Facebook 'Sponsored Stories' Lawsuit Can Go Forward, Judge Rules
A lawsuit challenging Facebook's "sponsored stories" can go forward, according to a federal judge in California.
Sponsored stories popped up in January as a way to connect "likes" and advertising. Facebook generates the ads when a user's friend "likes" a product, page or company. The ads contain the friend's image, name and endorsement.
A group of plaintiffs sued under California's right of publicity statute, arguing that Facebook misappropriated their names and images.
Facebook submitted a motion to dismiss on two grounds, but the judge found both issues to be anything but clear-cut.
First, the site argued that the sponsored stories are "newsworthy" and thus an exception to the rule. Users are "public figures" to their Facebook friends, which makes their "likes" a matter of public interest.
But the judge pointed out that purely commercial uses of newsworthy actions may nonetheless be misappropriation. She thus declined to dismiss on these grounds.
Facebook also argued that users consented to the sponsored stories when they signed up for the service. Its Terms of Use state that "your name and profile may be associated with commercial, sponsored, or related content ... subject to the limits you place."
While a user cannot wholly opt-out of Facebook's sponsored stories, it can opt-out of individual advertisements. The issue of consent was thus too murky to dismiss the claim.
Though some think the ruling is a bad omen for Facebook's sponsored stories, it probably will have little effect. Chances are Facebook will just change its terms of service.
Related Resources:
- How A New Court Ruling Upends Facebook's Sponsored Story Strategy (paidContent)
- Illegal for Facebook to Track Online Activity After You Log Off? (FindLaw's Technologist)
- Should Facebook Be Subject To Phone Company Regulation? (FindLaw's Technologist)