Lawsuit over Facebook ‘sponsored stories’ rolls forward

December 19, 2011 By Geoff Duncan

A judge has ruled that a lawsuit over Facebook's use of friends' "likes" to craft ads using those friends' names can move forward.

U.S. District Judge Lucy Koh has ruled that a lawsuit over Facebook’s “sponsored story” advertisements can move forward, denying Facebook’s request to have the lawsuit dismissed. The suit claims that the practice violates California’s Right of Publicity Statute, which prevents the use of a person’s photo or name in a paid advertisement without explicit consent.

Facebook’s “sponsored stories” began appearing at the beginning of 2011. Facebook assembles the ads using the “likes” of a Facebook user’s friends, then crafts an advertisement — often using that friend’s name and photo — for the Facebook user, usually touting that their friend “likes” a particular advertiser. Facebook builds the ads when a Facebook member clicks a “like” button for a particular company, product, or other item.

Facebook argued that using friends’ names and photos to craft the ads falls under California’s legal definition of “newsworthy,” since Facebook is ostensibly distributing the “news” that a friend likes a particular product, company, or service. According to Facebook, the advertisements should be considered “news” since members of a Facebook user’s social network could be considered public figures, within the context of that social network.

However, in denying Facebook’s request for a dismissal, Judge Koh noted that “newsworthy actions may be subjects of liability” when published for commercial purposes.

The ruling doesn’t necessarily mean Facebook is facing serious legal troubles. Although the plaintiffs in this case have satisfied a judge that their suit has standing, if the case goes to trial they will still have to prove they sustained actual damages from Facebook’s sponsored stories. One of Facebook’s arguments to the court was that someone’s name and likeness would have to have commercial value for any damages to have been incurred, and as we all know, most people on Facebook aren’t very famous.

Showing 5 comments

Ed Schrader at 5:09am 20th December 2011 ...only in Calitigationfornia would this happen
Harry Dixon at 3:00pm 19th December 2011 I don't know about everyone else, but I "Like" a page so I can get their updates! For instance, cream cheese company posts recipes I enjoy. I don't "like" things to share with friends.This is a tie in to the other lawsuit...changing settings with an opt out, instead of an opt in. I opted out, but there are probably people who had no idea this was an option. If they didn't opt out, even if they had their likes set for them only to see, they would appear in an ad. NOT right.
Taylor Jennings at 2:12pm 19th December 2011 Facebook only enables an individual to utilize "Word of Mouth" on a large scale. This is the same thing as me telling somebody I enjoy pizza at Tony Sacco's.That's not a good case when somebody says, "I Liked something and facebook allowed other people to see I liked it!"Did you only "like" it for personal reasons? Would you forget that you liked something otherwise?
Jay Olson at 6:41pm 19th December 2011 How lame!
TechFreak at 10:39am 19th December 2011 Sounds like a decent claim. I think it's stupid that Facebook would use their users in an ad in the first place.