Facebook settles class action by allowing users to avoid having their photos appear in advertisements

June 27, 2012 by

A settlement in a recent Facebook class action lawsuit means users will soon have the option to back out of ads that show their pictures and name next to “sponsored” advertisements on the social networking pages of their friends. The decision comes after users claimed Facebook was using their images without first obtaining proper permission.

Under the new rules, analysts believe Facebook is set to lose upwards of $100 million in lost revenue.

 As part of the class action lawsuit Facebook was ordered to pay $10 million.

Facebook was sued after users who clicked on the “Like button” for a brand or service saw their pictures and names recommending that brand to their friends. During the lawsuit Mark Zuckerberg called friend based referral advertising the “Holy Grail” of the social network advertising market.

While Facebook does not have to stop the advertising platform they have been ordered to provide an “easily accessible mechanism” for users to “opt-out” of the platform and to see how much of their data is being used for Sponsored Stories.

Facebook is no stranger to lawsuits, another case recently filed against the planet’s largest social network alleged that the company has been illegally tracking users after they log off the site, that lawsuit calls for $15 billion in damages. In another lawsuit involving Facebook, IPO investors say Mark Zuckerberg and his team informed some investors of troubling revenue information while leaving other investors high and dry just as the company prepared to debut on the Nasdaq exchange.

Steve Larson
An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, consumer cases, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, employment matters, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve's clients value his creative approach to resolving complex litigation matters.

Legal Disclaimer

The information contained in this blog does not constitute legal advice, and does not create an attorney-client relationship. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked to this blog.