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Just Because I Like You, Don’t Assume I Really Do

In the real world, when I say I like something, I usually mean that I like it. On Facebook, that’s not always the case.

I click Facebook’s “like” button for a lot of different reasons. I “like” pictures of peoples’ children and pets to show that I have seen them. I “like” articles I think my Facebook friends might want to read, whether or not I agree with the content. Sometimes I “like” movies I haven’t even seen yet, as I did for “Exporting Raymond,” simply because I want to follow the news on them. A variety of retailers offer coupons or other incentives to those who “like” them on Facebook; if I saw a particularly enticing deal, I might consider “liking” one of those companies, too.

This ambiguity surrounding liking and “liking” is at the heart of a controversy currently brewing over Facebook’s “sponsored stories.”

Sponsored stories are a type of paid advertising that merges two of Facebook’s primary purposes: keeping users up-to-date on their friends’ activities and giving advertisers access to carefully selected audiences. Each sponsored story consists of a traditional ad accompanied by a testimonial telling a user that certain of his or her Facebook friends like the company featured. If you had a Facebook friend named John Doe, for example, and he clicked the “like” button on the page for Levi’s jeans, you might see the message “John Doe likes Levi’s,” along with John Doe’s profile picture and an ad for Levi’s.

In many ways, sponsored stories are similar to non-sponsored stories such as “John Doe likes Jane Doe’s photo.” Both are generated through a click of the “like” button, and both can be broadcast to users’ friends without any additional action on the users’ part. The difference is that Levi’s pays Facebook to tell John Doe’s friends about his jeans preferences, while Jane Doe does not pay to make sure the world knows that her husband likes the picture she took of their adorable Labrador puppy wearing a New Year’s Eve party hat.

For some Facebook users, this is a very important difference. In California, users have launched a class action lawsuit claiming that sponsored stories violate California’s Right of Publicity Statute, which prohibits the unauthorized use of individuals’ names and likenesses for advertising purposes. A federal district judge recently ruled that the suit could proceed after Facebook attempted to have it dismissed.

Facebook made three main arguments in its bid to have the case thrown out. First, it claimed it was immune from legal challenge under the Communications Decency Act, because the content of the sponsored stories is generated by users, rather than directly by Facebook or its advertisers. Second, it claimed that it does not need users’ consent, because users are public figures to their friends and so their actions are newsworthy. Finally, Facebook said it had, in fact, received consent because sponsored stories are addressed in the policies new Facebook users must accept. On this last point, however, the plaintiffs countered that they signed up for Facebook before the introduction of sponsored stories and had never been asked to renew their consent based on the new policies. The court determined that the case could not be dismissed for the first two reasons and left the last one to be addressed at trial.

I see the real problem here as one of truth in advertising. Without a user’s express indication that he or she clicked the “like” button on a page in order to endorse a specific product, neither Facebook nor the page’s sponsor has any reason to believe that is necessarily the case. The California plaintiffs said they clicked “like” buttons for a variety of reasons, “such as to access a special offer code for a new product, to access photographs of an event, or to become eligible for a promotional prize.” They had no intention of becoming spokespeople for everything they “liked.”

After I read about the case, I scanned my list of Facebook “likes” to see how many of them I do, in fact, like. One of the items I came across was an essay in the New York Post titled “Why I love my strict Chinese mom” by Sophia Chua-Rubenfeld. Chua-Rubenfeld is the daughter of “tiger mother” Amy Chua, who shocked readers with her memoir “Battle Hymn of the Tiger Mother” and with an excerpt from that book that appeared in The Wall Street Journal under the headline “Why Chinese Mothers are Superior.” I did enjoy reading the essay, and I “liked” it because I thought others I know might enjoy it as well. But I seldom read the Post, and I would have felt wronged if my “like” of the article had generated a sponsored story that paired my name and picture with an advertisement for the newspaper.

As the owner of a business with a Facebook page, I would never claim that a “like” of my company’s page or anything on it constitutes an endorsement. In fact, I could not do this even if I wanted to, because the Securities and Exchange Commission specifically forbids registered investment advisers, including Palisades Hudson’s asset management affiliate, from using any sort of testimonial in advertising.

Around 35 people “like” Palisades Hudson on Facebook. I hope they like us in reality as well. But it is possible that some of them just want an easy way to follow the news we generate, such as our daily commentaries and our frequent comments to various media outlets. It is even possible that some of the people who “like” our page actively disagree with what we write, yet they follow it to challenge their own views, or ours. I simply can’t know.

Facebook does nothing wrong by selling ads or by trying to make money. It does nothing wrong by using its content, which happens to be information about users’ interests and preferences, to help advertisers better target their ads. But it does do something wrong when it lets advertisers turn users into unwilling and uncompensated pitchmen.

The California plaintiffs still have a long way to go to win their case. But no matter what happens with the legal challenge, this sort of policy is not going to help Facebook make any new friends.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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