• Bloomberg, Monday, December 19, 2011 11:53 AM

In other Facebook news, a district judge just ruled that the social network may be sued by uses who claim that showing ads, which friends apparently “like,” violates a California law regarding commercial endorsements. U.S. District Judge Lucy Koh in San Jose rejected Facebook’s bid to dismiss the lawsuit on Dec. 16, “ruling the plaintiffs may pursue claims that the company’s sponsored ads violate state law and are fraudulent,” Bloomberg reports.

However, “Koh granted Facebook’s request to dismiss a claim that it unjustly enriched itself with the sponsored ads. As Bloomberg notes, Facebook earns revenue primarily through the sale of targeted ads, which appears on members’ Facebook pages, including so-called sponsored stories. Launched at the beginning of the year, a sponsored story is a paid ad consisting of another friend’s name and profile picture, which claims that the person likes the advertiser.

“The plaintiffs claim it’s an unauthorized use of their names and likenesses and that they deserve compensation,” Bloomberg reports. The “plaintiffs have articulated a coherent theory of how they were economically injured by the misappropriation of their names, photographs and likeness,” Koh wrote.

Read the whole story at Bloomberg »