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Facebook Settles Sponsored Story Suit By Donating $10 Million To Charity

You may remember that Facebook got itself into a bit of a mess by using member’s names and likenesses in a particular kind of advertising called sponsored stories.” This tactic utilized user activity to create ads that looked a lot like organic content, and very little like an ad. Needless to say, some people weren’t particularly pleased and filed suit. A settlement was reached last month, but the details of the settlement have only just been made public. Turns out Facebook made the problem go away by donating $10 million to charity.

The suit, initially brought by five Facebook members in California, argued that the use of one’s likeness in a Sponsored Story violated California law by virtue of neither paying participants nor offering them a way to opt out. And this is in addition to the mere unpleasantness of not informing users when a Sponsored Story featuring their activity was being published and unfairly asserting that the user in question liked or endorsed the sponsor in question. It was an all around messy practice.

U.S. District Judge Lucy Koh said that the plaintiffs were able to show that the use of one’s likeness in a Sponsored Story could in fact cause economic injury, and stated “California has long recognized a right to protect one’s name and likeness against appropriation by others for their advantage.” Since then, Facebook has opted to settle the suit, avoid the risk of having to pay billions of dollars in damages spread amongst as much as one third of the population of the United States. $10 million to charity is, comparatively, a much, much smaller price to pay, especially if the company felt it was likely the ruling would not be in their favor. Facebook has yet to come out and make any sort of statement about the settlement, and it’s very unlikely they will. The sooner everyone forgets this ever happened, the better. Well, for Facebook anyway.

(via Reuters)

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