• by Wendy Davis  @wendyndavis, February 10, 2010

Facebook has been hit with two new potential class-action lawsuits stemming from recent revisions to its privacy settings.

The cases, filed recently in federal district court in San Jose, Calif. on behalf of nine Facebook users, allege that the new settings are "confusing and materially deceptive" and lessened their privacy.

"Facebook has violated the privacy rights of the members of the Facebook.com Web site, misappropriated their personal information, and converted that information for commercial use by means of materially deceptive conduct," the complaints allege.

Late last year, Facebook sparked controversy by classifying a host of data as "publicly available information" -- including users' names, profile pictures, cities, networks, lists of friends and pages that people are fans of. Facebook also changed the default settings for many users to share-everything, spurring criticism that users who reviewed their settings quickly and accepted the defaults might inadvertently share more than they had intended.

The consumers who sued allege that the opt-out controls offered by Facebook are "misleading and very difficult for them to use."

"There are at least 29 different privacy settings spread out over numerous web pages," they allege. "The privacy setting procedures are grossly ineffective and users are misled into allowing Facebook to having their personal information easily accessed for commercial use, exposing them to identity theft, harassment, embarrassment, intrusion and all types of cybercrime."

Facebook spokesperson Andrew Noyes said the company is confident that its transition process "was transparent, consistent with people's expectations, and well within the law." He added: "Any recommended changes to a person's privacy settings were clearly shown to them repeatedly and were not implemented until they accepted these changes.

In addition, people who used the transition tool were required to review their final settings after any changes and were pointed to where they could reverse or further customize their settings."

The new settings spurred advocates like the Electronic Privacy Information Center to complain about Facebook to the Federal Trade Commission. Last month, David Vladeck, head of the FTC's Bureau of Consumer Protection, said that EPIC's complaint "raises issues of particular interest for us at this time."

The consumers in the most recent lawsuits allege that Facebook's new settings violate California's business code as well as their "right of publicity," or right to control the commercial use of their images, according to Facebook's papers.

That issue came up before for Facebook in November of 2007 when it introduced Social Ads, which told members which of their friends have signed on as "fans" of the advertisers. At the time, University of Minnesota law professor William McGeveran said that the program appeared to violate New York and California law that bans companies from appropriating other people's names or likenesses for commercial purposes. Several months after introducing SocialAds, Facebook added a control that let members opt out.

These new cases are separate from a prior privacy class-action brought in San Jose stemming from Facebook's Beacon program. U.S. District Court Judge Richard Seeborg is weighing whether to approve a controversial $9.5 million settlement in that case.