Free for a Fee

By Eric Goldman

Fraley v. Facebook, Inc., 5:11-cv-01726-LHK (N.D. Cal. Dec. 16, 2012)

. . . . Facebook collects user preferences through its semantically ambiguous “like” button and then uses that data to show ads to the users’ friends with a seeming endorsement. . . So Sponsored Stories creates a zero-sum game: I as a user probably don’t get any value from the public presentation of my implicit endorsement (if anything, it might hurt my position with my friends), but Facebook and its advertisers benefit from it. . . .

To me, this marketplace response is adequate. To plaintiffs’ lawyers, however, Sponsored Stories gives another reason for a litigation fiesta. Remarkably, unlike so many other “privacy” lawsuits against Internet companies, this lawsuit survives the motion to dismiss–dramatically increasing the odds that Facebook will be writing a check for this so-called “feature.”

This is a rich and interesting opinion by Judge Koh that has something for everyone to “like” (or dislike). Some of the highlights:

Article III Standing

In a ruling that bucks a mini-trend, Judge Koh upholds the case from an Article III standing challenge. She says that violation of a statutory right (in this case, California’s publicity rights statute) automatically satisfies the actual harm requirement of Article III standing.

more

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