Facebook's contract with pay-per-click marketers does not completely protect the social networking service from liability for problematic clicks by outside companies, despite a disclaimer stating that Facebook has no responsibility for click fraud, a federal judge has ruled.
But the judge also ruled that Facebook's disclaimer successfully precludes liability for clicks made by outside companies that are seeking to drive up their competitors' ad costs.
The mixed decision, issued this week by U.S. District Court Judge Jeremy Fogel in San Jose, Calif., draws a line between clicks that were "fraudulent" in the sense that the clicker had dubious intentions, and clicks that were improper for other reasons, such as when technical problems prevented users from reaching a landing page.
Fogel ruled that Facebook's disclaimer protects the company only from clicks made by third parties with an intent to defraud, and not clicks that don't go through for more benign reasons.
The ruling left both sides claiming they had scored points in the litigation, which cleared the way for the marketers to obtain evidence from Facebook through the pre-trial discovery process.
"Plaintiffs view it as a significant victory because the judge rejected Facebook's argument that a click fraud disclaimer immunized it against liability for any type of improper third party click," said Jonathan Shub, who represents the marketers. "We believe that the evidence will show that Facebook has immature systems resulting in improper billing of a wide range of clicks for which advertisers should not have been charged."
For its part, Facebook said it was "pleased a number of claims have been dismissed for good." The company added: "We believe the remaining, much narrower, claims are also without merit and will fight them vigorously."
The case dates to last summer, when sports site RootZoo and several other online marketers sued the social networking service, alleging discrepancies between their internal data and the number of clicks they were charged for by Facebook. RootZoo's original complaint alleged that its analytics showed that 300 clicks were generated by Facebook on June 2, 2008, but that Facebook charged the company for 804 clicks.
Facebook asserted that its contract with marketers precluded liability for click fraud because it included the following language: "Facebook shall have no responsibility or liability to me in connection with any third-party click fraud or other improper actions that may occur."
But RootZoo and the other marketers successfully argued that "improper actions" means only clicks made with a harmful intent, and not clicks that are "non-fraudulent but otherwise invalid." Such an invalid click could occur when the same user inadvertently clicks on an ad twice in rapid succession, or clicks on an ad but doesn't actually reach the marketer's site.
Fogel's ruling this week revisited an earlier decision dismissing claims against Facebook stemming from improper clicks by third-party companies. After that decision, the marketers filed amended papers spelling out why they sought to hold Facebook liable for invalid third-party clicks.
Monday, August 30, 2010
Thursday, August 26, 2010
Specific Media Sued Over Flash Cookie Use
Online ad network Specific Media has been hit with a lawsuit for allegedly violating Web users' privacy by using Flash cookies for tracking purposes.
In a complaint filed in U.S. District Court in the Central District of California, six Web users allege that Specific Media failed to provide adequate notice about its online data collection techniques, including Flash cookies. The lawsuit also alleges that Specific Media used Flash cookies -- which are stored in a separate location from HTML cookies -- to recreate HTML cookies that users had deleted so it could "obtain personal identifying information, monitor users, and to sell users' data."
The company's "privacy documents require college-level reading skills for comprehension and include substantial legalese, ambiguous and obfuscated language designed to confuse, disenfranchise, and mislead the users," the lawsuit asserts.
In addition, the use of Flash cookies to recreate deleted HTML cookies "unfairly wrests control from users," the lawsuit alleges.
Specific Media has not yet responded to Online Media Daily's request for comment.
Flash cookies were originally designed to remember users' preferences for Flash-based applications like online video players, but some companies also use such cookies to store the same type of information that is normally found on HTTP cookies. With this type of data, Flash cookies can be used to reconstruct HTTP cookies, even when consumers have deliberately deleted their HTTP cookies to avoid tracking. Because Flash cookies are stored in a different place from HTTP cookies, users who delete the latter don't also shed the former. People can trash Flash cookies via Adobe's online controls, but many users don't appear to be aware of the cookies.
