A California federal judge on Friday turned aside Facebook’s attempt to dismiss a class action alleging that the social networking site’s “sponsored story” advertisements violate state law regarding commercial endorsements.
“Plaintiffs have articulated a coherent theory of how they were economically injured by the misappropriation of their names, photographs, and likenesses for use in paid commercial endorsements targeted not at themselves, but at other consumers, without their consent,” wrote U.S. District Judge Lucy H. Koh in Fraley v. Facebook.
At issue in the case is a Facebook’s advertising practice called “sponsored stories.” Sponsored stories appear on a Facebook member’s profile page and typically consist of another member’s name, profile picture, and an assertion that the person “likes” a particular advertiser. Sponsored stories are typically generated when another member clicks on the “like” button on a company’s Facebook page.
Facebook launched its sponsored stories program on Jan. 25, 2011, enabling the program for all Facebook members by default.
The lead plaintiff in this case is Angel Fraley of Seattle, Washington. Fraley is registered on Facebook with the name Angel Frolicker.
According to Fraley’s complaint, she visited Rosetta Stone’s Facebook profile page and clicked the “like” button in order to access a free software demonstration. Subsequently, her Facebook user name and profile picture 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.”
Of course, this type of targeted marketing is an advertiser’s dream, but Fraley and her co-plaintiffs think that Facebook’s practice of appropriating their names and likenesses for commercial endorsements violates a California statute protecting one’s right of publicity.
The state law prohibits the use of “another’s name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods or services, without such person’s prior consent.”
Fraley also contended that Facebook’s sponsored stories violated California’s unfair competition law, which generally prohibits “any unlawful, unfair or fraudulent business act or practice.”
Fraley filed her putative class action in the friendly confines of the Santa Clara County Superior Court in California on March 11, 2011, but Facebook responded quickly by removing the lawsuit to the U.S. District Court for the Northern District of California.
Facebook thereafter launched a multi-pronged effort to have the lawsuit dismissed, but on Dec. 16 the putative class action escaped Facebook’s motion to dismiss largely unscathed.
As a threshold matter, Facebook contended that Fraley and her co-plaintiffs could not establish Article III standing.
Judge Koh rejected this argument, concluding that the alleged violation of the plaintiffs’ individual statutory rights under California law constituted “an invasion” of a legally protected interest for Article III purposes.
“Plaintiffs assert that they have a tangible property interest in their personal endorsement of Facebook advertisers’ products to their Facebook Friends, and that Facebook has been unlawfully profiting from the nonconsensual exploitation of plaintiffs’ statutory right of publicity,” Koh wrote.
Next up, the court rejected Facebook’s contention that it enjoyed immunity under the federal Communications Decency Act.
“Plaintiffs allege that they themselves have no control over whether to post a particular company’s name or logo, and that Facebook maintains sole control over whether to display a Sponsored Story at all. …
“Based on plaintiffs’ allegations, [Facebook] appears to be a content provider, in addition to being an interactive computer service provider. CDA immunity ‘applies only if the interactive computer service provider is not also an “information content provider,”’ and therefore, construing all facts in the light most favorable to plaintiffs, [Facebook] is not at this stage entitled to CDA immunity,” the judge wrote.
Turning to the nuts and bolts of the plaintiffs’ claim under the state’s publicity statute, the court rejected the argument raised by Facebook that its sponsored stories advertising program fell within the scope of the law’s “newsworthiness” exception for which consent to use one’s identity is not required.
“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 broadcast or account, or any political campaign,’ the court does not find it appropriate to dismiss the claim under the newsworthiness exception,” Judge Koh wrote.
Moreover, the judge determined that the plaintiffs could show injury under state publicity law.
“Plaintiffs here have made specific allegations that their personal endorsement of Facebook advertisers’ products are worth two to three times more than traditional advertisements on Facebook, and that Facebook presumably profits from exploitation of this calculable commercial value,” the court said.
For related reasons, the judge declined to dismiss the plaintiffs’ unfair competition claim, explaining that the plaintiffs’ have successfully alleged that Facebook’s advertising practice “is contrary to a statutorily declared public policy of preventing the nonconsensual appropriation of an individual’s name, photograph, or likeness for commercial gain.”
– Pat Murphy