The Facebook Terms of Use Lawsuit

Remember all of the drama surrounding Instagram's Terms of Use? Well, there is an interesting lawsuit happening in California regarding Facebook's Terms of Use. In 2011, five Facebook members filed a class-action lawsuit against the social networking site, stemming from the use of their names, profile pictures, photographs, likenesses, and identities to advertise or sell products and services through Sponsored Stories without obtaining users' consent. Before I go any further, a Sponsored Story is created if you “like” a brand’s Facebook page, or if you craft a status talking about a brand or its products, Facebook sells this content to the relevant brand and it appears as a Sponsored Story including your name and profile picture.

So, the plaintiffs, lead by Angel Fraley, claim that Facebook's Sponsored Stories feature violates California law by publicizing users' information without compensating them or giving them a way to opt out. After one failed attempt to settle the lawsuit, U.S. District Judge for the Northern District of California Richard Seeborg has held that Facebook's latest settlement proposal is adequate. As of December 2012, the settlement holds that Facebook users can claim a cash payment of up to $10 each to be paid from a $20 million total settlement fund.

Any money remaining will go to charity. In addition to the to monetary relief, Facebook will revise its terms of service to more fully explain the instances in which users agree to the display of their names and profile pictures in connection with Sponsored Stories, and to provide users with the ability to prevent particular items or categories of content or information from being displayed in future Sponsored Stories, among other changes. More to come ...