Facebook to pay 614,000 users $15 each over privacy concerns

A court settlement ordered the social media network to pay plaintiffs $15 each for using their information in advertisements.

Facebook has built an empire on getting to know its users’ preferences, sometimes with a frightening accuracy. A while back, the company launched a new advertising campaign called “Sponsored Stories” that incorporated users’ “likes” into advertisements. It offered peer endorsement of products and a way for Facebook to make money. But the new ad format was a step too far for many individuals, who were concerned about unknowingly having their name woven into an advertisement.

A lawsuit that accused Facebook of misappropriating users’ images ended with a settlement on Monday.

The agreement states that the social media site has to pay approximately 614,000 Facebook users $15 each for using their information for advertising purposes. While approximately 150 million Facebook users’ images and likenesses were allegedly used to promote products and services through the Sponsored Stories program, only users who entered a claim form by May 2, 2013, were eligible to receive settlement funds.   

It is far from clear that any of the users featured in the advertisements were “actually harmed in any meaningful way,” writes US District Judge Richard Seeborg in the statement.

“Plaintiffs have repeatedly relied primarily on their argument that Facebook benefited, rather than that class members were harmed,” the settlement reads. Even if the users had not read the entire Terms of Service agreement, they were presumably aware that engaging with the social media site – hitting the “like” button, for example – would broadcast their preferences to their social network, Judge Seeborg explains in the court document. This does not give the social media site a carte blanche for using any information from the site, but it does not force the site to adopt “pro-privacy” policies.

As part of the settlement, Facebook will make changes to its Statement of Rights and Responsibilities to give users greater information about and control over how they are featured in the Sponsored Stories.

Facebook users cannot currently opt-out of the Sponsored Stories advertisements, though the ads do respect users’ current privacy settings. For example, if a user likes a Starbucks page, only his or her friends will be able to see the “like.” The social media site recommends users adjust privacy settings on their activity log if they are concerned about information featured in Sponsored Stories.