by David Kravets
June 21, 2012
Facebook is agreeing to give its users the
right to “limit” how the social-networking site uses their faces in ads, as
a part of a way to settle a privacy lawsuit brought against the company.
The other part of the settlement is $10 million in fees to the lawyers who
brought the case against Facebook’s so-called Sponsored Stories program and
a $10 million donation to charity.
Sponsored stories work like this:
If a Facebook user ‘likes’ an advertiser,
that user’s profile and picture may appear on their friends’ Facebook
pages - in ads - stating that the person, indeed, ‘likes’ that
advertiser. Facebook also reserves the right to do this on ads that
appear on sites other than Facebook.
The suit, filed in April 2011, claimed that the
social-networking site did not adequately inform people of the feature or
give them a way to opt out of the advertising program that began in January
As part of the deal, the social-networking site will have to disclose to
Facebook users in its new terms of service, which nobody reads, that it can
use its 850 million users as public spokespersons for some company for just
having “Liked” a company in order to watch a movie or get a discount.
Terms of the deal were unveiled Thursday and they require Facebook to
let members be,
“capable of taking steps to limit their
appearance in those ads.”
Read that lawyerly phrase again - it
doesn’t mean provide a way to opt out entirely.
The settlement, which still needs to be approved by a California federal
judge, also says:
Facebook will create an easily accessible
mechanism that enables users to view the subset of their interactions
and other content that have been displayed in Sponsored Stories.
Facebook will further engineer settings to
enable users, upon viewing the interactions and other content that have
been used in Sponsored Stories, to control which of these interactions
and other content are eligible to appear in additional Sponsored
While the 45-page settlement agreement is
nebulous at best when it comes to how much a Facebook user would be able to
stop appearing on Sponsored Stories, the deal makes clear that plaintiff’s
lawyers are entitled to up to $10 million in fees, and that Facebook will
donate $10 million to charity.
Facebook users receive no compensation under the
Facebook contends in the settlement that it
stands to lose as much as $103 million in ad revenue over the life of the
two-year agreement. Facebook and the plaintiff’s attorneys did not respond
to calls and emails seeking comment.
It’s not the first time Facebook has run into legal trouble over user
privacy, although the consequences of its actions have been minimal at best.
In November, the Federal Trade Commission (FTC) slapped Facebook’s hand to settle
government charges it “deceived” users that their information would be kept
private, although it was “repeatedly” shared with the public.
The FTC deal, among other things, required Facebook to submit to a privacy
audit every two years for the next two decades.
The accord, which carried no financial
penalties, demands that the social-networking site obtain,
“express consent” of its 850 million users
before their information “is shared beyond the privacy settings they
In 2010, a federal judge approved a $9.5 million
settlement to a class-action lawsuit challenging Facebook’s so-called
“Beacon” program that monitored and published what users of the site were
buying or renting from Blockbuster, Overstock and other locations without
The lawyers in that case were awarded about
$3 million of the pot, and the
remainder was earmarked for grants to study online privacy.
Facebook, without admitting wrongdoing, terminated the Beacon program,
though much of it has resurfaced under the guise of Facebook’s so-called