Facebook has been convicted of copyright infringement on the database represented by the “Faround” application, as well as of committing acts of unfair competition to the detriment of Business Competence, a software house based in Milan which developed the app.
This is what was established by the Court of Appeal of Milan in judgment no. 1916 of 04.16.2018 of violation an and in judgment no. 9 of 01.05.2021 on the quantum compensation reformed in the sum of € 3.831,000.
Faround is a mobile phone application developed in 2012 by Business Competence that, through an algorithm that selects and organizes the data present on users’ Facebook profiles, displays the nearest shops on an interactive map. Depending on this, the app was first registered on the Facebook App Center as it was officially tested and approved by the social network and, subsequently, in the Facebook App Store, as an app compatible with it.
Well, three months after the launch of Faround, Facebook developed Nearby, an application that, through geolocation, allows users to locate shops, clubs and local restaurants.
In the course of the lawsuit, it has been shown that the functionalities of the program created by Facebook are, in fact, the same of Faround: the two applications are extremely similar in purpose and general setting, not detecting the found graphic and functional differences.
Facebook’s copyright infringement is based, first of all, on the recognition of Faround as a creative work of intellect and, specifically, as a database implemented in the form of a computer program. The Court of Milan considered that the prescribed requirement of originality of the work existed because the peculiar choice and arrangement of the data contained in the app is an expression of a free and creative choice of the author who, in this way, manifests his personal contribution. In this regard, it has also been specified that authorial protection concerns not only reproduction but also “the adaptation, transformation and any other modification“ of the work which, in general, must be authorized by the author.
For what concerns the lawfulness of the analysis activity of the program by a third party, the Court considered void the contractual clause invoked by Facebook’s lawyers, according to which the latter reserved the right to “analyze applications, content and data for any purpose, including commercial“. The declaration of invalidity is based on the assumption that the private autonomy cannot derogate from the limits of lawfulness of the analysis activity, if it is carried out for purposes other than those typical, such as – in the first place – testing the program.
In addition, a further censorship aspect of the conduct under consideration was found in the fact that Facebook benefited from “privileged and anticipated” access to both a prototype of the application and the data flows that Faround exchanged with the platform itself. It has therefore been shown that, before the application was made public, Facebook had the opportunity to analyze its operation both “user side” and “interaction side with the Facebook ecosystem”.
Finally, the conduct in question was considered unlawful from the point of view of unfair competition because Facebook would have incurred a “parasitic appropriation of other people’s investments for the creation of a work with significant economic value”. In fact, by abusing the trust relationship generated with the developer, the US company would have exploited to its advantage – without incurring excessive costs – the results of the research, development, as well as the investments made by the developer.