facebook agreed to pay $10 million to settle a lawsuit ... · facebook agreed to pay $10 million to...
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ADVERTISING, MARKETING & PROMOTIONS
>> ALERT
JULY 2012
FACEBOOK SETTLES “SPONSORED STORIES” SUIT Facebook agreed to pay $10 million to settle a lawsuit brought by plaintiffs who claimed that Facebook’s “Sponsored Stories”
service used their name and likeness without their consent in violation of their right of publicity.
Five Facebook users (including one
minor) sued Facebook in California
within weeks of Facebook’s
announcement on January 25, 2011
of its new Sponsored Stories service,
which allows advertisers to incorporate
a user’s name, posts, page “likes”
and other Facebook activity into an
advertisement displayed to some or
all of that user’s friends. One plaintiff
claimed that three days after Facebook
launched the program, and eight weeks
after he had clicked on the “like” button
for Coca-Cola, he began appearing in
Sponsored Stories about Coca-Cola
that were shown to his friends, and at
no point did Facebook obtain his
consent or pay him for his appearance.
The proposed settlement is scheduled
for court approval on July 12, 2012.
If approved, it will result in changes
to Facebook’s platform (for at least
two years) that will lead to Facebook
notifying users and the parents or
guardians of minor users that Sponsored
Stories are advertisements and that a
user’s content, including a user’s name
and likeness, may be featured in
Sponsored Stories. Moreover, users
will be able to see and control the
actions they take that lead to their
content being featured in Sponsored
Stories – and will be able to limit
further use by Facebook in connection
with the service. Notably, the proposed
settlement also requires that Facebook
pay $10 million dollars – not to the
plaintiffs, but to online advertising,
privacy, and/or safety organizations.
RISKS REMAINThe proposed settlement may
make advertisers more inclined to
participate in the Sponsored Stories
service, but there are still risks.
For example, a consumer’s message
that is incorporated into Sponsored
Stories might be deemed the
advertiser’s message, with the same
legal and regulatory rules applying
to that message that apply to other
advertisements, including whether
the message is accurate and able
to be substantiated. There also are
potential copyright and trademark
law issues to keep in mind, as well
as potential privacy concerns.
To help mitigate these risks, advertisers
that seek to benefit from Facebook’s
Sponsored Stories service should
consider taking a number of protective
steps, including:
>> limiting Sponsored Stories to
“likes” and not other information
about users;
THE BOTTOM LINE
Advertisers that believe that there
is value in Facebook’s Sponsored
Stories service should consider
the implications of the proposed
settlement and the proposed changes
to the Facebook platform and terms.
Doing so might help avoid legal
issues for an advertiser participating
in Sponsored Stories or other similar
advertising campaigns or promotions.
>> continues on next page
Attorney Advertising
ADVERTISING, MARKETING & PROMOTIONS>> ALERT
JULY 2012
>> reviewing Sponsored Stories and
having Facebook remove, and
prohibit the further posting of, any
Sponsored Stories that contain
unsubstantiated product claims,
false or disparaging claims about
other company’s products or
services, or content owned by
other parties; and
>> reviewing their privacy policies to
ensure that their use of any data
collected via Sponsored Stories
complies with the policy.
FOR MORE INFORMATION
Allison Fitzpatrick Partner 212.468.4866 [email protected]
Vejay G. Lalla Partner 212.468.4975 [email protected]
or the D&G attorney with whom you have regular contact.
Davis & Gilbert LLPT: 212.468.48001740 Broadway, New York, NY 10019www.dglaw.com
© 2012 Davis & Gilbert LLP