Those annoying little advertisements that flank every Facebook user’s newsfeed — called “sponsored stories” — have become another thorn in Facebook’s already thorny side.
The social media titan has reportedly agreed to pay $10 million to settle a class-action lawsuit over the advertisements, which employ users’ names and likenesses without their explicit consent to produce targeted product pitches to their friends.
Here’s how the sponsored stories work: A Facebook user with a weakness for Magnum ice cream might indicate that he officially “likes” the product on his personal profile page. Facebook, with the help of that user’s photograph, might then effectively turn him into a spokesman for the brand by plastering his image and support of the ice cream on his friends’ newsfeeds.
Five Facebook users brought the lawsuit in California last year. Because they could not opt out of the sponsored advertisements and were not paid for the promotions, they claimed Facebook was violating California law.
U.S. District Judge Lucy Koh said the plaintiffs had shown that economic injury could occur through Facebook’s use of their names, photographs and likenesses.
“California has long recognized a right to protect one’s name and likeness against appropriation by others for their advantage,” Koh said.
Facebook has declined to comment on the settlement, which the company reached last month but only made public on Monday. The terms of the settlement allow users to adjust privacy controls in order to restrict who can see the sponsored stories.
Users will not, however, be able to avoid taking part in the advertisements altogether. On its website, Facebook assures users that their stories will only be shared with friends who already have access to their activities.
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