|Sun July 15 2012 17:26:13|
Facebook Donation Provision in Privacy Case Muddies the Waters
By: Ina Steiner
People became outraged when they learned that Facebook was using their likeness in advertising to other Facebook users. Some users filed a lawsuit against Facebook in the spring of 2011 for its practice of allegedly "appropriating the names, photographs, likenesses and identities" to advertise services for commercial purpose without their consent or the consent of their legal guardians when a minor was involved, for unfair and deceptive business practices.
The Proposed Settlement
The parties came to a settlement, and the Judge will hear the settlement motion to approve and motion to intervene on August 2, 2012.
Under the settlement, Facebook can still show its users an ad that displays you "liking" a product or brand with your name and image, and Facebook receives ad revenue from the brand for the advertising (it's called "Sponsored Stories"). The settlement proposes that Facebook do a better job of disclosing the practice on its website for 2 years. Here's a link to the settlement on Justia.com in PDF format.
"The injunctive relief will clarify the ways in which Users' actions may lead to their names and likenesses being included in Sponsored Stories ads, and they will have the tools to limit further appearances in Sponsored Stories ads."
However, Mashable wrote, "Facebook will continue to use member check-ins and likes as paid advertisements for brand pages. Facebook, however, will have to amend its current policies and user terms stating when a member signs up for the platform that gives the company the right to use specific content for sponsored-story ads. That means if you've ever "liked" Starbucks, the social network could use your likeness to sell a product to Starbucks friends."
Can Facebook Users Opt out of "Sponsored Stories" Ads?
To better understand the seeming contradiction - can users opt out of Facebook using their names and photos in Sponsored Stories, or not? - read EPIC's filing opposing the settlement terms. EPIC writes:
"Even those who read the new provision will remain uninformed. The provision does not explain which specific actions cause an individual's likeness to appear in a Sponsored Story. The class member who wonders whether Sponsored Stories are the result of likes, check-ins, posts, application uses, or all of the above, will not find the answer in the SSR. Given that the current SSR already gives Facebook the right to associate a user's image or profile with commercial content, it is not clear that the new provision provides much added benefit. Ultimately, notice and choice has been considered a failed model by both privacy scholars and the Federal Trade Commission. Yet it is precisely this failed model upon which the Proposed Settlement relies.
"Additionally, the Proposed Settlement does not clearly explain the new "mechanism" that will allow users to remove themselves from Sponsored Stories. The agreement states only that the mechanism will be "easily accessible" and will enable users "to control which of [their] interactions and other content are eligible to appear in additional Sponsored Stories." However, if the mechanism is anything like Facebook's existing privacy settings, consumers are likely to find it confusing and unwieldy. Examinations of Facebook's privacy settings have found that they regularly fail to allow consumers to achieve their privacy preferences."
The settlement also provides for non-profit organizations to split $10 million from Facebook. Mashable said over a dozen consumer rights groups, including Consumer Federation of America, Rose Foundation, Center for Democracy & Technology and the Stanford Law School Center for Internet and Society, will split $10 million from Facebook. "Many groups will receive $500,000 or $1 million each," it wrote.
This means the organizations will take money from Facebook and will then be expected to continue to act in a watchdog role over Facebook to ensure it respects users' privacy.
The Wall Street Journal raised similar questions about a 2010 settlement over a 2008 lawsuit against Facebook for sharing information about consumers' online activities, including product purchases made by Facebook users.
"While denying wrongdoing, Facebook last year offered $9.5 million to settle the case. Under the proposed settlement, the plaintiffs' lawyers stand to recover as much as 30% of that amount, with the remainder going not to Facebook users, but to a foundation focused on promoting privacy rights" - a foundation that was to be established in part by Facebook, which would then have a role in drawing up the foundation's bylaws and have a say in choosing one of its board members.
The current proposed settlement would result in watchdog groups using a corporation's money to educate users about the corporation's practices for which it has been sued for privacy violations,...
Either the corporation's practice was right or wrong, and the court should either prohibit the corporation from continuing the practice, or not. Including non-profit donations in a settlement just muddies the waters.