US privacy advocates are questioning Facebook's latest revenue spinner, Social Ads, for possibly breaching 19th century laws designed to protect celebrities from being exploited in print media.
Earlier this month, shortly after the social networking site announced its Social Ads initiative, University of Minnesota law professor William McGeveran argued in a blog post that the new program might violate a number of privacy laws.
Social Ads, which have already begun to appear on the site, are designed to boost Facebook's lukewarm revenues by targeting ads directly toward the members in question. They allow Facebook members to sign up as "fans" of an advertiser and then have their names and profile photos displayed alongside the marketer's ads on their friends' Facebook pages. However that potentially violates a New York privacy law that protects peoples' names and likenesses from being used without written permission, according to McGeveran.
"It's not just a New York law. Most states have statutes that protect this. Sometimes it's called a right of publicity, sometimes it's called commercial appropriation, sometimes it's a right to privacy," said Brian Murphy, a partner at Frankfurt Kurnit Klein & Selz, a New York-based media and entertainment law firm. "It's essentially that area of law that protects all of us, but in particular celebrities, from having their likenesses used without their permission."
The real problem facing Facebook, however, isn't that Social Ads are illegal. Social media, including Facebook, is an uncharted territory for the American legal system, and old laws are being applied to a new concept. The New York privacy law that McGeveran cited, indeed, has its roots "more than a hundred years ago by some bigwigs back in the late 1890s who were tired of having their private lives splashed across the equivalent of Page Six," said Murphy.
"Those statutes were clearly written with a print advertisement in mind," Murphy added. "(It was) long before television and radio, actually. How will courts look at them in a context that's very different, in particular in a social networking context?"
That's a good question. Even McGeveran considers the legality of Social Ads to be an open issue. "I'm being careful not to say that I know it would apply, and I do think it's a good strong possibility that it could apply," he said in an interview with ZDNet Australia's sister site CNET News.com.
Facebook has acknowledged that two organisations have written letters about its ad program to the Federal Trade Commission, which has guidelines concerning testimonials and endorsements in advertising, but the company has not elaborated on the contents of those letters or who sent them. "Facebook is participating fully in the FTC's discussions and explaining the consumer benefits of giving users more control over advertising," the company said in a statement. "Facebook is looking forward to discussing the consumer benefits of Facebook Ads."
Representatives from the FTC declined formal comment, but the two organisations in question--the Center for Digital Democracy and the U.S. Public Interest Research Groups-- have made public the letter that they sent to both the FTC as well as several states' attorneys general.
Advertising strategies like Facebook's Social Ads and MySpace's 'HyperTargeted' marketing, the letter said, has "[made] clear the advertising industry's intentions to move full-speed ahead without regard to ensuring consumers are protected," and called on the FTC to investigate in particular the effects of targeted advertising on minors.
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