The Issue With Sponsored Stories…

If you’re an average user, you’ve probably seen it in your timeline or in ads plenty of times- Facebook telling you that one of your friends really, really likes this product or that.  And your friends are seeing them same types of endorsement with you as the star.  But now Facebook is going to have a fight on its hands over these ‘Sponsored Stories’ thanks to the Fred Astaire Celebrity Image Protection Act.

According to California Civil Code 3344-3344.1, the law named after Hollywood’s famous song and dance man, “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.”

In other words, no one can use a California resident’s name and likeness in an advertisement or other promotional manner without their permission.  And that is exactly what some claim is being done with Sponsored Stories.  By adding those little personal endorsement tags to ads and timelines, an argument is being made that Facebook is running afoul of the California law aimed at keeping the rich and famous from having their images used in commercials without their approval (and hefty fee).

The Financial Times just reported on a class action case that is making its way through the California courts that seeks to litigate this matter:

“A federal judge in San Jose has rejected Facebook’s bid to dismiss a case that accuses the dominant social network of violating California’s “right of publicity” statute and state unfair trade practices law” with the judge citing that “the plaintiffs in this case made a logical claim that they should be entitled to the gain in ad revenue from any unwitting endorsements.”

AllThingsD noted:

“Facebook replied to the court that its users have consented to this kind of thing by agreeing to its Terms of Use. But Judge Lucy H. Koh agreed with the plaintiffs that Sponsored Stories didn’t exist when many of the users agreed to the Terms of Use, and Facebook didn’t ask them to review or renew when it added the opt-out feature.”

So should you get a piece of the action too for your ‘likes’?  Maybe, maybe not.

The key to this lawsuit will likely come down to the meaning of “prior consent” and if agreeing to Facebook’s terms of service covers and/or meets this requirement.  Does simply joining Facebook negate your right to control your image when it comes to advertising?  Or is it simply everyone’s responsibility to read the T&C’s of the social networks that they join?

The result of this lawsuit could have interesting implications for other platforms as well.  Could we see another one that looks at quotes and RT’s on Twitter?  If you declare your love for a production in 140 characters or less, and that company quotes or retweets you, are they using you in a promotional endorsement?

Whatever way this goes, it is clear that social media has not only made a radical impact on the way we interact, it is also challenging legal principles and concepts in ways that were not imagined just a few years ago.