Fraley v. Facebook, Inc. Settlement and Privacy Law

By: Anny Mok

Many people may recall receiving an email earlier this year regarding a settlement in Fraley v. Facebook, Inc., a class action suit brought against Facebook. The plaintiffs claimed that the social networking site misappropriated users’ information by featuring them in “Sponsored Stories”. These stories appear on users’ Facebook page and consist of an advertiser’s logo combined with names of Facebook members who “likes” the advertised company.  Advertisers pay Facebook to be featured as “Sponsored Stories.”

Plaintiffs allege that Facebook used its own users’ information to generate revenue without consent and violated California’s Right of Publicity Statute, Civil Code § 3344; California’s Unfair Competition Law, Business and Professions Code § 17200, et seq. (“UCL”); and the common law doctrine of unjust enrichment.

California’s Right of Publicity Statute is based on the tort of “Appropriation of Name or Likeness”. The Restatement (Second) of Torts §652C states: “One who appropriates to his own use or benefit the name or likeness of another is subject to liability to the other for invasion of his privacy.” Under comment (c) of Restatement §652C, liability for appropriation requires that “the defendant must have appropriated to his own use or benefit the reputation, prestige, social or commercial standing, public interest or other values of the plaintiff’s name or likeness.”

This tort aims to protect people’s reputations and prevent exploitation of their identity. The interest protected is one’s dignity. It is based on the privacy law theory that an individual should have exclusive control of their identity and representations of their name or likeness. Control includes the right to grant others the privilege of publishing one’s name or picture for commercial reasons. In other words, someone should have to give permission before their name or picture is used in a way that benefits or endorses someone else’s business.

In many instances, the users probably did not intend to endorse the product. Perhaps they did not even want to disclose information that associated them with the product or service. The plaintiffs argued that when they clicked “like” on certain pages, they were unaware that Facebook would interpret those as endorsements of various brands or services. They claim that both Facebook and the advertisers were making huge profits from this advertising method while the members themselves were essentially “unpaid and unknowing spokespersons” for products. Additionally, the plaintiffs say that they could not have consented because the Terms of Use that they agreed to when they registered for a Facebook account was before the creation of “Sponsored Stories”.

Back in December, both parties reached a settlement of twenty million dollars. The $20 million will cover attorneys’ fees and will potentially be divided among Facebook users who appeared in the “Sponsored Stories” advertisements. The email was distributed to notify potential claimants of the settlement. More information about the settlement can be found at http://www.fraleyfacebooksettlement.com/.

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