Facebook Ads: An Illegal Revolution?

As Facebook CEO Mark Zuckerberg unveiled his company’s much-anticipated ad platform last week, he made it very clear that Social Ads was a revolution. And no revolution comes without controversy, it seems.

Social Ads allows marketers to display advertising messages tagged to pictures of Facebook members who have expressed interest in the product. That proposition comes at a sensitive time for the Web advertising sector, which is under heavy scrutiny from privacy advocates and government regulators. In response, the Federal Trade Commission during hearings earlier this month raised the possibility of restricting advertisers’ access to online users’ behavioral information.

Now at least one legal expert is suggesting that Social Ads may truly be illegal.

William McGeveran, an associate law professor at the University of Minnesota Law School, said that the system could potentially violate laws requiring advertisers to obtain written consent from anyone featured in their ads.

For example, Facebook demonstrates Social Ads on its site with an example in which a user’s movie review is embedded into an ad for video rental company and retailer Blockbuster.

But McGeveran warns that even if the user understands she is sharing her ratings with friends, “does she understand that she’s also starring in a Blockbuster ad?” he wrote in a blog posting on the subject.

At issue is whether that practice violates a 1902 New York State statute and a similar statute in California, which both require content for using a person’s likeness in ads. Numerous other states have appropriation torts codifying similar standards for consent, McGeveran told InternetNews.com.

Company executives were not available for comment by press time. During the Social Ads launch last week, Facebook brass said the product does not violate any laws.

A spokesperson for the company reiterated that position, referring questions to a statement on Facebook’s site. That statement said, in part, “advertisers do not have access to any personally identifiable information about users.”

“This is an important issue and we want to make sure there is clarity,” she added in an e-mail to InternetNews.com.

Historically, the consent aspect of cases involving these statutes have been clear-cut, McGeveran said: It’s easy for a citizen to prove that they didn’t sign an agreement to appear in a street scene in a typical advertising photo shoot, for instance.

But things are less distinct in the Internet age. Facebook can argue that the agreement its users make to share information in the first place constitutes full consent.

“It’s a reasonable argument to say that the consent that they’ve got is not the consent that they need,” McGeveran said. “Consent is slippery in this space.”

“I do think there’s legal traction to the notion that the consent has to be context-specific,” he added. However, McGeveran also warned that the murkiness around online consent makes a legal outcome less clear.

“I don’t think it’s a slam-dunk either way,” he said.

Facebook users looking to get rich quick by suing the company for co-opting their image in ads might have another reason to think twice. In most states, a victim is required to demonstrate how they have been materially harmed by the non-consenting use of their image.

For non-celebrities, the legal fight for damages tends to get mired in the generally unsuccessful assertions of emotional distress or embarrassment. California stands as a lone exception, with a statutory award of $750 and attorneys’ fees to claimants who can prove the consent angle, McGeveran said.

Given the low stakes and legal uncertainties involved, it seems unlikely that Facebook users may mount a serious legal challenge to Social Ads. At the very least, however, the company may jeopardize users’ goodwill if they view Social Ads as unjustly co-opting their likeness. That could have further ramifications by encouraging potential advertisers to distance themselves from the technique.

Facebook has been stung at least once already by public outcry over a new feature. The company beat a hasty retreat following complaints stemming from its debut of News Feeds last year, which gave users instant updates on any changes made to friends’ profiles.

The feature overnight sparked thousands of e-mails protesting what users perceived as an invasion of privacy. The debacle ultimately compelled Zuckerberg to apologize publicly to Facebook’s users.

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