Fraley v. Facebook, Inc.

Issue: Whether § 230 immunizes Facebook's "Sponsored Stories" feature, which automatically converted users' "like" activity into paid commercial endorsement advertisements displayed to their friends without consent or compensation.

Facebook launched its "Sponsored Stories" feature on January 25, 2011, enabling it for all members by default. The feature worked by automatically converting a user's act of clicking Facebook's "Like" button on a brand page — or checking in at a business, posting about an app, or playing a social game — into a commercial advertisement. The Sponsored Story would appear on the user's friends' Facebook pages showing the user's name, profile photo, and a statement that the user "likes" the advertiser, paired with the advertiser's logo. Unlike ordinary stories in a user's news feed, Sponsored Stories were paid advertisements for which Facebook charged advertisers. The plaintiffs — including Angel Fraley, who clicked "Like" on Rosetta Stone merely to access a free software demo — alleged that they had no idea their "like" activity would be converted into a commercial endorsement, and that Facebook had violated California Civil Code § 3344, which prohibits the commercial use of a person's name or likeness without consent. Facebook moved to dismiss, invoking § 230. Judge Koh denied dismissal on the § 230 grounds. She held that Sponsored Stories were not merely third-party content that Facebook passively published — they were Facebook's own commercial product. Facebook originated the Sponsored Story by combining user identity data with advertiser content according to its own proprietary process, making Facebook an information content provider with respect to the advertisements themselves. Because Facebook was a content provider — not just a publisher — § 230(c)(1) did not immunize it.

An important early decision holding that § 230 does not protect a platform from claims arising from content the platform itself creates by combining user data with advertiser content. The case foreshadowed later disputes about whether algorithmic targeting and data-driven ad products constitute independent platform conduct outside § 230's scope, a line of reasoning developed further in Calise v. Meta.