For the half-year to 30 June 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Alberto Bellan, Darren Meale and Nadia Zegze.

Two of our regular Kats are currently on blogging sabbaticals. They are David Brophy and Catherine Lee.

Thursday, 29 August 2013

Facebook $20 million settlement in class-action lawsuit over violation of privacy rights

Source: Facebook
In Angel Fraley et al. v Facebook Inc, the US district Court of Northern California approved on 26 August a $20 million settlement to be paid by Facebook for putting users’ names and faces in “Sponsored Story” ads without their permission and without paying them.

This Kat, rummaging through her Facebook account's associated email Inbox, realized she had also received back in February the spam-look-alike Legal notice from Facebook to join the class action lawsuit- and actually treated it as such.

It did explain very well what sponsored stories are in Facebook jargon:

Sponsored Stories are a form of advertising that typically contains posts which appeared on facebook.com [..] and may be displayed, for example, when a Facebook user interacts with the Facebook service (including sub-domains, international versions, widgets, plug-ins, platform applications or games, and mobile applications) in certain ways, such as by clicking on the Facebook "Like" button on a business's, organization's, or individual's Facebook page.”  

Aimed at tablet and smartphone users, these advertisements and logos started appearing in 2011 in the central “newsfeed” rather than on the more hidden right hand corner and while it attracted more the users/consumer’s attention who would click on them, it allowed Facebook to earn a considerable income from advertising. However, in Facebook’s view, even if users have never read the Statement of Rights and Responsibilities (SSR's) -- regrettably not even this IP lawyer/Facebook user does-- Facebook only reused information users had already voluntarily disclosed to their “friends” (including grandparents, co-workers, and friendship request users feel obliged to accept).

The US District Judge found that 150 million Facebook users had their names and /or likeness misappropriated to promote products and services through Facebook’s sponsored stories program Nevertheless, the Court stated that plaintiffs would have a substantial burden in showing they were injured or to determine to which amount they were harmed would litigation be pursed -- it would have been easier to demonstrate harm for of the famous claimants’ horror story including promoting sexual lubricant last Valentine’s Day-- or even to ascertain the standing to bring this action by some users who seldom use their own image or name –like this Kat who is concerned about her privacy (although Facebook discourages such practice!).

The Court held that according to the law, the settlement is “fair, reasonable and adequate”. The $20 million will cover first the class action lawyers’ fees; the rest is to be divided among Facebook users who appeared in Sponsored Stories ads- the very few who eventually claimed it can hope to 15$ per person -  or, if the demand is too great or where “the proof of individual claims would be burdensome or distribution of damages costly”, the money is distributed to non-profits that work on privacy issues (listed in footnote 7 of the Order) under the form of a cy pres payment derived from a charitable trust doctrine.

The Court delivers a happy ending for the parties in the case stating
injunctive provisions [in this case] provide at least some meaningful  benefits to the class members. Facebook has agreed both to provide greater disclosure and  transparency as to when and how member’s names and profile pictures are re-published, and to give  them additional control over those events. Additional injunctive provisions have been tailored to  address the minor-subclass and the parental consent and control concerns related thereto
-- it seems, however to justify Facebook’s slight attempts at violating privacy rights—
As Facebook points out, however, it is a platform for sharing information, which members join  voluntarily. Members are not charged any fees for Facebook’s services, which cost the company  hundreds of millions of dollars to provide. While it does not follow that Facebook has carte  blanche to exploit material belonging to, or regarding, its members in any fashion whatsoever,  neither is it foreclosed from adopting SRRs that are not as “pro-member” or “pro-privacy” as some  might like.”
This Kat who loves to read a good Judgment drafted American-style and enjoys citations such as “Settlement is the offspring of compromise”  (Hanlon v. Chrysler Corp, 9th Circuit, 1998) cannot help but wonder what might have occurred if this case actually followed its due course. 

Catbook - the Facebook for cats
Grumpy Cat book - most famous of social networks cats.

3 comments:

Anonymous said...

Interesting that this is seen as a privacy issue, rather than a copyright issue.

Anonymous said...

I'm not an expert on this, but if a user has submitted their name and photo to Facebook with the expectation that it will show them to the user's friends, it's a bit difficult to argue that Facebook are infringing copyright by indeed showing them to the user's friends. The problem seems to be that Facebook are turning it into a sort of unrequested endorsement; which presumably is legally a different sort of wrong.

Anonymous said...

Anonymous @13:28,

You have not provided a complete picture. It is not a mere matter of Facebook showing a picture to a user's friends. It is what else is going on that matters. It is the (mis)use of that picture, coupled with an advertisment that has not been agreed to that is being contested.

Copyright may apply insofar as a person having copyright in their picture may be surrendoring some Fair Use to Facebook, while retaining some non-Fair Use copying by Facebook.

Facebook may likely contend that their posted policy includes a waiver and assignment to Facebook of any and all copyright. Whether this is deemed enforceable or a contract of adhesion beyond reason remains to be seen.

As to a different sort of wrong, there may in fact be additional wrongs at play, but that does not mean the copyright claim does not exist.

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