Facebook To Pay $20M For Sponsored Stories Privacy Breaches
A U.S. judge has put a stamp of approval on a US$20 million fund for Facebook to settle a class-action advertising suit, despite objections from groups representing minors on the site.
The ruling was issued Monday in the U.S. District Court for the Northern District of California. The class-action suit, which was first filed in 2011, challenged Facebook’s “sponsored stories” advertising program. A sponsored story is a type of promoted post appearing in users’ feeds that may include the profile name and picture of Facebook members who have “liked” that advertiser’s products or services.
As Wired reports, “Sponsored Stories” basically turns the act of pressing the Facebook “Like” button into a potential commercial endorsement. If a Facebook user clicks the “Like” button for a product or service with a Facebook page, that user’s profile picture and name may be automatically used in advertisements for that product or service that appear in the their friends’ Facebook pages. Facebook also reserves the right to show such ads on sites other than Facebook.
U.S. District Judge Richard Seeborg in San Francisco approved the revised deal months after he said he had “serious concerns” because it originally provided a $10 million payout to attorneys suing Facebook and $10 million to activist and research groups in what is known as a cy pres award.
Under the new plan Seeborg approved, the same $20 million pot is to be shared by charities, the class-action attorneys and the 125 million U.S. Facebook users who appeared in a “Sponsored Story” without consent.
In a statement, a Facebook spokeswoman said the company was “pleased” that the settlement had received final approval.