Facebook ‘Sponsored Stories’ settlement wins judge’s approval

By Brandon Bailey

| San Jose Mercury News

First Published Dec 04 2012 10:04 am • Last Updated Dec 04 2012 10:04 am

A federal judge gave preliminary approval Monday to a negotiated settlement of a class-action lawsuit over Facebook’s use of its members’ names and photos in online advertising, while a public interest lawyer vowed to continue pressing objections that the deal fails to protect minors.

Under the settlement, Facebook would set aside $20 million to provide a cash payment of up to $10 each to Facebook users who objected to their names being used in so-called "Sponsored Stories" advertisements. Facebook also agreed to create new user controls that will let people opt out of the program.

U.S. District Judge Richard Seeborg ruled Monday that the settlement meets the requirements for preliminary approval, adding in a written order that it "has no obvious deficiencies" and "appears to be the product of serious" negotiations between lawyers for Facebook and a group of users who filed suit against the ad program. Both sides told the judge last month they felt the agreement was a fair settlement.

But attorneys for the nonprofit Center for Public Interest Law had argued that Facebook should be required to get affirmative consent from parents before using the name or photo of any Facebook user who is under 18. Center attorney Robert Fellmeth said Monday that he will file a further objection to the settlement and vowed to take the case to appellate court if Seeborg grants final approval.

The case involves a key element of Facebook’s effort to build advertising around its users’ likes and recommendations. The "Sponsored Stories" program lets companies pay Facebook to distribute messages to a user’s friends when that user clicks the "Like" button or takes other action on an advertiser’s Facebook page.

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