Facebook lawyers gearing up for a showdown?

March 26, 2010

This article is a prediction based on the personal opinion of the author only.
Facebook has been at the center of a number of lawsuits and threatening letters from layers these last few weeks. A major lawsuit initiated by Facebook is inevitable, and it will set an important precedent for the IT industry.
Let's take a look at the flurry of legal matter that have involved Facebook recently. This week they settled a serious issue around their ill-fated “beacon” project that ended up being a privacy nightmare for the company. The class action suit cost them 9.6 million dollars; however they did not admit any misconduct1. Before that legal matter was settled, they were being sued once again. This time for alleged patent infringement by A New York company who is also suing Google over the same technology2.
But that is to be expected when you own a potential cash cow! But what is more interesting is the offensive action Facebook is taking. For example, two small 3rd party developers have received letters from Facebook layers instructing them to essentially shutdown their projects3 4. But it also threatened a march large fish: UK's the daily mail5.
Again, all of this is normal in a company of that size and visibility. But it does show that Facebook is getting more serious about protecting its intellectual property and brand. So all these lawsuits could be precursors to “the big one”.
There is a growing trend in law enforcement that is bound catch the attention of layers at Facebook very soon, if it hasn't already. Undercover agents are creating fake accounts at the social networking site, in a clear violation of the terms of service. All in order to track down suspects and gather evidence6. It is highly doubtful that the company approves of this practice.
The fallout from this lawsuit will set a number of precedents because it will challenge the legality of these “clickwrap agreements”. There have been disputes before, and the agreements have stood up in court7. However the defendants in this scenario give it the makings of an epic showdown.
Will Facebook emerge victorious, or will they be singing “I fought the law, and the law won”?


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