San Francisco — Of late, the social networking outfit has been embroiled in various legal tussle, first it was Yahoo suing for patent infringement, and now the social media giant is engaged in an illegal conspiracy to monopolize the market for display ads claims the maker of PageRage, a product that lets users personalize their Facebook page with custom images.
As the Facebook’s initial public offering is approaching, the pandora’s box reveals many bad tidings as the company stands to increase exponentially in wealth, one recalls a familiar maxim concerning the trials of tribulations of wealth: mo’ money, mo’ problems.
Facebook must really be feeling the sting of those words in 2012 but the legal tides aren’t ebbing just yet. Popular technology news site, paidContent discovered a story earlier today in which Sambreel Holdings and two subsidiary companies that offered advertisement-supported skins for Facebook profile pages filed Monday an antitrust lawsuit against the social media company in a U.S. federal court, its attorneys said.
The lawsuit alleges that Facebook quashed marketing competition by pressuring advertisers to quit using PageRage. In a lawsuit filed this week in San Diego federal court, PageRage says Facebook and third-party developers, that have their applications on Facebook, broke anti-trust law by pressuring advertisers to stop using PageRage. The suit also accuses Facebook of locking out users until they they removed PageRage from their web browsers.
However, Sambreel also alleges that although Facebook was initially encouraging of the browser extension, the social networking company’s sentiment began to change for the worse once the success of PageRage was becoming evident, to such an extent that PageRage was becoming a formidable supplier of ad impressions. The legal complaint states that rather than accept Sambreel as an advertising competitor, “Facebook pursued an anticompetitive scheme designed to eliminate Sambreel as a competitive threat.”
PageRage attained popularity after launching in 2008 but also enraged the social network because its designs included advertisements that papered over Facebook’s own ads.
Sambreel, based in Carlsbad, California, provides software that is utilized to deliver advertisements. Users of the free PageRage will see further ads placed by the company while browsing Facebook, it said on the PageRage website. These ads are not the responsibility of Facebook, it added.
More importantly, one notable portion that could have an effect on Facebook’s other legal fights concerning wiretapping laws cites Facebook’s practice of secretly scanning users browsers.
Without their knowledge or consent, Facebook scanned the browsers of consumers who logged on to Facebook to discern whether the consumers had downloaded PageRage. Facebook then required users who had downloaded PageRage to remove the entire Yontoo Platform from their computers (thereby disabling all Sambreel products, including not only PageRage but also products used on other websites) before they were allowed to login to Facebook. Consumers were required to certify that they had removed the Yontoo Platform before they could access Facebook.
By the way, Facebook has a history of working with outside developers who provide custom features for its users. PageRage says the social network itself said the product was “great” in 2009. PageRage says it has since lost most of its revenue and been forced to lay off 124 people.
“We believe this allegation is without merit and we will fight it vigorously,” said Facebook spokesman Andrew Noyes in an email.
Besides, the social media giant tags PageRage and other Sambreel products like Buzzdock and DropDownDeals among known adware programs on its help site.
Finally, the Kelly Law Firm in Tempe, Arizona, described PageRage as adware in a blog post in October. PageRage does not make actual changes to Facebook’s site itself when it changes the social networking site’s appearance on participating users’ computers, and merely tweaks the way that Facebook looks when using a particular browser, it said. “It appears unlikely, then, that Facebook would have any grounds for legal action against PageRage’s developers,” the law firm added.
Below is the copy of full legal complaint obtained by paidContent: