In an interesting ruling last week a US District Judge allowed a class action lawsuit
against Facebook’s to move forward against it over the practice of “sponsored stories”.
Sponsored “stories,” create an ad based on the “likes” of a member’s Facebook friends.
The ads typically display the friend’s name, photo, and a caption asserting that the person likes a certain advertiser.
The ads are generated when a Facebook member clicks on the “Like” button for a particular page, product, or company.
The plaintiffs claimed that sponsored stories violate California’s Right of Publicity Statute, which prevents the use of a person’s name or photo in a paid advertisement without that person’s consent.
They also allege that they were unaware that the act of clicking on a “Like” button would be considered an endorsement or an “expression of consumer opinion.”
Facebook claimed the like button was a newsworthy event rather than advertising since the plaintiffs are considered public figures to their friends.
The judge rejected the argument finding that “newsworthy actions may be subjects of liability when published for commercial rather than journalistic purposes.”
Here are some of the facts and findings of the Court:
“”At issue here is one of Facebook’s advertising practices in particular, “Sponsored Stories,” which appear on a member’s Facebook page, and which typicallyconsist of another member’s name, profile picture, and an assertion that the person “likes” theadvertiser, coupled with the advertiser’s logo. Sponsored Stories are generated when a member interacts with the Facebook website or affiliated sites in certain ways, such as by clicking on the“Like” button on a company’s Facebook page
“”In this putative class action, Plaintiffs on behalf of themselves and all other similarly situated, allege that Facebook’s Sponsored Stories violate California’s Right of PublicityStatute, Civil Code § 3344; California’s Unfair Competition Law, Business and Professions Code §17200, and the common law doctrine of unjust enrichment.
“Plaintiffs allege thatFacebook unlawfully misappropriated Plaintiffs’ names, photographs, likenesses, and identities for use in paid advertisements without obtaining Plaintiffs’ consent”
“The Plaintiff Angel Fraley, who registered as a member with the name Angel Frolicker, alleges that shevisited Rosetta Stone’s Facebook profile page and clicked the “Like” button in order to access afree software demonstration. Subsequently, her Facebook user name and profile picture, which bears her likeness, appeared on her Friends’ Facebook pages in a “Sponsored Story” advertisement consisting of the Rosetta Stone logo and the sentence, “Angel Frolicker likes Rosetta Stone.”
“Plaintiffs allege that they were unaware at the time they clicked those “Like” buttons thattheir actions would be interpreted and publicized by Facebook as an endorsement of thoseadvertisers, products, services, or brands.”
“Plaintiffs further allege that are often enticed to click on a “Like” button simply to receive discounts on products, support socialcauses, or to see a humorous image”
“Unlike ordinary “Stories” that appear in a member’s News Feed, Sponsored Stories are off-set along with other advertisements paid by Facebook advertisers. The SAC quotes Facebook CEOMark Zuckerberg explaining that “[n]othing influences people more than a recommendation from atrusted friend” and that “[a] trusted referral is the Holy Grail of advertising”
“Onaverage, actions taken by Facebook members are shared with 130 people, the average number of friends a member has”
“Although Facebook’s Statement of Rights and Responsibilities provides that members may alter their privacy settings to “limit how your name and Facebook profile picture may be associatedwith commercial, sponsored, or related content members are unable to opt out of the Sponsored Stories service altogether”
“Plaintiffs allege that Facebook’s practice of misappropriating their names and likenesses for commercial endorsements without their consent (1) violated their statutory right of publicity under California Civil Code § 3344; (2) violated the UCL; and (3) unjustly enriched Facebook. Plaintiffs bring this putative class action on behalf of all persons in the United States who were registeredmembers of Facebook.com as of January 24, 2011, and whose names, photographs, likenesses, or identities associated with their account were used by Facebook in a “Sponsored Story”advertisement.”
“”California has long recognized a right to protect one’s name and likeness againstappropriation by others for their advantage”"
“” The SAC alleges that Facebook’s nonconsensual use of Plaintiffs’ names, photographs, and likenesses in Sponsored Stories violates § 3344, which provides, in relevant part: any person who knowingly uses another’s name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposesof advertising or selling, or soliciting purchases of, products, merchandise, goods or services, without such person’s prior consent, or, in the case of a minor, the prior consent of his parent or legal guardian, shall be liable for any damages sustained bythe person or persons injured as a result thereof.
The statute further provides that a party in violation of § 3344 “shall beliable to the injured party or parties in an amount equal to the greater of [$750] or the actualdamages suffered by him or her as a result of the unauthorized use,” and shall disgorge “any profitsfrom the unauthorized use that are attributable to the use and are not taken into account incomputing the actual damages.”
“Nonetheless, the Court is not convinced that Defendant gains much from its own argument.”
“While the Court agrees that Plaintiffs’ assertion of their status as local “celebrities” within their own Facebook social networks likewise makes them subjects of public interest among the sameaudience, even newsworthy actions may be subjects of § 3344 liability when published for commercial rather than journalistic purposes.”
“The Ninth Circuit has squarely held thatthe commercial use of a person’s newsworthy acts may nonetheless still result in liability under §3344.
“”Thus, even if theunderlying actions taken by Plaintiffs are newsworthy, Plaintiffs assert that Facebook’s commercial use of those actions in Sponsored Stories removes them from the scope of § 3344(d)’s newsworthy privilege.”
“The Court agrees. Because Facebook’s publication of Plaintiffs’ ‘Likes’ is alleged to be for commercial advertising purposes and not part of “any news, public affairs, or sports broadcastor account, or any political campaign,” the Court does not find it appropriate to dismiss the claimunder the newsworthiness exception provided in § 3344(d).”