U.S. Judge: Lawsuit Against Facebook’s ‘Sponsored Stories’ Can Proceed

The newest iteration of Facebook Ads, sponsored stories, has got the popular social network into hot water in California.  A California based lawsuit was brought against Facebook stating that sponsored stories violate state law and are fraudulent.  U.S. District Judge Lucy Koh rejected Facebook’s bid to dismiss this lawsuit stating:

Plaintiffs have articulated a coherent theory of how they were economically injured by the misappropriation of their names, photographs and likeness

[youtube]https://www.youtube.com/watch?v=ce3P79ktpTk[/youtube]

The basis of the lawsuit is that the sponsored stories are paid ads that pull in personal posts, pictures and names without consent. By displaying this personal information, Facebook is violating California Law regarding commercial endorsements. Here is an excerpt from California Civil Code Section 3344:

(a) Any person who knowingly uses another’s name, voice, signature, photograph, or likeness, in any manner on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of products, merchandise, goods or services, without such person’s prior consent, or, in the case of a minor, the prior consent of his parent or legal guardian, shall be liable for any damages sustained by the person or persons injured as a result thereof.

Sponsored stories have been around since January of this year. Facebook has also been actively testing new ad types including Coupons and Mobile ads.

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