Feeds

Facebook facepalm: US judge tosses out 'sponsored stories' deal

Suggests $20m settlement offer for faces-in-ads feature was 'plucked from thin air'

Boost IT visibility and business value

Facebook's attempt to end litigation brought against it in the US over the launch of its unpopular "sponsored stories" feature has backfired with a judge throwing out the company's settlement offer late last week.

The social network had been expected to pay out around $20m and make amendments to sponsored stories, which arrived in Facebook in December 2011. The feature slurped up users' photos and used their faces in Facebook's in-site ads for brands after they had merely clicked the "thumbs-up" button and "Liked" the company.

Five complainants in the case filed a lawsuit seeking class-action status against Mark Zuckerberg's company, disputing Facebook's use of their photos in its advertisements.

In June, Facebook indicated it would hand over more control to its users with sponsored stories.

The move came after the lawsuit claimed that the network had violated California law by failing to give users the option to opt out of having their faces appear alongside ads on the site, nor from allowing them to gain some earnings from the promotion.

But late on Friday, California district judge Richard Seeborg dismissed Facebook's settlement offer. He said:

In this instance there are sufficient questions regarding the proposed settlement that it would not be appropriate simply to grant the motion and postpone resolution of those issues to final approval.

Justice Seeborg asked the plaintiffs' lawyers and Facebook - which considers the $20m settlement offer to be "fair, reasonable and adequate" - to show that the multi-million dollar figure hadn't simply been "plucked from thin air".

Facebook's proposal to end the litigation would have meant that the plaintiffs received $10m, plus up to $300,000 in costs, while a further $10m would have been ponied up to privacy advocates.

Importantly, however, the draft settlement also made it clear that Facebook would not be inhibited from running ads featuring users' faces in its sponsored stories feature.

Consumer Watchdog, which has a copy of the order here (PDF), unsurprisingly welcomed the judge's dismissal of Facebook's offer.

“Under the proposed settlement Facebook is poised to continue to misappropriate its users’ personal information without their consent,” said the consumer pressure group's staff attorney Laura Antonini.

More face-ache in Germany, too

Last week, Hamburg's data protection commissioner, Dr Johannes Caspar, confirmed (in German) that his office had reopened its probe of Facebook's facial recognition technology, complaining that the network was building a massive biometric database of its users.

The investigation had been suspended to allow time for the Irish data protection authority to conclude its talks with Facebook, which had included an audit of the company's data policy.

In December last year, Facebook had told the Irish DP commish that it would "examine the broader implications" of its photo-tagging feature during a July 2012 review.

Caspar has repeatedly argued that the tech, which detects the identity of people – based on existing pictures of those users on the site – in order to "tag" them in photos on Facebook, violates European data protection law because the default setting automatically opts users into being creepily identified and subsequently "tagged".

Facebook has previously countered that it rejected any such claim that it was failing to meet its obligation on data-handling in the EU.

As of last month, Facebook halted the facial recognition feature being used in Europe as talks with DP authorities continued.

"It is to be welcomed that Facebook clearly recognises that the process of collecting biometric data is at least not in accordance with data protection law in Europe. But Facebook can't just stay halfway there," Caspar said. ®

Build a business case: developing custom apps

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
Microsoft: We're making ONE TRUE WINDOWS to rule us all
Enterprise, Windows still power firm's shaky money-maker
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.