Facebook faces legal threat over unsolicited advertising in Scandinavia

Facebook might violate European regulation with unsolicited advertising in news feeds, an Ombudsman said

Facebook could be taken to court by consumer organizations in the Nordic countries if it does not stop placing unsolicited advertisements in users' news feeds.

The social network is likely to break the European Directive on Privacy and Electronic Communications by letting companies advertise directly in users' news feeds, said Norwegian Consumer Ombudsman Gry Nergard on Friday.

According to the directive, electronic mail for the purposes of direct marketing may only be sent to subscribers in Europe who have given their prior consent. The Ombudsmen of Norway, Sweden and Denmark believe that when Facebook places advertisements directly in the news feed of a user, the ads can be considered unsolicited messages.

In May, they wrote to the then European Commissioner for Health and Consumer Policy, John Dalli, to raise the issue. Dalli has since resigned, and Nergard now expects the Commission to reply early next year.

In their letter, the ombudsmen also expressed their concern about Facebook's "Sponsored Stories" advertising program, said Nergard.

Sponsored stories are advertisements for a product that often will be displayed to a Facebook user's friends after he interacts with a certain product or brand. A users might for example click "like" on a product page or check in at a local café or shop. These likes or check-ins tend to go by fairly unnoticed in people's timelines, so Facebook offers the businesses the option to "sponsor" the story. When a business sponsors check-ins for instance, the check-in will be highlighted in the news feeds of the users' friends, attracting more attention.

The problem with this is that users did not give their consent to receive such an ad, according to Nergard. "It should be on an opt-in basis and sponsored stories aren't opt-in," she said. In the letter sent earlier this year, the organizations said that Facebook might not violate the directive because it is "technically designed in such a way that communications are probably not sent to users, which is a condition for considering communications to fall within the definition of electronic mail, but are retrieved by, shown or otherwise presented to the social media user."

But since then, Facebook changed its practice, said Nergard. In Nordic countries advertisements are now shown in people's timelines without friends liking the product or business, she said. "That looks even more like electronic mail," than the Sponsored Stories, she said. "We found that it could be illegal," she said, adding that because of that the consumer organizations might not have to consult with the Commission before they act.

To address the issue at hand, Nergard met with Facebook last week, she said. Next, the social network will receive a letter asking it to change its behavior.

If, as Nergard expects, Facebook declines to change, the ombudsmen have a few options. "We want to talk first," said Nergard, but if that is not possible then the ombudsmen hope that the European Commission will take a close look at Facebook's practices.

"Another solution would be to take them to court," Nergard said, adding that this would be a last resort. She first wans to explore all other options before taking such a drastic measure.

A Facebook spokeswoman declined to comment on the matter, saying only that "Facebook engages in an ongoing dialogue with stakeholders all over Europe about our product and services."

Nergard said she hoped that there would be a discussion in the Commission about the legality of this kind of advertising on social media.

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