Facebook has a clever, new Ad system that could bring them a potentially massive amount of revenue. Leveraging on the trust friends have between each other, it is almost like the most powerful force in marketing - word-of-mouth. Basically, a user who carries out an action that has a relation to an advertiser’s product will have a sponsored advertisement placed in that user’s news feed or profile, which will be exposed to the entire person’s friends.
The problem lies in the fact that they are using the person’s photograph and name, which will appear along with the advertisement. Facebook has an option for the user to decide on whether he or she wants to “share their information” to others. The general question seems to be too vague for the over-zealous lawyers who are complaining about this system. They base upon the aggressive marketing pitch to the advertisers to further comment about Facebook’s possible abuse of the users’ information for the benefit of themselves and the advertisers.
Common-law privacy torts forbid someone from appropriating the name or likeness of another, and several states hold these laws. For example, New York forbids the use of someone’s name, portrait, picture or voice for advertising purposes without the prior written approval from the person. Facebook’s simple option does not seem to cover this well enough and it is unsure of how they will deal with it as of now. However, the favour now lies with the law, and Facebook is vulnerable.
Facebook did not reply directly to a request for comment, but they did reveal that they had received the question by stating that the users will “only see social ads to the extent their friends are sharing information with them” and that no personally identifiable information will be shared with the advertiser in creating a social ad.
The main issue right now is Facebook’s approach of getting consent from the user, which may not be sufficient to justify the use of their name of photo for advertising purposes. They may have to make it more explicit to avoid any problems with the law.