Facebook Lawsuit Against Ads ‘Liked’ by Friends Can Proceed, Judge Rules

Facebook, the world’s most used social-networking service, can be sued by people who claim showing advertisements that their friends apparently like violates a California law regarding commercial endorsements.

U.S. District Judge Lucy Koh in San Jose rejected Facebook’s bid to dismiss the lawsuit on Dec. 16, ruling the plaintiffs may pursue claims that the company’s sponsored ads violate state law and are fraudulent. Koh granted Facebook’s request to dismiss a claim that it unjustly enriched itself with the sponsored ads. Facebook earns revenue primarily through the sale of targeted advertising that appears on members’ Facebook pages, including so-called sponsored stories, which the Palo Alto, California-based company started Jan. 25. A sponsored story is a paid ad consisting of another friend’s name and profile picture and claiming the person likes the advertiser. The plaintiffs claim it’s an unauthorized use of their names and likenesses and that they deserve compensation. The “plaintiffs have articulated a coherent theory of how they were economically injured by the misappropriation of their names, photographs and likeness,” Judge Koh wrote.