Judge Wants More Info In Facebook Sponsored Stories Lawsuit Over Internet Privacy Issues

As facebook becomes less a social gathering place and more of a venue for advertising, the big company has come under attack.  It was sued over its policy of using facebook members’ faces in ads called sponsored stories.  As reported by Wired Magazine and other sources a San Francisco federal judge declined Thursday to approve a Facebook privacy settlement concerning the social networking site’s “Sponsored  Stories” advertising program, saying he was concerned that the $10 million payout was not adequately explained, and might not be big enough.

The deal, which does little to bolster the privacy of Facebook’s approximately 150 million U.S.-based users, provides $10 million to the lawyers who sued the social-networking site and another $10 million to charity, in what is known as a cy pres award.

Sponsored stories work like this if a Facebook user clicks the “Like” button for a product or service with a Facebook page, that user’s profile picture and name may be automatically used in advertisements for that product or service that appear in the their friends’ Facebook pages. Facebook also can show such ads on sites other than Facebook.

The judge wants more information from the lawyers on why this settlement amount is enough.  The case doesn’t stop Facebook from using the sponsored stories approach, at the end of the day facebook users will have to accept it.  The only change is that they will be notified of what a sponsored story is and how their image will be used.  (Minors would be able to opt out of sponsored stories, but not adult users).

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