Facebook Defeats Teens' Lawsuit Challenging Sponsored Stories

Handing Facebook a big win, a federal judge has thrown out a potential class-action lawsuit alleging that the company violated teens' rights by using their names and images in ads.

The judge ruled that Facebook's “Statement of Rights and Responsibilities” protected the site from the lawsuit. Facebook's terms provide that users who “like” products or services also consent to have their names and images used in ads.

The teens who sued argued that they shouldn't be bound by those terms, given that they're minors, and that deals made my minors aren't always enforceable. U.S. District Court Judge Richard Seeborg in the Northern District of California rejected that argument this week. He ruled that teens can only get out of certain types of contracts -- like real estate deals -- due to their age. Agreeing to Facebook's terms of use isn't the type of contract that can be set aside due to age, he ruled.

Seeborg also indicated that being featured in an ad is a fair exchange for the ability to use the social networking service. “Facebook users have, in effect, simply granted Facebook the right to use their names in pictures in certain specified situations, in exchange for whatever benefits they may realize from using the Facebook site,” he wrote.

The teens who sued all opted out of a separate class-action lawsuit stemming from sponsored stories. That case resulted in Facebook agreeing to pay $20 million to settle allegations that sponsored stories misappropriated users' names and photos by using them in ads. Individual users who put in claims will receive $15 each, while a variety of nonprofits will split around $10 million. The settlement agreement allows Facebook to continue using members' identities in ads, provided the company tweaks its terms of service.

Seeborg signed off on the settlement last year, but not everyone agrees that it's for the best: A group of users are asking the 9th Circuit to vacate the settlement, as are some advocacy groups. The opponents offer a variety of arguments, but the most significant is that the company will be able to continue using teens in ads, without their parents' permission. Opponents say the laws of seven states prohibit companies from doing this, and that Seeborg shouldn't have okayed a settlement that arguably overrides those laws.

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