Facebook’s ‘Sponsored Storie’ Settlement Rejected

Facebook IPO

A federal judge rejected Facebook's settlement for its "Sponsored Stories" lawsuit, saying he had doubts about the "adequacy and fairness" of the $20 million settlement that would still enable the social network to run the user-featured ads.

"Sponsored Stories" are advertisements from Facebook that publicize user "Likes" of companies, sometimes featuring users without their knowledge, according to the New York Times. Using likenesses of people to sell products without knowledge of consent is illegal in California.

Facebook's settlement would allow users under 18 to opt out of "Sponsored Stories" and would educate users about the process. The social network would also pay $10 million to those working on digital privacy rights and another $10 million to cover plaintiff legal fees. However, the settlement would not stop or even pause its continued sponsored stories.

Judge Richard G. Seeborg of the U.S. District Court in San Francisco asked both sides to justify the negotiated settlement and that the decisions made were not "plucked from thin air." He also questioned whether the plaintiffs' lawyers may have "bargained away something of value."

“We continue to believe the settlement is fair, reasonable, and adequate,” a Facebook spokesman told the Times.

We think the settlement looks as if this lawsuit was about getting paid. Facebook admits no wrongdoing, doesn't end sponsored stories and the plaintiffs get paid -- or at least their lawyers do. Is this justice? Not really, it's simply a quick payoff with minor concessions.

Contact Us