that most likely meet your
needs, and to customise our services to make your experience safer and
easier.” (Pozible T&C 2013)
The practices they list include:
◦
Tracking demographics, interests and behaviour onsite, using cookies,
and collecting other users’ comments about you.
◦
Billing address, credit card details and bank account details – to
facilitate transactions
Pozible admits that it will provide
*aggregated information to
Partners and other parties for
marketing and promotions. “We
do not disclose… any information
that could be used to identify you
personally.”

13. Your data: who sees it?
First, the good news: they don’t sell on your information to third parties.
Now, the not-so-good news. They give it away. Not explicitly. But they cannot protect you
from what other users of the site – genuine fellow crowdfunders or not – will do with the
information you provide.
◦ The same is true of most social network sites. Under Goettke and Christiana’s (2007) Privacy Protection scale,
Pozible would rate as Tier Two, where there is insufficient privacy protection, even with user awareness. Pozible
is just more transparent than most.
• Example: I was unable to alter more than the default
turning off wider internet search of my member profile,
and email address visibility, and opt out of contact.
• Despite this, trust levels on site seem high: Creators post
a surprisingly detailed amount of information about
themselves, their lives and their contact information.

14. Your data: who sees it?
Pozible doesn’t promise your personal information will
remain private.
◦ “. . . We may be forced to disclose information to the government or
third parties under certain circumstances. . . or third parties may
unlawfully intercept or access transmissions or private
communications.
In light of the NSA and PRISM
revelations about big data
being extracted from service
providers for government
surveillance, this would seem
a wise qualifier.

15. Your privacy
Privacy terms are stated clearly, in plain English – an approach
they take consistently across the site.
◦ “Your privacy is very important to us. You must read and agree to the terms
of this Privacy Policy before becoming a Pozible account holder.
◦ “As part of the normal operation of our services we collect, use and, in
some cases, disclose information about you to third parties. This Privacy
Policy governs the information we collect about you and your use of
information we provide to you. . .
◦ “Although this may seem long, we have prepared a detailed policy because
we believe you should know as much as possible about our practices so
that you can make an informed decision. ”

16. Your privacy (2)
Their statement about usage seems fair and reasonable.
Pozible says it would only use your information to:
◦ “. . .resolve disputes, troubleshoot problems, help ensure safe trading on
our Site, and enforce our User Agreement.”
But they will also use it to learn from your use to improve their
marketing efforts and customise the site and its services.
They warn you that other users also see your information (and
you theirs – see note).
Case study: Dylan* A random name search
came up with a Member profile. He is both
a Creator and Supporter. He achieved his
goal of reaching the international stage –
but he sacrificed a lot of personal data in
the process, including work, email,
Facebook. Plus, the last projects he
supported, including an erotic iron & strip
show. Of course, he may not mind. In the
same way that other Facebook users can
see your Likes. But at least Facebook only
shows Likes to Friends. Pozible defaults
that all members see all user information.
(*not his real name).

17. How do you get paid?
Pozible prefers the use of PayPal to pay Creators their
pledged amounts on completion of the Project – and
recommends an upgrade to the Premium (Commercial)
version of PayPal.
◦
T&Cs outline the detail Creators must give on their intended Rewards,
and that they must also give their selling policies, such as shipping,
payment, returns.
Supporters use Credit/Debit card and PayPal to pledge.
The T&Cs note that Pozible cannot
guarantee PayPal, Visa or
Mastercard’s reliability or
performance. It cross-references
to, and requires members to
comply with, Visa, Mastercard
and PayPal’s own Acceptable Use
policy.

18. Advertiser rights
The Advertiser grants Pozible a worldwide, royalty-free,
non-exclusive, irrevocable licence to publish, and to sublicence the publication of, the Advertising in any form or
medium, online or other.
Pozible can withdraw any Advertising without giving reason
(even if the Advertising has previously been published by
Pozible).
Members are not permitted to disclose:
◦ “. . . the terms of the agreement, data relating to advertising budgets,
pricing and forecasts.”
Hmmm. Any T&C statements with
“or other” leaves open a very wide
door for all possible future usage
on any platform. Is this something
companies usually agree to?

19. Change on the horizon?
The Australian Government Corporations and Markets Advisory Committee (CAMAC)
released a discussion paper (Sept 2013) to investigate suitable regulations for
crowdfunding operations in Australia, specifically equity-based crowdfunding , which has
not been allowed there before.
◦ It notes that there are risks associated with all types of crowdfunding, particularly in how to ensure that the
online intermediaries (such as Pozible) have done adequate due diligence on the projects offered.
Watch this (crowd) space. . .
$

20. References
Abrahams, N. and Johnson, D. (17 Sept 2013) Crowdfunding rules to change, help Australian entrepreneurs, smh.com.au http://www.smh.com.au/it-pro/itopinion/crowdfunding-rules-to-change-help-australian-entrepreneurs-20130916-hv1pn.html
Corporations and Markets Advisory Committee (September 2012), Crowd sourced equity funding. Discussion paper. Retrieved 23 October 2013 from
http://www.camac.gov.au/camac/camac.nsf/byHeadline/Whats+NewCSEF+Media+Release+%26+DP?openDocument
Goettke, R., & Christiana, J. (2007). Privacy and Online Social Networking Websites. Computer Science 199r: Special Topics in Computer Science Computation and
Society: Privacy and Technology.
Luckerson, V. (2013) The Crowdfunding Economy Is About to Pop, Time. Retrieved 03 October 2013 from http://business.time.com/2013/09/24/the-crowdfundingeconomy-is-about-to-pop/
Massolution (2013) 2013CF The Crowdfunding Industry Report. Retrieved 08 October 2013 from http://www.compromisoempresarial.com/wpcontent/uploads/137356857-Massolution-2013CF-Excerpt-Revised-04182.pdf
Senaratna, A., (15 August, 2013) Sydney Businessmen Successfully Crowdfund Booze Startup, The Concrete Playground. Retrieved 22 October from
http://sydney.concreteplayground.com.au/news/141674/sydney-businessmen-successfully-crowdfund-booze-st.htm
Sharma, M. (29 May 2012) When the crowd funds a flop, what next?, smh.com.au Retrieved 23 October 2013 from http://www.smh.com.au/it-pro/business-it/when-thecrowd-funds-a-flop-what-next-20120529-1zgba.html
Image credits:
Screenshots: www.pozible.com
Statue of Liberty, Rakkhi Samarasekera Jan 2011. Retrieved under Creative Commons, attributed.
Hands and tools: Heleana Genaus under CreativeCommons3.0 licence. Retrieved from Rising Sun Workshop project http://pozible.com/risingsun