Facebook in $10m deal to settle ‘sponsored stories’ suit

Social media web site Facebook has agreed to fork out $10 million to charity following complaints over its ‘sponsored stories’ feature, which allows advertisers to use the image and name of users who have ‘liked’ them to advertise products without paying those users or letting them opt out, reports Global Legal Post.

According to the Daily Telegraph newspaper in the UK, the social network – which is struggling to retain a high valuation since its recent stock market flotation – settled the lawsuit brought by five angry users last month. The settlement – which still needs judicial approval – will see the $10m go to charity rather than those who brought the case.

Facebook founder Mark Zuckerberg gained particular attention for a comment he made during the suit, stating that a ‘trust referral’ by a user was the ‘Holy Grail’ of advertising.

But California-based US District Judge Lucy Koh said the plaintiffs had demonstrated that economic injury could occur through Facebook’s use of their personal data, writing: ‘California has long recognised a right to protect one’s name and likeness against appropriation by others for their advantage՛՛.

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