Martin Lewis v Mark Zuckerberg

Martin Lewis, the financial expert who founded moneysavingexpert.com, has decided to sue Facebook because of a significant number of adverts, using Lewis´ name and image without his permission, promoting binary trading platforms appearing on the Facebook platform. There is little doubt that the adverts are against advertising regulations. The Advertising Standards Authority (ASA) has already ruled as much and censured a number of UK firms who have committed to not repeat these adverts. However, it seems that similar adverts, placed by other companies who are paying little attention to ASA rulings (often based outside the UK), continue to appear on Facebook pages. Facebook takes the adverts down when they are reported, but Mr Lewis´ point is that Facebook have already taken the money from the advertiser by this point and the adverts have already been seen by many Facebook users. His view is that as he does not advertise or endorse services in this way and he has shared this information with Facebook, then Facebook should know to refuse to take these adverts at all.

As a result Mr Lewis has decided to pursue Facebook as the “publisher” of these adverts through legal action. This doesn´t seem unreasonable. Facebook take money to run these adverts and Mark Zuckerberg himself said “I agree we are responsible for the content” [on Facebook] to US Congress on April 10. However, whether Facebook feel this responsibility extends as far as paying damages and/or being subject to other forms of penalty when content proves to be malevolent and/or untruthful remains to be seen. It is also far from clear that Mr Lewis will win his case. Normally in such cases it is that the advertisers themselves who are sued (the producer of the malicious content), not the medium through which the advert is transmitted. Mr Lewis, although a wealthy man, lacks the kind of resources that Facebook can draw upon. A long drawn out legal battle could prove very expensive especially if he has to pay costs to Facebook in the event of losing the case.

Martin Lewis is not known as a gambler and I´m sure he is well aware of the financial risk, so his decision is interesting.

A common problem in decision making is a failure to anticipate the full range of possible outcomes. You will often see a “best” and “worst” case in a proposal but these are often only minor variations from the “main” case, focused around financials. So let´s consider the possible outcomes from the Lewis/Facebook case from the instigator´s (Martin Lewis) perspective:

1. Mr Lewis wins. Even if he receives only minor damages this is a great outcome. His reputation will be enhanced as “the guy who took on a Facebook and won”. It is likely this would also force Facebook to change their procedures to get closer to the “ad-screening” process Mr Lewis desires, so his immediate pain with the false advertisers would also be resolved.
2. Mr Lewis loses. A significant potential negative financial impact, at least short-term. However, his reputation is still likely to be enhanced. A loss would likely build momentum for a campaign to change the legal framework around the status of such internet platform providers as Facebook as publishers. There is widespread acceptance that such “false advertising” online is wrong and needs to be stopped (or at least greatly reduced) and a Lewis loss in the courts is likely to be perceived as indicator that the law needs to be changed. Lewis would be in prime position to spearhead such a campaign in the UK.

Viewed from this perspective, as long has Mr Lewis has a reasonably good estimate of likely legal costs and is confident he can get a verdict (one way or the other) in a reasonable time-scale, his decision looks a lot less of a gamble.

From Facebook´s perspective there is significant risk in either outcome:

1. Facebook lose. In this case the precedent set by the case will open the door to others who believe they have been on the receiving end of false advertising to sue Facebook. No company wants to be on the receiving end of an avalanche of lawsuits.
2. Facebook win. Although emphasising that their actions to date have been lawful, a Facebook win is not likely to endorse the message that “you can trust Facebook with your data”. So the risk is around the increased likelihood of additional regulation. Currently, Facebook has 2.2 billion users and 27,000 employees. This means that much of the work enforcing fair use policies is left up to various automated mechanisms and reporting by Facebook users. A change in regulation obligating Facebook to enforce such fair use policies more stringently could result a very significant increase to the cost base.

One other possibility is a settlement agreement. Facebook would probably find this a very attractive option especially if it gives them the space to develop the “free speech” argument, which is the main counter to additional regulation. Given the options though, I doubt Mr Lewis will be very receptive to such a proposal.

Whatever the outcome here the machinations will be very interesting, both for the future of internet companies such as Facebook and for how we continue to conduct ourselves in the “online world”. When he started his service informing consumers how to cut their electricity bills and get the best mortgage rate I doubt Martin Lewis saw himself as a crusading hero for truth and justice – the “Erin Brockovich of Big Tech” – but that may just be how it turns out…