A federal district court judge has tentatively approved a $10 Million settlement (to a privacy non-profit fund) of a class action brought by Facebook users complaining that associating their profile pictures with so called "sponsored "Stories" that were generated when they "liked" ads or sponsor pages violated their rights of publicity. The plaintiffs had successfully advanced their right of publicity case against Facebook beyond the pleadings stage after overcoming the social media giant’s motion to dismiss their lawsuit on various grounds late last year. Fraley et al. v. Facebook, Inc., 2011 U.S. Dist Lexis 145195 (Case No. 11-CV-01726-LHK, Opinion and Order December 16, 2011). For more information on that decision, click here. A critical question that the prior decision left to be addressed was whether the plaintiffs' acceptance of Facebook’s terms of use at the time they registered to use Facebook’s service amounted to consent sufficient to enable Facebook to lawfully use their names and likenesses in the Sponsored Story manner (an advertising tactic allegedly not employed by Facebook at the time the plaintiffs registered to use the site). The settlement now moots that issue.

The case, though over (a similar class action involving minors remains pending against FaceBook), raises important questions about what constitutes sufficient notice to, and consent from, users to give platform, site and application operators the ability to exploit user names and photos for their own and their advertisers’ promotional purposes. Further, advertisers participating in third party programs that involve user names and likeness need to look into the issue of whether that party has sufficient consent from the users and should seek indemnity from them. Finally, advertisers should be wary of user generated content programs that promote the company or its products or services since the user that submits content may not in fact be, or have consent from, the persons depicted in the content.

For more information on these issues, see Friel and Brody, “Right-of-Publicity Claims and Advertiser Sponsored User-Generated Content Campaigns – Limitations of CDA Immunity and the Risk of Claims," e-Commerce Law and Strategy (January 2012).