Facebook Sued Over Beacon

August 14th, 2008 at 12:00 am

facebook beacon

A class action suit was filed against Facebook and its cohorts for the botched third party advertising platform Beacon.  The cohorts defendants in the case include, Blockbuster, Fandango, Overstock, STA Travel, Zappos, Hotwire and GameFly.  The suit is being filed by a number US residents mostly from Texas.

Beacon is supposed to be an advertising tool for businesses to virally market their products and services in the Facebook network.  The service (Beacon)  was installed on a partner’s site which gathered user information regarding purchases, signing up for a service, adding an item to a wish list, and more.  When the user agrees, the update will go to the Facebook news feed.  Hence telling his friends that he did something with another vendor (instant marketing!).

Problem was, Beacon initially was a difficult service to opt out from.  This sparked a lot of controversy with regards to the information being collected by the vendors as well as Facebook.  The difficulty to opt out was the key factor that privacy advocates attacked.  So after a month of service Beacon became an opt-in service instead, giving users absolute control over their privacy.  Then the controversy died down.

Earlier this week however, the plaintiffs filed a class action lawsuit against Facebook and some of its partners for their involvement in the Beacon program during the time it was not yet an opt-in service.  These dates include November 7 – December 5 2007.  

The plaintiffs’ claim:

“The Beacon program sent information regarding specific user transactions on Facebook Beacon Activated Affiliates’ websites to Facebook regardless of whether the user was a Facebook member or not. Thus, no consent was sought, nor was any consent obtained from persons who utilize the Facebook Beacon Activated Affiiliate’s website who were not Facebook members…”

“It was deceptive because, in almost every instance, the information sharing was contrary to the stated privacy policies of the Facebook website and every other Facebook Beacon Activated Affiliate that had signed up for the program.”

However, although the suit was filed August 12, the defendants have yet to receive it.  "Until we’re served, we’re not being sued, so we don’t have any comment," Overstock general counsel Mark Griffin told CNET News.