A new Facebook lawsuit brought by shareholder Gaye Jones on Monday claims the company withheld information from investors at the time of its initial public offering (IPO) in May 2012. Facebook is no stranger to lawsuits—from use of personal information, to unauthorized use of social media patents, the company has spent its share of time in the courts.
A new Facebook lawsuit brought Monday by shareholder Gaye Jones claims “reduced revenue and earnings forecasts for the company had not been publicly disclosed to investors,” at the time of its initial public offering (IPO) in May 2012.
Facebook’s shares were worth $38 each at the time of the IPO, but fell to $25 within a month. As of Monday, they were valued at $27.72.
The Palo Alto, Calif.-based company is no stranger to lawsuits—from use of personal information, to use of social media patents, the company has spent its share of time in the courts.
Facebook’s Top 4 Lawsuits:
Facebook Settlement for Sharing Personal Information
In a class-action lawsuit filed August 2008 against Facebook for sharing users’ personal information through its Beacon function, Facebook payed out a settlement of $9.5 million—but only $39,000 went to the users.
Beacon publicized actions made by users, such as that a user purchased something online from a certain company, thus providing advertising for those companies.
The lawyers who negotiated the settlement got about a combined $3 million. The $39,000 was divided among 23 users who agreed to have class counsel represent them, while the rest of the users got nothing.
The remainder went to a charity established by Facebook that would focus on educating social media users about their rights.
In a United States Court of Appeals for the Ninth Circuit document, Judge Ralph Hug scoffs at the settlement, which was nonetheless approved by the court.
“In this case, the process has failed,” Judge Hug wrote. “The attorneys for the class have obtained a judgment for millions of dollars in fees. The defendant, Facebook, has obtained a judgment that bars claims by millions of people victimized by its conduct. So have the other companies involved in Beacon. The victims, on the other hand, have obtained nothing. Under the settlement, Facebook even preserved the right to do the same thing to them again.”
A district judge had found it too difficult to define the function of Beacon in such a way that he could prevent the company from using similar features under a different name in the future.
Legal Limbo: Handling Facebook Profiles Postmortem
Handling Facebook pages, or digital assets, after a person dies has not yet created legal problems—but the law is so vague, it could in the future.
An article by Kristina Sherry published in the Pepperdine Law Review in December 2012, and recently featured by Forbes, titled “What Happens to Our Facebook Accounts When We Die?”, raises this issue.
Sherry wrote: “The definition of digital assets, which is already vague, is continuously broadening to incorporate once-tangible assets now undergoing complete digitization, as well as previously unforeseen cyber innovations.”
She said the handling of digital assets may become something a person decides before he or she dies, similar to organ donation.
Zuckerberg’s Settlement with Harvard Classmates
Perhaps the most famous settlement made by Facebook founder Mark Zuckerberg is the $65 million he paid out to his former Harvard classmates, the twins Cameron and Tyler Winklevoss, who claimed he stole their ideas to form Facebook.
In 2011, the Winklevosses attempted to void the settlement, which they felt should be raised to at least $100 million following some large investments in the company and a substantial increase in its worth.
Chief Judge Alex Kozinski wrote in a United States Court of Appeals for the Ninth Circuit document: “The Winklevosses are not the first parties bested by a competitor who then seek to gain through litigation what they were unable to achieve in the marketplace. And the courts might have obliged, had the Winklevosses not settled their dispute and signed a release of all claims against Facebook.”
Deceased Dutch Programmer’s Family Sues Over ‘Like’ Button Patent
On Feb. 5, the family of deceased Dutch programmer Joannes Jozef “Jos” Everardus van der Meer filed a lawsuit against Facebook, saying it stole Everadus’s patented “like” and “share” social media functions.
“Years before Facebook and AddThis, Jos van der Meer conceived of and patented core aspects of social media,” said Dr. Paul Schneck, the head of Rembrandt Social Media LP, which holds the patent.