Prometheus bound: an historical content analysis of information regulation in Facebook.

• Author: Medzini, Rotem
• Position: A. The Dissemination of Information: The Court Disliking a Practice through Conclusions, with footnotes, p. 254-293

1. The dissemination of information: the court disliking a practice

   On December 16, 2011, Judge Lucy H. Koh from the District Court for the Northern District of California accepted most of Facebook's motions to dismiss the case, but a closer analysis is in order. (389) First, Facebook wanted to prove users consented to the service and that Facebook had not acted unfairly, unlawfully, or fraudulently. (390) To do so, Facebook presented the court with a group of six documents and screen shots. (391) Criticizing this practice and repeating the notion raised previously in Cohen v. Facebook, the court questioned whether a submitted webpage was "even in existence at the time Facebook first launched the Sponsored Stories Feature or at the time Plaintiffs took the actions that rendered them subject to Sponsored Stories." (392)

   Second, the court explained that though the plaintiffs presented only one Help Center page, it does not follow that Facebook users would necessarily see the other Help Center pages Facebook submitted to the court. (393) Put differently, the court referenced the problem of information overflow, saying it could not use the documents Facebook submitted. (394) In particular, the court emphasized implicitly Facebook's practice of information dissemination and violation of the manner in which information is presented to users. (395)

2. The advertisement of non-celebrities: the holy grail of advertising

   Looking at the question of injury, the court found that the plaintiffs not only alleged concrete and particularized commercial misappropriation, but also managed to articulate a coherent theory of how they were economically injured. (396) To be clear, users' content was misappropriated without their consent for paid commercial endorsement targeted not at themselves, but at other consumers. (397) To differentiate themselves from Cohen, (398) in Fraley the plaintiffs quoted Facebook's CEO and COO to prove that friends' endorsements have value in generating advertisement. (399) Based on this notion of advertising value raised by Facebook management, "the plaintiffs managed to allege concrete, measureable, and provable value in the economy at large" which distinguished them from the plaintiffs in Cohen and other previous cases. (400)

   Moreover, the court did not find it necessary to impose a higher standard between non-celebrities and celebrities, stating that in a media dominated society, even an obscure person's name and likeness can have economic value. (401) As a result, there is a new increasing interest by advertisers to exploit non-celebrity's likeness. (402) While the non-celebrity has little weight in the economy at large, the plaintiffs' allegations referenced the ability to conduct valuable targeted marketing through friends' endorsements to the same extent as celebrities. (403)

   Before moving on to the court's next order of business, it is important to look at another interesting social point raised by the court. Following this lack of distinction between celebrities and non-celebrities users' friends, Facebook claimed the Sponsored Stories should enjoy the newsworthiness exception. (404) According to Facebook, users' actions are newsworthy for two main reasons: Facebook claimed that not only expressions of consumers' opinions are generally newsworthy, but also based on the abovementioned non-celebrity understandings and the Cohen decision, users are considered "public figures" to their friends. (405) Through criticism directed at the plaintiffs, the court explained that the users "cannot have it both ways." (406) In different terms, users cannot assert being "celebrities" to their friends to benefit from suffering economic injury, while also denying they are public figures to these same friends for newsworthiness purposes. (407) Nonetheless, the court concluded there is no need to dismiss the case under the newsworthiness exemption, as the purpose of the publication was commercial and not for news purposes. (408)

   Though the claim of unfairness was not explicitly mentioned in Fraley, it seems that users felt uncomfortable with the use of their name for advertising purposes for the economic benefit of Facebook, but could not yet comprehend the idea of being public figures in their own social network. (409) The three class actions mentioned demonstrate that User-Generated Content has an interesting and important purpose in the economy of social media, but it is unclear yet to what extent. (410)

