Facebook sponsored stories and rights of publicity

An hour or so ago, Eric Goldman tweeted links to a proposed settlement agreement and a Facebook legal brief, both pertaining to Fraley v Facebook, a suit about Facebook's use of a user's identity and likeness to endorse the wares of Facebook advertisers to that user's Facebook friends.

According to the Facebook brief (which is of course a work of advocacy, not an opinion of a court), the company has, through the discovery process, decimated the claims of the Facebook users asserting violations of California laws protecting rights of personality and against unfair competition (earlier in the course of the litigation, Facebook appears to have persuaded the judge that unjust enrichment claims should be thrown out).

Along the way, the Facebook brief makes a quietly astonishing statement that you won't find anytime soon in Facebook's promotional materials for advertisers. Countering the claims that users had suffered damages because sponsored stories were more lucrative than normal ads, the brief states that "Facebook proved through expert and fact discovery that it frequently earned less money by running Sponsored Stories."

The word "frequently" could be Facebook's out in future or other contexts. One can imagine a spokesperson saying something to the effect of, "we've worked out those kinks, and since introduced Facebook Exchange, helping advertisers better target sponsored stories, with better graphics and better placement in timelines than those at issue in that old case."

In trumpting the strength of its case, the Facebook brief also asserts that Facebook had user consent all along. One of the benefits of the proposed settlement, the brief argues, is not so much that it calls on Facebook to change its terms to get user consent on endorsements, but instead provides that Facebook's terms of use make it clearer that Facebook profits from that activity.

Here is the text of the proposed, new terms of use verbiage, as found in the proposed settlement agreement:

"About Advertisements and Other Commercial Content Served or Enhanced by Facebook

"Our goal is to deliver advertising and other commercial or sponsored content, such as Facebook Ads and Sponsored Stories, that is valuable to our users and advertisers. In order to help us do that, you agree to the following:

"You give us permission to use your name, profile picture, content, and information in connection with commercial, sponsored, or related content (such as a brand you like) served or enhanced by us. This means, for example, that you permit a business or other entity to pay us to display your name and/or profile picture with your content or information. If you have selected a specific audience for your content or information, we will respect your choice when we use it.

"If you are under the age of eighteen (18), or under any other applicable age of majority, you represent that at least one of your parents or legal guardians has also agreed to the terms of this section (and the use of your name, profile picture, content, and information) on your behalf."

Have another look at the last sentence of the second-to-last paragraph: "If you have selected a specific audience for your content or information, we will respect your choice when we use it." This is something the tech press will find noisily astonishing.

Turning back now to the brief, here is how Facebook describes new user controls over their participation in sponsored stories:

"Facebook has agreed to engineer an innovative new tool to enable Class Members to view, on a going-forward basis, the subset of their interactions and other content on Facebook that have been displayed in Sponsored Stories (if any). This new functionality will provide a level of transparency that does not exist on the site today and is unprecedented on the Internet. [Also], Facebook will create a granular control that will allow Class Members, upon viewing content that has been displayed in a Sponsored Story, to prevent additional displays of those Sponsored Stories, if they so desire."

See also Section 2.1(b) on page 6 of the settlement agreement, which describes the new tools in similar terms.

I don't know if the plaintiffs and their lawyers feel their case is as weak as Facebook argues. But they appear to be okay with this language in the settlement agreement:

"Facebook denies that it committed, or attempted to commit, any violations of law with respect to its users or otherwise. Facebook also denies that Plaintiffs and the Class have suffered any injury or damages as a result of conduct alleged in the Action. Facebook maintains that it has meritorious defenses to all the claims alleged in the Action."

Shades of the consent decree practices of the FTC, at least as they relate to Facebook in the recent past.