Facebook Wins Landmark Case

By Mirchin, David | Information Today, July-August 2012 | Go to article overview

Facebook Wins Landmark Case


Mirchin, David, Information Today


If you've ever thought about streamlining your social network sites into one platform, you're not alone. But tread softly. When Power Ventures tried it, it ended up in plenty of hot water.

The U.S. District Court for the Northern District of California recently ruled in favor of Facebook after a long-running battle with Power Ventures, Inc. It all started when Power Ventures set up a website integrating several social networking accounts into a single experience. The only problem was that Power Ventures stepped on Facebook's toes (and site) to do it.

A Few Facts

In 2008, Power Ventures started implementing its business plan, which piggybacked on Facebook's information and users. Power Ventures reportedly hoped that Facebook would look the other way or perhaps agree to a business deal. In a bid to lure Facebook users to this new service, Power Ventures began scraping information from the Facebook site and offered $100 rewards to Power Ventures (Power.com) users who invited and successfully signed up their Facebook friends.

Power Ventures provided Power .com users with a list of their Facebook friends and prompted them to send invitations to their friends to join Power.com. The invitations purportedly came from Facebook and used an @facebook.com address, not an @power.com address. After many failed attempts to build a "technological iron curtain" to stop Power .com (blocking addresses and blacklisting the term "power.com") and sending a cease-and-desist letter that was reportedly ignored, Facebook sued Power Ventures.

Legal Background

Facebook based its lawsuit on the grounds that Power Ventures had committed several violations involving 1) the federal CAN-SPAM Act, 2) Section 502 of the California Penal Code, and 3) the Computer Fraud and Abuse Act, the federal counterpart to California's Section 502.

Originally, Congress passed the CAN-SPAM Act as a way to curb unsolicited commercial email. The act confers standing to sue on "provider[s] of [an] Internet access service adversely affected" by commercial email containing false or misleading information in the message's header. After more than 60,000 spam messages, Facebook claimed that Power Ventures had "initiate[d]" the torrent, and therefore violated the CANSPAM Act. Power Ventures countered that the damage and cost borne by Facebook were negligible and that Facebook, not Power Ventures, was technically the initiator of the emails because these messages were authorized by Facebook users and were sent from Facebook's own servers. This was Power Ventures' key argument because if Facebook was deemed to be the party that initiated the emails, the header identifying Facebook as the sender would not have been "false or misleading" and would preclude liability.

Section 502 of the California Penal Code prohibits the access to data from a computer system or network, as well as taking, copying, or making use of any of that system or network's data "without permission," among other things. Despite being a criminal statute, it also grants the victim the right to sue for damages. Power Ventures denied accessing Facebook in an unauthorized manner, while Facebook claimed that Power Ventures' access was unauthorized when its activities on Facebook breached its Terms of Use (which prohibited automated data scraping) and when Power Ventures circumvented Facebook's code-based barriers that blocked Power Ventures' entry to the site.

[ILLUSTRATION OMITTED]

The Court's Ruling

Facebook tried to prove that the degree of spamming was enough to be "adversely affected," and the court agreed, noting that 60,000 spam emails were not a "negligible" assault. Facebook had to "expend significant resources to block [Power's] specific spamming activity," and the severity was compounded by the fact that its "spamming activity was ongoing, prolific, and did not stop after requests from the network owner. …

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