Privacy Rights Violations
Facebook's Sponsored Stories used the names, profile pictures, photographs, likenesses, and identities of Facebook users to advertise products and services without obtaining those users' consent.
These ads were the subject of a lawsuit filed by the Arns Law Firm in 2012 and a settlement was reached in 2013.
California law prohibits the use of a person's name or likeness in advertisements without that person's consent.
The Fraley v. Facebook case claimed the social media giant was harvesting the "Likes" if its users and converting them into what appeared to be personal endorsements paid for by Facebook advertisers.
Since these endorsements were never disclosed to the users, the ad campaign violated California laws protecting the right to privacy and publicity.
After the Northern California District Court denied Facebook's motion to dismiss the case, the parties settled in 2013. The settlement ultimately went to the 9th Circuit Court of Appeal, where it was upheld in 2016.
As a result, hundreds of thousands of Facebook users were sent checks totaling millions of dollars. Additionally, Facebook agreed to change its advertising campaigns to make them more transparent and controllable for users. Several groups that research and advocate for privacy rights received cy pres payments totaling several million dollars more.
In total, the settlement was valued at $20 million and Sponsored Stories were discontinued.