Facebook Can Be Sued For Like Ads & Allows A Class Action Suit To Move Forward

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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).”

About Michael Berkens

Michael Berkens, Esq. is the founder and Editor-in-Chief of TheDomains.com. Michael is also the co-founder of Worldwide Media Inc. which sold around 70K domain to Godaddy.com in December 2015 and now owns around 8K domain names . Michael was also one of the 5 Judges selected for the the Verisign 30th Anniversary .Com contest.

Comments

  1. John Berryhill says

    “Plaintiffs allege that they were unaware at the time they clicked those “Like” buttons that their actions would be interpreted and publicized by Facebook as an endorsement of those advertisers, products, services, or brands.”

    …Plaintiffs were further unaware at the time they clicked the “Please come to my house and hit me with a baseball bat” that their actions would be interpreted as an invitation to go to their houses and hit them with a baseball bats.

    Plaintiffs were unaware that in order to continue to receive oxygen, they would have to keep breathing.

    Plaintiffs were unable to find their ass with both hands and a map.

    When asked “After which saint is the city of Saint Paul named?” 90% of plaintiffs answered “don’t know.”

  2. Law Her says

    Plaintiffs were unaware that they required a case with merit as there are so many scum sucking lawyers out there willing to take on theres meritless cases apparently for their own enrichment and without regard for the matter of law.

  3. LindaM says

    In my opinion the plaintiffs have plenty of case, from what I see it is a clear breach of the California law. Laws are there to protect stupid, uninformed or illiterate people just the same as big corp. Since when have ‘friends’ (by way of a facebook friending) become ‘public celebrities’ ?
    That facebook views friends as such is certainly news to me and I am neither stupid nor illiterate. That leaves uninformed – I dont think clicking the word ‘like’ is sufficiently informed consent to be turned into a ‘local celebrity’, a newsworthy incident, or offer an open-ended endorsement on a product.

  4. oh says

    agree with lindam.

    unfortunately lawsuits are the only “user feedback” facebook pays attention to.

    if silly lawsuits are the only way to reign in the absurd privacy violations of companies like facebook and the ones who facebooks sells off their user data to, then maybe it’s a worthy tradeoff.

    how many facebook users are just trying to communicate with their friends? this is a simple thing. are we to believe that in order to do this simple thing, they must agree (by clicking a button with no disclosure as what it triggers) to have their likeness used to sell products?

  5. LindaM says

    Pondering some more, and also the current debate raging about corporate personhood (and the contingent privacy rights attached) – it is not beyond the realms of possibility that Facebook claims more privacy rights than its ‘celebrity’ users. Try asking them about financials, or even just what they ‘like’ lol crazy times.

  6. Louise says

    @ JohnBerryhill, How would like to discover an obscure comment you made became attached as an endorsement to an ad or commercial, supplying your name and photo? Comments are content now; they’re searchable! As a lawyer, you would have something to say about it.

    Judge Koh noted in the decision:

    “Plaintiffs here have quoted explicit statements by Facebook’s own CEO and COO that friend endorsements are two to three times more valuable than generic advertisements sold to Facebook advertisers. Plaintiffs here have furthermore identified a direct, linear relationship between the value of their endorsement of third-party products, companies, and brands to their Facebook friends, and the alleged commercial profit gained by Facebook.”

    Judge Lucy Koh quoted Facebook COO Sheryl Sandberg’s saying, “This is the illusive goal we’ve been searching for, for a long time; [m]aking your customers your marketers. […] 68% more people are likely to remember seeing the ad with their friend’s name. […] 300% more likely to purchase.”

    So, @ JohnBerryhill, you’d be fine to find your name and photo attached to a product ad, based on a previous comment you made?

