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Lawsuit over Facebook ‘sponsored stories’ rolls forward

Sponsored story

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.

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