Fake Accounts Mean Litigation Could Be a Key Part of Facebook's Future
Instead of shutting fraudulent accounts down one-by-one, social media companies can actually attain some strategic advantages by deploying litigation against offenders.
March 06, 2019 at 02:16 PM
3 minute read
Don't call it a friend request. Earlier this week, Facebook filed a complaint in northern California district court against Chinese companies accused of selling fake Facebook and Instagram accounts.
Among other things, the complaint alleges trademark and service mark infringement, cybersquatting and breach of contract (Facebook's terms of services specifically prohibit fake accounts). The social media giant can and has manually shut down fraudulent presences without a legal assist—so why incur the potential expense associated with litigation?
Desiree Moore, a partner at K&L Gates and one of the leaders of the firm's digital crisis and planning response practice, pointed to long-term health of Facebook's business model.
“I think it's incredibly important for Facebook to do this sort of thing because otherwise there's a huge, huge risk of dilution, of widespread infringement, which really generates a digital crisis of epic proportions for a company like Facebook whose well-being depends on its brand digitally,” Moore said.
Fraudulent social media profiles aren't exactly a novelty. In a post published to the Facebook Newsroom last May, the company revealed that it had disabled about 583 million fake accounts during Q1 of 2018.
It's a big number, but even that might not make as much noise as a lawsuit. Sending a public statement that fraudulent behavior won't be ignored seems to be a less time-intensive proposition than locating and shutting down fake accounts one-by-one.
“A well-publicized lawsuit can emphasize integrity and have a significant general deterrent effect to other alleged infringers and complicit third parties: You are now on notice that we take these matters seriously and will use all necessary resources to prevent trafficking in fake accounts,” said Adam Weiss, a shareholder at Polsinelli.
Since there's no existing cause of action for “creation of a fake account,” breach of contract can provide a valuable alternative since it's straightforward and relatively easy to identify.
“The availability of a breach of contract claim is one of the reasons we stress to clients to have robust terms of service that can help protect the business,” said Andrew Lustigman, a partner at Olshan Frome Wolosky.
Beyond just simple protection, there are actually some strategic advantages to be gained from litigation as well. The discovery process can provide access to valuable information from third parties such as domain name registrars, internet service providers and credit card companies. According to Weiss, court orders can also provide remedies that social media companies can't attain by shutting down individual accounts.
“In this case, there are domain names involved, and a plaintiff has access to the Anticybersquatting Consumer Protection Act, which allows a litigant to act against infringing domain names as well,” Weiss said.
As for why Facebook might have chosen this particular hill to make its stand on, the answer might have to do as much with the jurisdiction involved as it does with the merits of the case. The fact that the parties allegedly responsible for the fake profiles are based out of China allows Facebook to issue a warning not only to manufacturers of fake accounts in general, but a notorious trouble spot as well.
“Because China has sort of ventured in this area for a long time of not adhering to intellectual property standards that other countries tend to adhere to, I think it's critical in this case that Facebook step in,” Moore said.
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