The complaint refers extensively to a report about Flash cookies published last year by researchers at the University of California, Berkeley and other schools. That paper outlined how Flash can be used to circumvent consumers' settings.
After the report was published, some Federal Trade Commission officials said they were concerned about the use of Flash for tracking purposes.
The Web users argue that Specific Media's alleged tracking techniques violate federal and state wiretap laws. They are seeking a class-action lawsuit.
This lawsuit marks the third time this summer that companies have been sued over Flash cookies. Defendants named in the prior two lawsuits include Quantcast, Clearspring, Walt Disney and NBC Universal.
All of the Flash-cookie suits were filed by lawyers David Parisi and Joseph Malley, both of whom are among the attorneys suing defunct behavioral targeting company NebuAd for allegedly violating users' privacy.
In a complaint filed in U.S. District Court in the Central District of California, six Web users allege that Specific Media failed to provide adequate notice about its online data collection techniques, including Flash cookies. The lawsuit also alleges that Specific Media used Flash cookies -- which are stored in a separate location from HTML cookies -- to recreate HTML cookies that users had deleted so it could "obtain personal identifying information, monitor users, and to sell users' data."
The company's "privacy documents require college-level reading skills for comprehension and include substantial legalese, ambiguous and obfuscated language designed to confuse, disenfranchise, and mislead the users," the lawsuit asserts.
In addition, the use of Flash cookies to recreate deleted HTML cookies "unfairly wrests control from users," the lawsuit alleges.
Specific Media has not yet responded to Online Media Daily's request for comment.
Flash cookies were originally designed to remember users' preferences for Flash-based applications like online video players, but some companies also use such cookies to store the same type of information that is normally found on HTTP cookies. With this type of data, Flash cookies can be used to reconstruct HTTP cookies, even when consumers have deliberately deleted their HTTP cookies to avoid tracking. Because Flash cookies are stored in a different place from HTTP cookies, users who delete the latter don't also shed the former. People can trash Flash cookies via Adobe's online controls, but many users don't appear to be aware of the cookies.
The complaint refers extensively to a report about Flash cookies published last year by researchers at the University of California, Berkeley and other schools. That paper outlined how Flash can be used to circumvent consumers' settings.
After the report was published, some Federal Trade Commission officials said they were concerned about the use of Flash for tracking purposes.
The Web users argue that Specific Media's alleged tracking techniques violate federal and state wiretap laws. They are seeking a class-action lawsuit.
This lawsuit marks the third time this summer that companies have been sued over Flash cookies. Defendants named in the prior two lawsuits include Quantcast, Clearspring, Walt Disney and NBC Universal.
All of the Flash-cookie suits were filed by lawyers David Parisi and Joseph Malley, both of whom are among the attorneys suing defunct behavioral targeting company NebuAd for allegedly violating users' privacy.
Friday, August 6, 2010
Legislators Question Web Companies' Privacy Practices
Two senior lawmakers are questioning AOL, Yahoo, MSN and other Web companies about their practice of allowing third-party ad companies to install cookies and other tracking mechanisms on visitors' computers.
In letters to the companies, Reps. Ed Markey (D-Mass.) and Joe Barton (R-Texas) said they were troubled by the notion "that the price of consumers' daily use of the Internet increasingly is surrender of their personal information." The legislators' move comes in response to a recent Wall Street Journal report that the top 50 U.S. Web sites installed an average of 64 pieces of tracking technology -- like cookies or beacons -- onto users' computers.
Web companies often say that such tracking is anonymous, but privacy advocates worry that individuals can be identified if the information that's gathered is sufficiently detailed. Markey and Barton said in their letter that the online data collection now underway "permits web-based enterprises to develop digital dossiers on consumers for a range of purposes, including highly targeted marketing."
They asked the Web sites a host of questions, including how information about users is collected, whether such information is monetized, and if so, how much revenue was associated with that information in the last 12 months.
