Judge approves $20 million Facebook fund to settle advertising suit

The suit addresses the use of members' likenesses for the site's sponsored stories program

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.

The proposed settlement class includes roughly 150 million Facebook users whose names or likenesses were allegedly misappropriated to promote those products and services, the ruling said. Facebook has more than 1 billion users total.

The fund is to be distributed in cash payments of $15 each to Facebook members who submitted valid claims, the ruling said. Settlement administrative expenses, attorney fees and costs, and incentive awards will also be paid for through the fund, according to the ruling.

The ruling also requires the social network to make changes to its Statement of Rights and Responsibilities to give users better information about, and control over, how their names and likenesses are used in connection with sponsored stories.

The original settlement agreement proposed by the parties did not win preliminary approval, the ruling noted.

In the lead-up to Monday's ruling, plaintiff groups had argued that the proposed settlement had violated laws in seven states requiring parental consent for use of a child's likeness.

Public Citizen, a consumer advocacy group that represented six parents in the case, had argued that Facebook does not seek the consent of members to use their images for advertising, or parental consent when the users are children.

Those arguments -- that the settlement does not appropriately handle issues related to minors -- were among the most vigorously advanced objections, Monday's ruling acknowledged.

"The record leaves no doubt that this settlement was the product of arms-length negotiations and compromise," the ruling said.

Still, although the monetary relief to each class member is small and the percentage of class members who submitted a claim is limited, "the settlement as a whole provides fair, reasonable and adequate relief to the class," the ruling said.

In a statement, a Facebook spokeswoman said the company was "pleased" that the settlement had received final approval.

Public Citizen said it was disappointed by Monday's decision. The ruling "gave short shrift to kids' online privacy rights and will enable Facebook to continue exploiting minors' images for profit in violation of the laws of seven states," said Scott Michelman, a staff attorney with the Washington, D.C.-based group.

Public Citizen has identified the seven states as California, Florida, Tennessee, Virginia, Wisconsin, New York and Oklahoma.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags advertisingInternet-based applications and servicesCivil lawsuitslegalsocial networkingsocial mediainternetFacebook

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Zach Miners

IDG News Service
Show Comments

Essentials

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?