  8. LindaM says

    Who knows where it would go, it could get *really* nasty for example:

    An average person, Miss A sees a well camoflauged sponsored ‘infomercial’ about some or other awesome new family planning advances on FOX, CNN or other mainstream channel, disguised amongst the rest of the so-called ‘news’. They click ‘like’ because they unwittingly think it is a fair or interesting overview of facts, and yes they dont mind their friends seeing that they do indeed ‘like’ the article.
    They are most definitely not aware that they just handed a bunch of defined legal rights away, became a person or ‘celebrity’ of public interest under the meaning of the California stature re newsworthiness, and certainly did not intend to endorse any specific products or services.
    Maybe a general clause was buried in the ToC they originally agreed to, perhaps, but to their reasonable understanding such specific rights re this article are still properly reserved by them today. They think no more of it and get on with their day.

    2nd person – Mr B, Miss A’s insanely rich and soon-to-be-married devout christian boyfriend, logs into his account to show the family – only to be greeted with aforementioned fiancee seemingly personally advertising and enthusiastically endorsing the latest in ‘easy, safe, and above all low-cost’ abortion clinic membership (run by the ‘family planning’ company cunningly advertising at mainstream media infomercials). For the avoidance of doubt there is even a grinning photo of the lucky lady to ‘prove’ just how much she approves and agrees it is a great deal compared with other lower quality abortion clinics and so on.
    Nice. Try explaining that one to the old dears.

    A (and B) suffer significant real, irreparable and unquantifiable damages as a result of a non-consensual and entirely avoidable gross misrepresentation of their expressed opinion or intentions.
    Who knows whether such a thing would be possible on the social network platform, maybe they have a no-abortion policy, its irrelevent tho because similar things will happen in other prod/serv categories Im sure. You’ll get Jewish people, and muslims and god knows who else, proudly advertising lovely juicy organic pork sausages or some other unwelcome item, when they only clicked like on a sponsored story about farm animal welfare etc etc.
    Are they going to employ an army of people to police the ads to prevent this twisting by the advertisers? I dont think so – even mighty Google have thrown considerable tech resources and even more manpower at trying to keep adwords ads within the parameters they have decided on, among plenty of examples the canadian pharmacy incident maybe best indicates it to have broadly failed – and this is only half of the equation as the search intention is plainly given. FB have both sides to wrestle with.

    I believe it was this kind of unfair capitalisation of unwitting/unwilling individuals by advertisers, and the injury which may follow, that the lawmakers had in mind when they made the law that fb are accused of blatantly disregarding. They left the damages open ended because such abuse could realistically cause huge losses.
    Its not a silly case at all (imo) – it is a defining one that basically strikes to the core of fb’s hypothetical valuation as it is an intrinsic part of what they might refer to as a business plan. When does a plan become a plot.
    Yeah this story pissed me off, sorry rant over now 🙂

  9. FB's Wrong says

    Facebook has in fact broken these laws; the plaintiffs are going to win.

    Beyond that, however, is what FB using “Likes” in this manner is going to mean:

    How often (or much longer) are FB member/users even going to use the like button (which has become an important, valuable marketing component to so many product and service providers); knowing doing so generates intrusive, misleading, and unintended ads to their chosen friends and family?

    Next.

  10. LA Law says

    “Plaintiffs were unable to find their ass with both hands and a map.”

    Lawyers on the other hand need no hands and no map to find their ass…all that is required is a mirror!

  12. Louise says

    LindaM is my hero, too. So is @ John Berryhill, but I think you’re going to change your mind on this. Great example, @ LindaM! I had to look up cookie recipes for my mom on the LA Times website, and had to “like” its Facebook page to view the recipes. Wonder what I am endorsing!

  15. Kyle says

    leaving a “like” on facebook is just as voluntary as shopping at a grocery store or talking about a retailer to your friends. If Britney Spears shops at Cosco and then more of her fans start shopping there, is Spears entitled to a royalty?? the answer is of course not! the same can be said about word of mouth advertising. Besides, as far as I’m aware, everything that gets put on Facebook becomes property of Facebook, legally, everything from personal info to photos to yes, even your “likes”.