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Facebook shells out $10m for using users faces in adverts

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Facebook has settled a suit that could have seen it compensating 150 million people in the United States.

Facebook will pay out $10m to charity to settle a class action lawsuit that challenged the social network for using punters' mugshots in adverts.

The case was settled on Friday, 15 June, and Facebook have agreed to pay out £10m in a cy-pres settlement, meaning the settlement funds can go to charity.

Facebook's practice of using users' names and photos to promote commercial content landed them with a suit back in August 2011, just after they introduced the controversial new feature that did not allow users to opt-out from having their photos and names used to endorse brands. The suit was brought by five users in California, but as a class action would have included all persons in the US who had their Facebook identity used to promote an advert at or before the time of the case - a potential 150 million users, the number of Facebookers in America.

The users claimed that the unauthorised use of photos violated California's privacy law. The sponsored story idea has been rolled out more widely since the beginning of 2012.

Judge Lucy Koh referenced several quotations from Facebook chiefs explaining how the friend-endorsed adverts were much more valuable for advertisers. Koh said Californian law would favour the plantiffs.

"California has long recognized a right to protect one's name and likeness against appropriation by others for their advantage," Koh wrote.

Facebook is facing similar suits elsewhere, including one in Canada. ®

U.S. District Court, Northern District of California is Angel Fraley et al., individually and on behalf of all others similarly situated vs. Facebook Inc., 11-cv-1726.

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