Thursday, May 24, 2012

UPDATE: Sponsored Story Suit Put to Rest by Facebook?

Facebook logo EspaƱol: Logotipo de Facebook Fr...(Photo credit: Wikipedia)It hasn't been the best of weeks for social media leviathan Facebook. Its stock has performed poorly since its IPO ("It's Probably Over-valued"), shareholder suits already have been filed, and inquiries into the launching itself are underway.

Now comes word, via the Wall St. Journal Law Blog ( that Facebook is on board with a "settlement agreement in principle" with users who allege Facebook commercially exploited them without their consent.

United States District Court for the Northern District of California Judge Luch H. Koh revealed in a Case Management Order that a resolution may be imminent in the case of Fraley v. Facebook (Case No. 11-cv-01726-LKH). Last December, Judge Koh refused to dismiss the putative class action suit against Facebook based on its "Sponsored Story" ads [see "TUOL" post 12/22/11].

A Sponsored Story ad is created when a user "likes" a product or service, which is then transmitted to that user's friends. The plaintiffs contend the Sponsored Story ads run afoul of California's right to publicity statute that guards against the unauthorized use of an individual's image, name or voice for a commercial purpose.

Neither side has confirmed the existence of a settlement or disclosed terms.
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