The letter also asked the sites to provide the names of all ad and analytics companies that have access to visitors' data. The lawmakers also questioned the Web sites about their privacy policies, asking whether consumers are notified about the array of companies that collect data.
The 15 sites to receive letters were Dictionary.com, MSN.com, Comcast.net, AOL.com, Merriam-Webster.com, Photobucket.com, Answers.com; Careerbuilder.com; MSNBC.com, Live.com, Myspace.com, Yahoo.com, Verizonwireless.com, Yp.com, and About.com.
A Verizon Wireless spokesperson said the company was reviewing the request and would get back to Congress.
A Microsoft spokesperson said in a statement that the company "takes seriously our responsibility to protect people's privacy when they are using Microsoft's products and services." The spokesperson added: "We look forward to reviewing the letter and continuing to work with Representatives Markey and Barton on this important issue."
A third company said it had not yet received the letter.
Separately, a coalition of privacy advocates including the Center for Digital Democracy and U.S. Public Interest Research Group asked lawmakers to investigate a report in The Wall Street Journal stating that Microsoft lessened privacy protections in the latest version of its browser in response to concerns raised by the ad industry. The original plan reportedly was to have a setting that automatically rejected tracking technology. Instead, while the browser allows consumers to reject tracking technology, people must activate that setting anew each time they launch the software.
"Microsoft's self-serving action is emblematic of the ad industry's failure to enact meaningful self-regulation," the advocates state in letters sent to Reps. Barton and Waxman (D-Calif.) as well as Sens. Jay Rockefeller (D-W.Va.) and Kay Bailey Hutchison (R-Texas).
Lawmakers currently are mulling two proposals for privacy legislation -- a bill introduced last month by Rep. Bobby Rush (D-Ill.) and a draft proposal floated earlier this year by Rep. Rick Boucher (D-Va.).
By Wendy Davis
In letters to the companies, Reps. Ed Markey (D-Mass.) and Joe Barton (R-Texas) said they were troubled by the notion "that the price of consumers' daily use of the Internet increasingly is surrender of their personal information." The legislators' move comes in response to a recent Wall Street Journal report that the top 50 U.S. Web sites installed an average of 64 pieces of tracking technology -- like cookies or beacons -- onto users' computers.
Web companies often say that such tracking is anonymous, but privacy advocates worry that individuals can be identified if the information that's gathered is sufficiently detailed. Markey and Barton said in their letter that the online data collection now underway "permits web-based enterprises to develop digital dossiers on consumers for a range of purposes, including highly targeted marketing."
They asked the Web sites a host of questions, including how information about users is collected, whether such information is monetized, and if so, how much revenue was associated with that information in the last 12 months.
The letter also asked the sites to provide the names of all ad and analytics companies that have access to visitors' data. The lawmakers also questioned the Web sites about their privacy policies, asking whether consumers are notified about the array of companies that collect data.
The 15 sites to receive letters were Dictionary.com, MSN.com, Comcast.net, AOL.com, Merriam-Webster.com, Photobucket.com, Answers.com; Careerbuilder.com; MSNBC.com, Live.com, Myspace.com, Yahoo.com, Verizonwireless.com, Yp.com, and About.com.
A Verizon Wireless spokesperson said the company was reviewing the request and would get back to Congress.
A Microsoft spokesperson said in a statement that the company "takes seriously our responsibility to protect people's privacy when they are using Microsoft's products and services." The spokesperson added: "We look forward to reviewing the letter and continuing to work with Representatives Markey and Barton on this important issue."
A third company said it had not yet received the letter.
Separately, a coalition of privacy advocates including the Center for Digital Democracy and U.S. Public Interest Research Group asked lawmakers to investigate a report in The Wall Street Journal stating that Microsoft lessened privacy protections in the latest version of its browser in response to concerns raised by the ad industry. The original plan reportedly was to have a setting that automatically rejected tracking technology. Instead, while the browser allows consumers to reject tracking technology, people must activate that setting anew each time they launch the software.
