Facebook turned five at the beginning of February, and decided to celebrate by updating its Terms of Service. You know Terms of Service—it’s that screen where you click “I Agree” or check a box that says "I have read the terms of service"—almost always without having done anything of the kind.

One of Facebook’s lawyers threw up a note on the website's official blog the day of the change, and that was about it for warning. No fanfare, and no request for re-approval by users. (The previous Terms of Service allowed such changes without notification.) The primary change was in the wording describing Facebook’s license on user content. Previously, the Terms of Service terminated all of Facebook’s rights to your content if you left the site for good. Under the new wording, Facebook retained some rights to the content, which remained subject to the privacy controls you selected for it as a member.

Despite the lack of ruffles and flourishes, the popular blog Consumerist took note of the changes in a post titled “Facebook's New Terms Of Service: ‘We Can Do Anything We Want With Your Content. Forever.’"

Within hours, several Facebook groups sprung up to protest the changes, one with 100,000 members, who left more than 1,000 comments on the wall. Several posters were self-aware enough to enjoy the irony of generating additional Facebook content under objectionable terms: David Night-Craze Saunders of Buffalo, New York, wrote “Thats why we need to start communicating through other means to plan a revolution against Facebook.” Others, like Coleston Pluzak of Toronto, Ontario, seemed less cognizant of the irony of posting things like “Yeah, what a big steaming load of horseshit...You make me sick lawyer fuck.”

The site has a history of backing down in the face of user complaints: Facebook CEO Mark Zuckerberg has become an expert in the art of hustling out vaguely defensive explanations, followed by vigorous consumption of crow. But that didn’t stop the Electronic Privacy Information Center (EPIC) from whipping up a 25-page complaint to file with the Federal Trade Commission. An unnamed Facebook official wound up calling the executive director of the D.C.-based non-profit at home at 10 p.m., asking him to hold the complaint while Facebook worked on the wording for backing down once again. Zuckerberg reverted to the old Terms of Service and now says that they will be revised in the next few weeks as part of a collaborative process.

But even the collective genius of Facebook's 175 million users may not be able to solve the very old problem Facebook faces. Zuckerberg explains it this way: “People want full ownership and control of their information so they can turn off access to it at any time. At the same time, people also want to be able to bring the information others have shared with them--like email addresses, phone numbers, photos and so on--to other services and grant those services access to those people's information. These two positions are at odds with each other.”

The material in contention is by definition semi-public. We’re talking about photos that you posted and others commented on. Comments on other people’s pages. Messages sent within Facebook’s quasi-webmail interface.

Zuckerberg calls the language of the now-revoked Terms of Service “overly formal,” and he’s right. Facebook realized their old Terms of Service didn’t reflect the way people actually used the site, lawyered up to rewrite the rules, and then were surprised when a super-interactive user base dug in and figured out what they were agreeing to. Users scoffed at Zuckerberg’s “we would never do anything to hurt you, baby” reassurances (“In reality, we wouldn’t share your information in a way you wouldn’t want.”) And rightly so, Facebook can and should do better than that.

One might argue, as EPIC likely would in its complaint, that experts at the Federal Trade Commission (FTC) need to get involved because laymen can’t be expected to educate themselves about the complicated legal issues involved in online privacy, contracts, and other issues. But look at the article you’re reading right now. Nearly every link is to a site where someone has delved into the new Terms of Service, parsed the language, thought about the broader issues involved, or otherwise furthered the discussion. For the confused, one blogger even generated a super-simple pictorial guide to the changes. The legalese of the original Terms of Service was translated into snark, to explain what is going to to those whippersnappers in their own language.

Meanwhile, legal challenges about Terms of Service are popping up on the user side as well. Reason Senior Editor Jacob Sullum wrote about the case of Lori Drew, who pretended to be a teenage boy on MySpace and eventually contributed to the suicide of a 13-year-old girl, in which a Los Angeles prosecutor attempted to make a criminal case out of the violation of the MySpace Terms of Service under the Computer Fraud and Abuse Act of 1986, a law designed to catch hackers.

Along with the more infamous aspects of the new Terms of Service, Facebook introduced some changes that offered better legal protections for users, mostly in response to recent legal decisions. Facebook had been governed by the laws of the famously pro-corporate Delaware. The new terms switch that to California, where the customer is always right. Filing class action suits against Facebook is no longer expressly forbidden, since courts have not looked kindly on provisions that reduce consumers' ability to sue in recent years.

In his post about the changes, Mark Zuckerberg uses the analogy of a nation state: “More than 175 million people use Facebook. If it were a country, it would be the sixth most populated country in the world. Our terms aren't just a document that protect our rights; it's the governing document for how the service is used by everyone across the world.”

If Facebook were a country, it would also have one of the most open, responsive governments in the world. Why? Because people can really leave Facebook. There are perfectly good places to go, and low transition costs. Don’t like the way you’re treated on Facebook? Opt for MySpace or LinkedIn, or any number of competitors. First join all the "reform Facebook" groups on Facebook itself you like, but if you don’t get your way, you can always walk away, into the arms of one of the site’s many, many competitors.

People Twittered the heck out of this issue, showing a willingness to hop between media to deal with problems, and perhaps also signaling a willingness to leave Facebook if their concerns went unaddressed.

EPIC ended up holding off on its legal action, but Rotenberg says he’s keeping the FTC complaint "in his back pocket." But as boneheaded as the execs at Facebook can be, the last thing they need is the help of more lawyers and activists. The users have things well in hand.

Katherine Mangu-Ward is an associate editor at Reason magazine.