3. The making of a social-advertisement: the trade-offs of not giving control

   The third issue discussed in Fraley was whether the Communication Decency Act's provided immunity protected Facebook from liability. (411) Implementing the Fair-Housing rule, (412) the court decided that by utilizing users' content into advertisements, Facebook helped "develop" at least "in part" the information posted, thus making Facebook also an information content provider. (413) As "the party responsible for putting information online may be subject to liability, even if the information originated with a user," (414) the fact that the control over posting a Sponsored Story was maintained solely by Facebook, (415) Facebook enjoyed no immunity in this case. (416) Put differently, as Facebook gave users no control over the way in which their information is shared and utilized, leads to the conclusion that Facebook actions not only go beyond the traditional editorial functions, but also makes Facebook the actual content provider, a characteristic the company never claimed to have. (417)

   Furthermore, unlike previous claims, the "control" discourse was structured in a new construct. (418) While users previously looked for the opt-out option, Facebook took a different route altogether. (419) For starters, by claiming the 230 CDA immunity, Facebook discovered that the lack of control through privacy settings made Facebook a content provider, which does not enjoy the immunity of the 230 CDA. (420) Furthermore, the second claim made is also interesting as it goes along two basic notions: obscureness and unfairness. (421) Unless users actively decide otherwise by clicking "X," every post or like users make, is a possible Sponsored Story. (422) The result is unfair as it requires users to maneuver across the entire Facebook disseminated interface to control how Facebook uses their information. (423)

4. Additional subject matters: unfair competition and unjust enrichment

   To mention shortly, the fourth issue dealt with the allegation that Facebook violated California's Unfair Competition Law. (424) The court agreed that the plaintiffs alleged both sufficient standing based on the compensation loss, and that Facebook's commercial misappropriation can be characterized as a business practice. (425) According to the court, this business practice was not only unfair, but most of all can be perceived as fraudulent for many reasons. (426) First, while the privacy policy told a user she "can control exactly who can see [your posts] at the time you create them," in action, the user lacked the option to opt-out. (427) Second, the instructions of how to prevent a post from appearing as a Sponsored Story was buried in a help center page, unconnected by any link within the governing documents. (428) Third, users alleged that this false belief of control led them "to engage with Facebook in ways that rendered them unwitting commercial spokespersons without compensation," against their right of publicity. (429) Alternatively, the court found that if Facebook modified the governing documents at a later time to truthfully represent the inability to opt-out, these changes were fraudulent as Facebook knowingly and intentionally failed to seek users' consent. (430)

   Unlike previous cases claiming unfairness and obscureness, Facebook in this case acted deceivingly or fraudulently. (431) This deceit was not only on the level of how users were noticed, but more on the point of how Facebook deceived users to believe they have control. (432) Combined with the previous users' claim that they received no real control, users discovered that in practice the promise of control was not true, and as a result, made users unwilling Facebook spokespersons. (433)

5. Settling the complaint: a first attempt failure.

   In May 2012, a week before the hearing regarding the motion for class certification, the plaintiffs and Facebook reached a settlement. (434) The first settlement proposed contained three parts. (435) First, Facebook had to create a fund of $10 million dollars in the form of cy pres payments to be allocated between 10 non-profits organization dealing with privacy. (436) Second, the plaintiffs' attorneys would be able to seek court approval of $10 million in fees without Facebook opposition. (437) Third, the settlement foretold interface changes Facebook agreed to make that would allow user to have more information and control over their name and likeness in connection with Sponsored Stories. (438)

   Finding there are sufficient questions on issue, Judge Seeborg explained on August 10, 2012, that it would be inappropriate to approve the settlement. (439) The court found that it would be difficult to distribute the proposed $10 million dollars among the members of the class, especially since it was defined to be more than 70 million individuals across the U.S. (440) Also, the court found a problem with the plaintiffs' claim that the cy pres element is a "bonus" to their primary purpose of compelling Facebook to change its practices prospectively. (441)

   Furthermore, the court requested to understand more clearly Facebook will be required to do to change their behavior, and the amount of discretion Facebook will have in implementing features or revising their governing documents. (442) Second, according to the court, control over information has more economic value than the value that a third party derives from using the information. (443) Third, the court...