Facebook Inc (FB): Public Citizen turns down $20M from Facebook for charge settlement

Posted Feb 15, 2014

Public Citizen has turned down a $20 million deal from Facebook Inc (NASDAQ:FB) to settle charges that the social network violated privacy of users by using “Likes” as endorsements for ads.

Public Citizen led organizations to back a legal brief urging a federal appeals court in San Francisco to throw out the deal made last year. The filing states that settlement fails to compel Facebook to change the ways that profile images are used in ads without the consent of parents or guardians. This practice is banned by laws in California and six other U.S. states reported Public Citizen attorney Scott Michelman.

“The capture and republication of teen postings by Facebook is a pernicious assault on their rights to decide where their messages should go,” stated Robert Fellmeth, director of the Children’s Advocacy Institute at the University of San Diego School of Law.

Back in August, a U.S. judge approved the deal to make Facebook pay for using member “Likes” as ads. The money would be divided between attorneys, Internet privacy rights groups, and Facebook users that filed claims in the class-action lawsuit. The Campaign for a Commercial-Free Childhood is expected to receive $290,000 of the Facebook money if the settlement deal survives the appeals.

As part of the deal terms, Facebook would let parents control how children likes and posts are used and not used. Public Citizen said that posts or likes from people that are younger than 18 years old should be automatically be made off-limits from ads.

The judge that decided on the settlement said that the deal was fair because of the challenges in providing Facebook members were financially harmed and signaled that “likes” for products did not imply consent. Facebook announced plans to discontinue Sponsored Stories in April.

“The court-approved settlement provides substantial benefits to everyone on Facebook, including teens and their parents, and goes beyond what any other company has done to provide consumers with visibility and control over their information in advertising,” stated Facebook spokesman Jodi Seth.

Facebook said in court that this practice simply takes information that users already voluntarily disclosed to their “friends” and redisplays it to the same people. This lawsuit was filed in early 2011.

[Source: 4-traders]