The internet is not a frontier. It is a completely human creation, governed by human behaviour, and is therefore subject, however imperfectly, to the Rule of Law. If someone purports to put themselves or their activities outside of the Rule of Law, then they should not be surprised if, eventually, it lands on their head like the proverbial ton (or tonne) of bricks.
I don't care whether its in reality or on-line, if you cause someone damage by your neglect or willful actions, or your willful blindness, you are legally responsible, in accordance with the civil law in hundreds of countries, and in particular in the common law in all countries that trace their legal system to England. Negligence is a tort that has existed since a lady found a decomposed snail in the bottom of her bottle of ginger beer (good ol' Donoghue v. Stevenson [1932] UKHL 100), and Facebook has been, at the very least, negligent, and at the most, complicit. This is not an opinion, but established legal precedent, that applies equally to the internet.
Dustinzgirl, you are likely referred to the "duty of care" cases, where websites were held not responsible because they did not perpetrate the damage, and they owed no duty of care to the person damaged (i.e. the rape victims, the suicides, etc.). In this case, Facebook is (or was) abetting the damage to China M., and had done so for some time, and avoided or neglected dealing with it when they have full power to do so, despite his demand. Also, Facebook is responsible for making reasonable changes to its software to prevent damage (i.e. designing a better gas tank). GM and Ford were both nailed for millions, as their poor design led to unnecessary deaths, even though the cause of the accidents had nothing to do with GM or Ford, because the results of the accidents were disproportionate to the cause, due to poor design. It is the same thing with Facebook. If they can institute reasonable changes to their software that would make impersonation more difficult, or would lead to impersonators being removed more quickly, then they must do so, otherwise, they begin building liability, just as Ford and GM did in the 1970s.
That FB has acted, finally, was likely due to their in-house counsel screaming at the top of their lungs to comply with China M.'s demand (only the in-house lawyers, though. The outside, contracted lawyers (i.e. for litigation) were likely waiting with glee for the millions in fees they would be paid due to the stupidity and arrogance of their client).
