Judge Dismisses Defamation Lawsuit Brought Against Boing Boing By Co. Targeting Ads Based On Phone Numbers

In a victory for Web publisher Boing Boing, a judge in California has dismissed a defamation lawsuit brought by Magic Jack, a company that offers a USB dongle for Voice over Internet Protocol service.

Marin County Superior Court Judge Verna Adams ruled that Magic Jack's complaint -- about a Boing Boing item that accused Magic Jack of being a "snoop" because it planned to serve ads based on phone numbers users called -- was barred by California's broad anti-SLAPP (strategic lawsuits against public participation) statute. That law provides for a quick dismissal of lawsuits that are aimed at squelching debate about matters of public interest.

Adams also ordered Magic Jack to pay Boing Boing more than $50,000 in attorneys' fees and court costs, the Web publisher announced today.

The dispute began in April of 2008, when a writer at Boing Boing took a close look at the license agreement for Magic Jack, which was offering a VoIP dongle for just $20 a year. The writer found that Magic Jack's business plan included targeting ads to users based on the phone numbers they called. The company will "snoop on your calls to target ads more accurately," Boing Boing published in an April 2008 post.



Unhappy about being characterized as a snoop, Magic Jack filed a defamation lawsuit against Boing Boing. The company alleged that any statements about spying were false, arguing that it had not yet begun analyzing the phone numbers dialed by customers.

In subsequent legal papers, Magic Jack also argued that the post wrongly suggested that it "regularly eavesdrops on its users' calls." Magic Jack also attempted to argue that recording phone numbers doesn't in itself violate consumers' privacy. "Every telephone company from time memorial has done this to charge customers for their calls. Ad-targeting is also a common practice that is useful for both sellers and consumers. A trier of fact would likely find that there is nothing nefarious about such a policy," the company argued.

But Adams agreed with Boing Boing that its original post was protected under California law. She also specifically rejected Magic Jack's assertion that the post falsely accused the company of listening in on phone calls. "As to the statements based on the EULA, such statements, read in context, do not imply that [Magic Jack] is eavesdropping on its customers' calls," Adams wrote. "Instead, the statements clearly constitute the opinion of the author that analyzing phone numbers for purposes of targeted advertising amounts to 'spy[ing],' 'snoop[ing],' and 'systematic privacy invasion.'"

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