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Facebook Advertising Strategies and the Conflict With User’s Rights of Publicity

INTRODUCTION Currently, there is one name that stands as a beacon of success in the businesses world: Facebook. Facebook is a company that has become a global icon. On the verge of a highly anticipated initial public offering (IPO)[1], Facebook has become the standard of success for web based business dominance. One method Facebook has used to stay on top is by implementing new marketing and ad revenue strategies to stay competitive in an aggressive business environment.[2] Recently, some of the revenue strategies used have created legal issues pertaining to rights of publicity and how a Facebook user defines their rights. This essay will look at a case currently pending against Facebook where right of publicity is the central issue. It will first provide a short background about publicity rights and will also analyze the rules and cases against the facts presented in this case. While rights to publicity litigation is most common for celebrities, the application of publicity rights to all individual Facebook users is unprecedented. This essay will present an opinion that if Plaintiffs win such a suit against Facebook, therefore extending individual Facebook users a right to publicity, the consequences to Facebook’s business platform and marketing strategies will be serious.

BRIEF HISTORY OF FACEBOOK

Founded in 2004, Facebook’s mission is to make the world more open and connected.[3] People use Facebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters most to them. Its offices are located in Menlo Park, California and it has more than 3,000 employees.[4] It had 845 million monthly active users at the end of December 2011.[5] Approximately 80% of monthly active users are outside the U.S. and Canada.[6] It had 483 million daily active users on average in December 2011.[7] It had more than 425 million monthly active users who used Facebook mobile products in December 2011.[8] Facebook is available in more than 70 languages.[9] What do all of these statistics indicate? That Facebook is a valuable resource for user information. Its broad user base is a gold mine for advertisers looking to promote products and attract the business of consumers.
BACKGROUND OF CASE Recently, a group of Facebook users filed a complaint against Facebook for violating their rights to publicity, which, after various procedural rulings, is now pending in the Federal District Court for the Northern District of California.[10] This case is a class action lawsuit filed against Facebook for its advertising practice known as “sponsored stories”.[11] “Sponsored stories” is an advertising campaign adopted by Facebook in which it uses your interest in other entities as an endorsement of that business or product, and then announces it to others in hoping to get them to also take interest based on the fact that you did.[12] Plaintiffs allege that Facebook’s practice of misappropriating their names and likenesses for commercial endorsements without their consent (1) violated their statutory right of publicity under California Civil Code § 3344; (2) violated the Unfair Competition Laws; and (3) unjustly enriched Facebook.[13] Plaintiffs assert that the “sponsored stories” constitute “a new form of advertising which drafted millions of [Facebook members] as unpaid and unknowing spokespersons for various products,” for which they are entitled to compensation under California law.[14] The Plaintiffs argue that sponsored stories are created when a user “likes” the user page of a business or group.[15] This entails clicking on a “like” button on their page. The user may “like” the page for a variety of reasons, including accessing extra content or discounts. After they hit the “like” button, Facebook can then use