Facebook Reportedly Set To Shell Out $10 Million In Sponsored Stories Lawsuit

Handing over $10 million in a lawsuit settlement doesn’t sound like a great result for a company, unless, however, that company is Facebook and it could’ve potentially had to pay billions. Back in May it was reported that the company had settled with users suing over what they called a “misleading advertising scheme” involving “Sponsored Stories,” but the terms were undisclosed at that time.

Users claimed the sponsored stories featured ads that would display that person’s activities — “liking” a page or becoming a fan of a brand — on their pals’ pages, and basically turn a user into a marketer.

Five of those users unhappy with Sponsored Stories sued Facebook back in 2011, claiming the practice turned them into unpaid advertisers, with no chance to opt out of having their activities and images commercialized in such a way.

The terms of the settlement were previously undisclosed, but Boston.com reported the $10 million figure over the weekend. That money will be given to charity, confirmed Facebook’s attorney, after a judge approves the settlement.

Facebook said the practice didn’t hurt the plaintiffs it didn’t hurt the users at all.

Facebook settles sponsored stories suit for $10M [Washington Post]


Edit Your Comment

  1. Blueskylaw says:

    Wait a minute, Facebook is in advertising? I thought they were all about social networking
    and connecting friends with each other? This new revelation is truly disturbing.

    • Coffee says:

      It’s cool…as long as you just keep using the profiles of your victims, they’re not collecting any real data about you.

      • consumerd says:

        +1- Facebook is much better when the profile isn’t your information. Hell I made up a profile for facebook.

  2. Loias supports harsher punishments against corporations says:

    This explains the recent desire for an IPO purchase. To pay off legal bills.

  3. Schildkrote says:

    “Facebook said the practice didn’t hurt the plaintiffs it didn’t hurt the users at all.”

    Has Mary Beth Quirk taken up rap?

    MBQ in da house, let’s go!

    Mashin’ on the keyboard, writin for Consumerist
    You could fill a book with all the typos errors that I missed, yo
    got at least a thousand things wrong just yesterday
    my spellcheck button’s been hit by the grocery shrink ray
    “Her articles are fine! You better stop, don’t slam her!”
    White knightin me while I commit war crimes against grammar
    but I guess the English language ain’t protected by Geneva
    and at least my rhymes so chill it’s like you just been in a freeza

    etc. etc.

  4. Boiled for your sins says:

    Now they call them ‘trending stories/videos/etc’ and do exactly the same thing.

  5. Jawaka says:

    So basically Facebook just made a $10 million tax deductible donation to charity.

  6. dush says:

    Isn’t the whole point of “liking” something to tell everyone else what you’re in to?
    If you don’t want to do that then don’t “like” something. Sheesh people are whiners.

    • adamstew says:

      It was beyond that. If I were to have mentioned “valve lubricant” in one of my facebook posts without mentioning a brand at all, facebook would scan the content of my post and match it up with ads that companies had paid for.

      So they would then take my picture, a little blurb about how “Adam mentioned lubricant.” and put that next to an ad on one of my friend’s facebook feeds. The ad could have been for an actual brand of valve lubricant, that I hadn’t even mentioned. There have also been cases where instead of an ad for a particular brand of valve lubricant, it put up an ad for Astroglide…or other something equally inappropriate.

      It created the illusion of an endorsement of the product by your friends and also created some embarrassing situations, depending on who your friends are.

  7. notanignoramus says:

    They are still doing this – my 10 year old cousin suddenly “likes” Prepaid Visa… There is a little gray “Sponsored” on the bottom right hand corner of the post in my feed. WHY?

  8. notanignoramus says:

    Well, if they settled today, then they should end the practice TODAY. Over the weekend I suddenly noticed that my cousin “likes” Prepaid Visa. Except that there is a grayed-out “Sponsored” at the bottom right hand corner of the post. Oh, and that my cousin is WAY TOO YOUNG to like a credit card!

  9. brinks says:

    There was a way to opt out if this. The problem is the option to opt out was deeply buried in the privacy settings, and most people had no idea that this was even happening. I only knew about it and opted out because someone posted something about it.

  10. podunkboy says:

    I noticed today that my facebook main page has changed with 2-3 ads on the top of the right-hand column that won’t go away, then my birthday and event notifications, then applications, but somehow my one-click links to games that used to be at the top of the column are gone. They’re bound and determined that I’m going to look at those underwear ads.