Facebook to Pay Charities $10M in Sponsored Stories Settlement

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

UPDATE 3: On Jan. 6, 2016, the 9th U.S. Circuit Court of Appeals upheld the lower court’s approval of the Facebook Sponsored Stories class action settlement.

UPDATE 2: A federal judge granted final approval to a new Facebook Sponsored Stories class action settlement on August 26, 2013.

UPDATE 1: Judge rejects Facebook Sponsored Stories class action settlement. 

Details of the Facebook “Sponsored Stories” class action settlement we reported last month have emerged, and, unfortunately, it doesn’t provide monetary damages to Facebook users.While the social network agreed to pay $10 million to various public interest groups that advocate for privacy laws, the only redress the class action settlement provides to users is more control over how their names appear in Sponsored Stories.

The tentative class action lawsuit settlement also requires Facebook to provide “additional notice” to users about “exactly what occurs when they take certain actions.” Facebook also agreed to an injunction that requires it to engineer additional controls to enable users to prevent specific actions from appearing in Sponsored Stories.

If approved, the proposed Facebook class action settlement will resolve allegations the social network violated a California law giving people the right to control the commercial use of their names and images. The Plaintiffs claimed Facebook turned users into marketers – without their permission or the benefit of compensation – by using their names and likenesses in Sponsored Stories for marketing purposes. The Plaintiffs further alleged Facebook did not adequately provide a way to opt out of the advertising program that began in January 2011.

The Plaintiffs were seeking at least $750 in damages per violation of the law.

U.S. District Court Judge Lucy Koh will hold a hearing in July about whether to grant the Facebook Sponsored Stories settlement preliminary approval.