Facebook set for suit over publicity; Case hinges on 'sponsored stories' appearing on many pages

A federal judge in San Jose has rejected Facebook’s bid to dismiss a case that accuses the dominant social network of violating California’s “right of publicity” statute and state unfair trade practices law.

The ruling comes three weeks after Facebook settled a wide-ranging complaint by the US Federal Trade Commission and agreed to future monitoring for two decades. It suggests that privacy issues will continue to affect the tech powerhouse it as it prepares for its widely anticipated initial public offering.

The publicity case, which seeks to represent tens of millions of Facebook users, hinges on the “Sponsored Stories” that appear on many Facebook pages, telling users that specific friends “like” companies or products such as Intel, Land’s End and the Nissan Leaf.

The promotions were introduced in January of this year and have been a hit with advertisers, according to Facebook executives.