Advocates Slam 'Sponsored Stories' Settlement

by Wendy Davis, Jul 11, 2012, 6:01 PM

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Facebook's tentative settlement of the “sponsored stories” lawsuit ran into more opposition this week, when the advocacy group Center for Digital Democracy filed papers arguing that the deal should be nixed.

"The proposed settlement fails to protect Facebook users ... by not ensuring that they are given meaningful control over sponsored stories," the CDD argues in a letter to to the court. The letter was addressed to U.S. District Court Judge Lucy Koh, who presided over the case when the parties announced they had forged a settlement. But on Wednesday afternoon, Koh abruptly stepped down from the case without giving a reason.

The deal calls for Facebook to pay $10 million to advocacy organizations and law schools -- including Stanford, where Koh's husband is a professor -- and $10 million to lawyers who sued the company on behalf of users. The agreement also requires Facebook to give users more control over sponsored stories -- which publicizes users' likes to their friends. Details on that point remain somewhat vague; court papers filed last month say only that Facebook will create "a mechanism that will allow users to see and control which actions they have taken that have led to their being featured in sponsored stories ads."

If approved, the deal would resolve a class-action lawsuit alleging that Facebook violated a California law giving consumers the right to control the use of their names and images in endorsements. That law also says that minors' images can't be used in endorsements without their parents' permission.

The CDD argues that the settlement should be rejected for several reasons, including that Facebook "has a poor track record" when it comes to giving users control over their data.

As an example, CDD cites Facebook's recent email address swap -- which involved Facebook hiding the email addresses where users wanted to be contacted and displaying Facebook.com email addresses instead. "The social network's recent move changing the email settings of users is an example of the kind of preemptive decision-making the platform often engages in, without considering privacy and consumer-protection implications," the CDD says.

The privacy organization also says that Facebook's plan to notify users about sponsored stories won't go far enough to insure that people understand the ad program.

CDD isn't the only one objecting to the deal. A separate group of consumers -- parents of minors on the site -- who brought their own potential class-action lawsuit about sponsored stories, also say the settlement should be vetoed.

Additionally, a coalition of groups led by the Electronic Privacy Information Center complained in a letter dated Wednesday that the law schools and organizations slated to receive $10 million haven't represented Facebook users in privacy matters.

"The interests of the class members are best served by supporting those consumer, privacy, and academic organizations that routinely represent class members before federal and state agencies, that seek to establish stronger privacy protections for Facebook users, and that provide direct assistance to those who confront privacy problems," says the letter, which was signed by representatives from EPIC, CDD, Privacy Rights Clearinghouse and the Institute for Public Representation at Georgetown University Law Center.

They ask the court to consider ordering that a portion of the settlement funds be awarded to them. Koh stepped down at around the same time that a copy of that letter began circulating.

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