"Microsoft's self-serving action is emblematic of the ad industry's failure to enact meaningful self-regulation," the advocates state in letters sent to Reps. Barton and Waxman (D-Calif.) as well as Sens. Jay Rockefeller (D-W.Va.) and Kay Bailey Hutchison (R-Texas).
Lawmakers currently are mulling two proposals for privacy legislation -- a bill introduced last month by Rep. Bobby Rush (D-Ill.) and a draft proposal floated earlier this year by Rep. Rick Boucher (D-Va.).
By Wendy Davis
Wednesday, August 4, 2010
Intel to change practices in FTC settlement
By Jia Lynn Yang
The Federal Trade Commission is banning tech giant Intel from a slew of practices deemed unfair and deceptive as part of an antitrust settlement over charges the firm exploited its dominance in the chip market to elbow out competitors.
The FTC doesn't have the authority to fine the company — unless it violates the terms of the settlement — but the agency outlined a deal on Wednesday checking Intel's business practices. Officials said the deal would immediately benefit consumers purchasing computers by increasing competition in the chip-making business.
“This is an exceptionally important case,” said FTC Chairman Jon Leibowitz. “And the commission was deeply troubled by Intel's actions.”
The agency investigated Intel's practices going back at least 10 years and found the company “stepped well over the line.” The FTC said Intel told customers it would not sell products to them unless they agreed to stop doing business with Intel's rivals. The agency also says that Intel redesigned its central processing units, or CPUs, to throw off competitors by making it harder for their chips to work with Intel's.
Intel said in a statement Wednesday that the company does not admit to breaking the law as part of the settlement and that the agency's allegations are all false.
“This agreement provides a framework that will allow us to continue to compete and to provide our customer the best possible products at the best prices,” said Doug Melamed, Intel senior vice president and general counsel. “The settlement enables us to put an end to the expense and distraction of the FTC litigation.”
Intel has faced antitrust charges before from rival chipmaker Advanced Micro Devices. Last November the two firms agreed to a $1.25 billion settlement. The European Union has also accused Intel of anticompetitive behavior. In May 2009, the EU fined Intel $1.45 billion and told the company to stop offering customer rebates that the EU thought were coercive.
The Federal Trade Commission is banning tech giant Intel from a slew of practices deemed unfair and deceptive as part of an antitrust settlement over charges the firm exploited its dominance in the chip market to elbow out competitors.
The FTC doesn't have the authority to fine the company — unless it violates the terms of the settlement — but the agency outlined a deal on Wednesday checking Intel's business practices. Officials said the deal would immediately benefit consumers purchasing computers by increasing competition in the chip-making business.
“This is an exceptionally important case,” said FTC Chairman Jon Leibowitz. “And the commission was deeply troubled by Intel's actions.”
The agency investigated Intel's practices going back at least 10 years and found the company “stepped well over the line.” The FTC said Intel told customers it would not sell products to them unless they agreed to stop doing business with Intel's rivals. The agency also says that Intel redesigned its central processing units, or CPUs, to throw off competitors by making it harder for their chips to work with Intel's.
Intel said in a statement Wednesday that the company does not admit to breaking the law as part of the settlement and that the agency's allegations are all false.
“This agreement provides a framework that will allow us to continue to compete and to provide our customer the best possible products at the best prices,” said Doug Melamed, Intel senior vice president and general counsel. “The settlement enables us to put an end to the expense and distraction of the FTC litigation.”
Intel has faced antitrust charges before from rival chipmaker Advanced Micro Devices. Last November the two firms agreed to a $1.25 billion settlement. The European Union has also accused Intel of anticompetitive behavior. In May 2009, the EU fined Intel $1.45 billion and told the company to stop offering customer rebates that the EU thought were coercive.
