Facebook ‘Sponsored Stories’ Settlement Backed by Court

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A federal appeals court on Wednesday clicked the “like” button on the $20 million settlement of a sweeping privacy challenge to Facebook’s past use of social media images in advertising features.

In a unanimous three-judge ruling, the 9th U.S. Circuit Court of Appeals rejected a challenge to a hard-fought settlement of a class-action brought on behalf of Facebook users that centered on claims that the now-abandoned “Sponsored Stories” ad feature violated privacy rights.

The $20 million settlement would pay about $15 apiece to the 614,000 class members who have filed a claim, with about $2 million also set aside for nonprofit organizations and charitable groups, including children’s advocates, and as much as $5 million for lawyers for Facebook users, according to court papers.

The appeals court called the $15 settlement figure “reasonable” in view of the “minimal (if any) harm suffered by the plaintiffs.” The court also backed the settlement provisions setting aside money for the organizations because those groups focus on issues, such as consumer privacy, that were the basis of the lawsuit.

While lawyers who led the privacy case against Facebook strongly defended the deal’s terms, a group of parents — backed by the consumer advocacy group Public Citizen — intervened to nix a settlement approved in 2013 by a San Francisco federal judge.

Public Citizen argued the settlement still makes it too easy for Facebook to use the images of minors without parental consent, violating privacy laws in at least seven states, including California. The small band of parents also maintains that Facebook should have paid more to settle, and that lawyers got too much of the pie.

The case raised claims that Facebook violated the rights of both adult and underage users by including their photos without proper consent in its short-lived “Sponsored Stories” feature. After U.S. District Judge Richard Seeborg rejected an initial $10 million settlement, Facebook and lawyers for Facebook users beefed up the terms, which include additional controls for parents when their teenagers sign up for the social media site.

California Attorney General Kamala Harris and the Federal Trade Commission weighed in on the appeal, remaining neutral on the settlement but being clear in stating they believe Seeborg got one thing wrong — that federal privacy protections supersede state laws such as California’s. The state and federal government lawyers argued that laws such as California’s include extra layers of protections that can be enforced against online distributors of underage images.

The appeals court said that issue remains unresolved, but that it does not undermine the settlement deal.

Source: www.montereyherald.com www.montereyherald.com

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