He 'Likes' Me, He 'Likes' Me Not - Facebook's Sponsored Stories Lawsuit And The Proposed Class Settlement

Facebook, Inc. was sued in a class action last year over one of its advertising practices called "Sponsored Stories," which typically consist of a Facebook Friend's name, profile picture, and an assertion that the person (your Facebook Friend) "likes" an advertiser, coupled with the advertiser's logo, featured on your Facebook page or News Feed. The idea is that the target of the advertisement (i.e., you) will be more influenced by the company's advertisement because someone in your network (i.e., your Friend) "likes" that company. The disconnect is that "liking" a page on Facebook does not necessarily mean the user likes that company in the normal sense of the word. For example, one could "like" a page in order to get some promotional benefit from the company or learn more information about the company or its product.

The named plaintiffs, two of which are minors, alleged "Sponsored Stories" violated California's Right of Publicity Statute, Civil Code § 3344; California's Unfair Competition Law, Business & Professions Code § 17200, et seq. ("UCL"); and the common law doctrine of unjust enrichment. Generally, the plaintiffs alleged the way Sponsored Stories worked unlawfully misappropriated their names, photographs, likeness and identities for use in paid advertisements without their consent. Facebook moved to dismiss their claims, arguing lack of Article III standing, immunity under § 230 of the federal Communications Decency Act ("CDA"), and failure to state a claim upon which relief can be granted. Late last year, the California Northern District Court denied the motion except with respect to the unjust enrichment claim.

Notably, the District Court rejected Facebook's argument that the plaintiffs lacked Article III standing, drawing a distinction between the plaintiffs' allegations and other recent District Court privacy cases coming to the opposite conclusion under similar facts (Low v. LinkedIn, iPhone App Litig., and LaCourt v. Specific Media, In re Doubleclick, Cohen v. Facebook), on the grounds that the plaintiffs' allegations were sufficiently particular with regard with what information Facebook used, how it used it, to whom their information was published, how they were economically injured by the use of their information to advertise to others (versus using one's information to advertise to oneself), and how their information inherently had some commercial value (because a Sponsored Story ad was viewed by...

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