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Facebook Accused of Misappropriating Users' Identities for Web Ads

3 Apr, 2012 By: Arthur Yoon, Jeffrey Richter

Facebook users have filed a class action lawsuit – Angel Fraley v. Facebook Inc. – in the U.S. District Court of Northern California – alleging that the popular social media website unlawfully misappropriated its users’ names, photographs, likenesses and identities for use in paid advertisements, known as “Sponsored Stories,” displayed on Facebook website pages of the users’ friends without obtaining the users’ consent. Although Facebook attempted to dismiss the lawsuit, the court permitted the lawsuit to proceed, determining that Facebook’s practice might be an unfair and illegal exploitation of its users.

In particular, the court ruled that plaintiffs could pursue claims under California’s Right of Publicity Statute, which provides that, in general, any person who knowingly uses another’s name, voice, signature, photograph or likeness, in any manner for purposes of advertising without such person’s consent, may potentially be liable for actual damages or minimum statutory damages of $750, punitive damages and attorney’s fees and costs.

Facebook allegedly created content by deceptively mistranslating users’ actions, such as clicking on a “Like” button on an advertiser’s page, into the words “[User] likes [Brand],” and further combining that text with the user’s photograph, the advertiser’s logo, and the label “Sponsored Story.” Plaintiffs contended Facebook transformed the character of users’ words, photographs and actions into a commercial endorsement to which they allegedly never consented in any form to the use of their names or likenesses in Sponsored Stories.

They noted that Sponsored Stories were not even a feature of Facebook at the time they became registered users and that they were never asked to review or renew their Terms of Use subsequent to Facebook’s introduction of the Sponsored Stories feature, which operated on an opt-out basis. Even if Facebook’s Statement of Rights and Responsibilities could be broadly construed to encompass Sponsored Stories, the users contended that their “consent” was fraudulently obtained.

The court ruled that the users had standing to sue for economic injury from Facebook’s alleged conduct. The users alleged that they suffered economic injury because they were not compensated for Facebook’s commercial use of their names and likenesses. The users claimed that their individual endorsement of products, services and brands to their friends had concrete, provable value in the economy at large, which could be measured by the additional profit Facebook earned from selling Sponsored Stories compared to its sale of regular advertisements, according to the court. Because Facebook’s publication of users’ “Likes” was alleged to be for commercial advertising purposes and not part of any news, public affairs, sports account or political campaign, the claims could not be dismissed under the statute’s newsworthiness exception.

Whether Facebook will be ultimately found to have violated the statute and actually pay damages to its users remains to be seen. Facebook’s Statement of Rights and Responsibilities, Privacy Policy or Help Center pages could be determined later in the court proceedings to have provided Facebook the right to use its users’ names, images, and likenesses in the form of Sponsored Story advertisements for Facebook’s commercial gain.

Nevertheless, the initial lesson for advertisers from this case is clear. An advertiser should make sure that it obtains an endorser’s unambiguous consent to use his or her identify in advertising products or services to avoid claims of misappropriating an individual’s identity for commercial gain.

Jeffrey Richter and Arthur Yoon are partners at Los Angeles-based Finestone & Richter. They can be reached at (310) 575-0800, or at and

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