Monday, August 2, 2010
Judge Rules Site Alleging Copyright Infringement Did Not Send Takedown Notices To Google Properly
A federal judge in Los Angeles has handed Google a significant victory in a copyright infringement lawsuit brought by adult entertainment company Perfect 10.
In a ruling issued earlier this week, U.S. District Court Judge A. Howard Matz largely cleared Google for allegedly displaying links in search results to sites that infringe Perfect 10's copyright. Matz found that in many cases, Perfect 10 had not provided the search company with detailed enough information to be able to easily remove the pirated material.
In general, the Digital Millennium Copyright Act protects search engines from liability for returning copyright images in their results, provided the search engines remove pirated material upon request. Matz said in his ruling that Perfect 10 made at least 83 such takedown requests to Google since 2001, but that most of them were deficient.
Matz elaborated that some of the takedown notices were sent to the wrong address -- webmaster@google.com -- instead of the address that Google had designated. Other takedown notices referred to "dozens or even hundreds of alleged infringing links," but many of those didn't contain enough details about the URLs for Google to be able to determine what material to remove.
Matz said that in other instances, Perfect 10 merely provided Google with a package of a cover letter, spreadsheet and DVDs with electronic files -- and then expected Google to "comb through hundreds of nested electronic folders containing over 70,000 distinct files, including raw image files such as JPEG files and screen shots of Google search results, in order to find which link was allegedly infringing."
While Matz didn't dismiss all of Perfect 10's claims, the ruling seems to put a big dent in the company's case, which has been pending since 2004.
Santa Clara University law professor Eric Goldman says on his blog that the ruling shows that content owners "should not get creative or lazy" with their takedown requests. "Over and over again, we've seen that the big service providers will respond quickly to properly drafted takedown notices; and we've seen judges become increasingly less tolerant of plaintiffs who couldn't bother to follow the statutory roadmap," he writes.
The ruling marks at least the second major recent defeat for Perfect 10. In May, a different federal judge denied Perfect 10's request for an injunction shutting down RapidShare for allegedly contributing to copyright infringement.
In a ruling issued earlier this week, U.S. District Court Judge A. Howard Matz largely cleared Google for allegedly displaying links in search results to sites that infringe Perfect 10's copyright. Matz found that in many cases, Perfect 10 had not provided the search company with detailed enough information to be able to easily remove the pirated material.
In general, the Digital Millennium Copyright Act protects search engines from liability for returning copyright images in their results, provided the search engines remove pirated material upon request. Matz said in his ruling that Perfect 10 made at least 83 such takedown requests to Google since 2001, but that most of them were deficient.
Matz elaborated that some of the takedown notices were sent to the wrong address -- webmaster@google.com -- instead of the address that Google had designated. Other takedown notices referred to "dozens or even hundreds of alleged infringing links," but many of those didn't contain enough details about the URLs for Google to be able to determine what material to remove.
Matz said that in other instances, Perfect 10 merely provided Google with a package of a cover letter, spreadsheet and DVDs with electronic files -- and then expected Google to "comb through hundreds of nested electronic folders containing over 70,000 distinct files, including raw image files such as JPEG files and screen shots of Google search results, in order to find which link was allegedly infringing."
While Matz didn't dismiss all of Perfect 10's claims, the ruling seems to put a big dent in the company's case, which has been pending since 2004.
Santa Clara University law professor Eric Goldman says on his blog that the ruling shows that content owners "should not get creative or lazy" with their takedown requests. "Over and over again, we've seen that the big service providers will respond quickly to properly drafted takedown notices; and we've seen judges become increasingly less tolerant of plaintiffs who couldn't bother to follow the statutory roadmap," he writes.
The ruling marks at least the second major recent defeat for Perfect 10. In May, a different federal judge denied Perfect 10's request for an injunction shutting down RapidShare for allegedly contributing to copyright infringement.
Subscribe to:
Posts (Atom)