The past week has been a tough one for Facebook. The site was rendered inaccessible for over 150,000 users for over a week (which has since been fixed), and now the company has been hit with its third lawsuit. One a positive note, the company still appears to be adding users at a rapid pace, which means that more users were added in the past week than users who were not able to access the site.
A New Beacon Lawsuit
Just two weeks ago, Facebook settled a class action lawsuit against them regarding Facebook Beacon which resulted in a $9.5 million settlement fund. With a bunch of cash in the bank, it appears that lawsuits continue to come out of the woodwork. Tonight’s lawsuit is from a group of consumers who “allege that the Beacon program violated the 1988 Video Privacy Protection Act by sharing information about their [Blockbuster] movie rentals and purchases without first obtaining their written consent. “
As with all other suits, Facebook is stating that “This suit is without merit and we will fight it vigorously.” Given that the company is now cash flow positive, it’s not surprising that one lawsuit is showing up after the other. The group that’s now suing Facebook also recently “won a significant ruling against Blockbuster stemming from its participation in Beacon” according to MediaPost.
Two Patent Suits
Last week Facebook was also sued by Samurai Networks and Phoenix Media in separate patent-related suits. According to Bloomberg, “Mekiki Co., which runs the samuraitime.com network site, claims Facebook uses its ‘fundamental and patented social networking intellectual property,’ including ways to identify new ‘friends’ through existing contacts.”
The second suit, “alleges that Facebook’s ‘computer network and method of creating and sharing a personal page’ is covered by one or more claims of a patent issued by the US Patent and Trademark Office on June 26, 2001, to Tele-Publishing.” While it’s unknown if either of these are legitimate cases, it’s clear that Facebook is increasingly becoming a target of patent related suits.
WhoGlue Sues Facebook
A fourth suit was filed over three weeks ago, as reported by the Silicon Valley Business Journal. In this suit, WhoGlue Inc. claims that “Facebook violated a patent awarded to WhoGlue in 2007 for an ‘information management system’ to control personal information as human networks and technology increasingly mesh.”
The Suits Keep Coming
My guess is that we’ll see numerous companies jump on the lawsuit bandwagon over the coming months as they look to profit from Facebook’s success. With money in the bank, Facebook has the ability to pay up large settlements which is most likely the primary reason behind many of these suits. It will be interesting to see how all of these play out.