MagicJack, LP v. Boing Boing [1]

In March 2009, MagicJack, LP, the maker of an Internet telephone device and subscription service, sued the parent company of Boing Boing [2] over a blog post by Rob Beschizza criticizing MagicJack's End-User Licensing Agreement (EULA) and various aspects of its website.

The post, published in April 2008 on Boing Boing Gadgets and titled "MagicJack's EULA says it will spy on you and force you into arbitration [3]," notes how the MagicJack EULA purported to allow MagicJack to target ads at users based on their calls and required users to submit to arbitration. The post calls the targeted-ad provision a "systematic privacy invasion" and also makes fun of the visitor counter on MagicJack website, calling it "a fake, a javascript applet that increments itself automatically." Cory Doctorow republished the post on the Boing Boing home page under the title "MagicJack net-phone: swollen pustule of crappy terms of service and spyware [4]."

MagicJack filed a lawsuit for defamation and "unfair competition" in California state court.  Boing Boing moved to strike the complaint under California's anti-SLAPP statute (Cal. Code Civ. Proc. § 425.16 [5]).  In May 2009, the court granted the motion to strike.  It ruled that MagicJack's claims target protected speech activity because the statements "involve consumer information affecting a large number of persons" and that posting on the Boing Boing site "provides information about [MagicJack's] product not only to the 'substantial' number of people who have already purchased the device, but also to other consumers who might be considering purchasing such a device." 

On the merits, the court held that MagicJack had not established a probability of prevailing on its claims. Regarding the homepage counter, the court found that MagicJack's own evidence "shows that the counter is not counting visitors to the website." Regarding the EULA, the court found that Boing Boing's statements, read in context, did not imply that MagicJack was eavesdropping on its customers' calls.  Rather, the court found that Beschizza's statements expressed his non-actionable opinion that "analyzing phone numbers for purposes of targeted advertising amounts to 'spy[ing],' 'snooping,' and 'systematic privacy invasion.'"

On Boing Boing's motion for attorneys' fees, the court made MagicJack pay Boing Boing's fees in the amount of $52,754 and its costs in the amount of $1,221.03. In a post announcing the victory, Beschizza indicated that the award did not quite cover Boing Boing's costs, but they're nevertheless happy with the outcome, adding "we don't like being bullied, and we wanted the chance to tell anyone else threatened by this company what to expect."