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February 14, 2014

Facebook Sponsored Stories Deal Attacked by Parents, Advocacy Groups

Credit: Matt Harnack / Facebook

Facebook once again is in hot water over its Sponsored Stories feature.

Child advocates, digital privacy groups and parents are asking a federal appeals court to reject a $20-million agreement that enables Facebook to use pictures of minors in ads without parental consent.

The group on Thursday filed a challenge to the settlement which, they say, is illegal in seven states: Florida, New York, Oklahoma, Tennessee, Virginia and Wisconsin.

The filing urges the U.S. Court of Appeals for the Ninth Circuit to reject the settlement approved by U.S. District Judge Richard Seeborg last August in which the social network was forced to pay $9.21 million out of the $20 million to compensate class members — that’s $15 for each of the roughly 614,000 Facebook users whose personal details appeared in ads on the site without their permission. The remainder of the $20 million was used to pay off attorney fees and other expenses.

As part of the settlement, the social network was also ordered to give users more control over how their content is shared as well as to provide new terms on targeting children.

Margaret Becker of Brooklyn, N.Y., one of the parents Public Citizen represents, is fighting the settlement for the sake of her teenaged daughter.

“I’m fighting this settlement because Facebook shouldn’t be permitted to use my teenage daughter’s image for profit without my consent,” she said in a press release. “The Internet compromises children’s privacy in many ways that we parents must grapple with. But this settlement lets Facebook make my daughter a shill and leaves me powerless to stop it.”

Legal director of the Center for Digital Democracy Hudson Kingston said teens are not prepared to “address the consequences of Facebook’s practice of creating ads with profile information but without their knowledge. If this settlement stands, teens face a serious loss of their privacy and a damaged reputation continuing into adulthood. Research proves teens are not ready for this kind of exposure, and parents’ consent for commercial appropriation is a necessary protection.”

The Campaign for a Commercial-Free Childhood (CCFC), which was one of the groups designated to receive money as part of the settlement, has said it will reject its $290,000 because it opposes the agreement with Facebook. The CCFC described the settlement’s protections for minors as “hollow” and “meaningless.”

“While we always understood the Fraley settlement agreement as a compromise, we came to understand that it’s worse than no settlement,” CCFC director Susan Linn said in a press release. “Its purported protections are largely illusory, and it will undermine future efforts to protect minors on Facebook. We could do a lot of good with $290,000, but we cannot benefit from a settlement that we now realize conflicts with our mission to protect children from harmful marketing.”

Facebook was sued by five of it members in 2011. The group alleged the site’s Sponsored Stories feature broke California law by exposing users’ ‘likes’ of brands without any compensation or way to opt-out. A Sponsored Story is a special ad that appears on users’ news feeds indicating which products have been endorsed by friends through the site’s ‘like’ feature.

Although the names and pictures of an estimated 150 million Facebook members were used in Sponsored Stories, only those who replied to an e-mail from the site last year will receive a payout — amounting to $15 per person. Seeborg said while the $15 users will receive does not seem like much, it is reasonable considering the plaintiffs were unable to prove either that Facebook had “undisputedly violated the law” or that they had been “harmed in any meaningful way” by Facebook’s actions.

Facebook spokeswoman Jodi Seth, in a statement to IDG News, said the settlement enables the social network’s users to opt out of the sponsored ad program.

“The court-approved settlement provides substantial benefits to everyone on Facebook, including teens and their parents, and goes beyond what any other company has done to provide consumers visibility into and control over their information in advertising,” she said. “The same arguments on state law were raised and rejected by the court last year, and a dozen respected groups continue to support the settlement.”


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Jennifer Cowan is the Managing Editor for SiteProNews.

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