Thursday, March 1, 2012

Facebook v. Power Ventures: A Dangerous Precedent?

A recent Facebook summary judgment victory may spell doom for social network add-on services and any third party Internet marketer wishing to use Facebook's closed communications system to conduct commercial activities. Power Ventures created a browser add-on that allowed its users to monitor all social networking activities in one spot. Power tried to build its user base through Facebook invitations. Power attempted to gain users by offering a $100 reward for users who got Facebook friends to sign up via a Facebook event invitation.

Facebook alleged that Power's activities violated its terms of use by accessing its site without permission in violation of the CAN-SPAM Act, California Penal Code Section 502 and the Computer Fraud and Abuse Act ("CFAA").

The Court agreed with Facebook finding that: Power accessed Facebook without permission; that the event invitations were misleading because they had a Facebook email address in the header rather than a Power email address; and that Facebook suffered specific damage in combating Power's activities.

The decision should scare any Internet marketer conducting commercial activities on Facebook, especially the use of event invitations or any messaging on Facebook's closed network. Under this case, virtually all such commercial messaging activity on Facebook violates CAN-SPAM. That is because all event invitations automatically contain a Facebook email address. Also, third party add-on services accessing and scraping Facebook's site may be liable for criminal and civil penalties under CFAA and California Penal Code Section 502.

This decision is controversial and may be vulnerable on appeal. CAN-SPAM and the CFAA were created without contemplating the new marketing strategies and technologies born out of social networks like Facebook. Internet marketers must contact an experienced CAN-SPAM attorney prior to engaging in any marketing activities on Facebook or other social networks. Failure to do so may lead to a large monetary judgment and criminal penalties.