California Facebook Settlement Protects Right of Publicity

In California, the right of publicity isn’t reserved for “reality” stars and actual famous people: it applies to everyday types, too.

Last month, Facebook settled a claim with California residents over the company’s “Sponsored Stories.” The plaintiffs challenged the posts, arguing that using a person’s image to promote a product without the person’s consent violates the state’s right of publicity laws. This week, the terms of the Facebook settlement became public: Facebook will cough up attorneys fees and $10 million cy pres to charity.

What are "Sponsored Stories" and how are they worth a $10 million penalty/donation?

As FindLaw's Courtside explains, "When a Facebook user 'likes' a product or company, or posts something related to a product or company, Facebook will sometimes present those likes or posts to other users in that person's network as a paid promotion for the product or company." Facebook COO Sheryl Sandberg has stated that friend-endorsed "stories" are worth two to three times the value of a non-endorsed ad on Facebook.

Under the terms of the Facebook settlement, the company must start providing notifications to users when their posts might be used as Sponsored Stories, and offer users a way of opting out of Sponsored Stories.

The terms of the Facebook settlement mandate:

• A revision of the Facebook terms (Statement of Rights and Responsibilities, or "SRR"), section 10.1 that clarifies to users that they give Facebook permission to use their name and likeness in Sponsored Stories ads,
• A mechanism that will allow users to see and control which actions they have taken that have led to their being featured in Sponsored Stories ads.
• Additional provisions requiring that Users under 18 years of age represent that they have received parental consent to be featured in Sponsored Stories ads.
• Additional provisions obtaining consent from parents or legal guardians of user under 18 years of age establishing their consent to have these minor Users featured in Sponsored Stories.
• Additions to Facebook's "Family Safety Center" that explain Sponsored Stories ads and enable parents to prevent their children from being featured in Sponsored Stories ads.
• An opportunity for plaintiffs' counsel to review Facebook's website materials regarding advertising and ensure that Sponsored Stories are clearly identified as ads, with the right to move the court to call for an independent audit (for which Facebook will pay) if necessary.

(Brief thanks to TechCrunch for gleaning the terms from the settlement.)

How do you think the Facebook settlement will affect the company? Are you going to opt out of Sponsored Stories?

Related Resources:

• Facebook to Pay $10 Million to Settle Suit (Reuters)
• Court Vacates Punitive Damages in Hustler Right of Publicity Case (FindLaw's Eleventh Circuit Blog)
• Facebook Plaintiffs Amend $15B Lawsuit on Day of Facebook IPO (FindLaw's Courtside)