Supreme Court Turns Away Challenge To Facebook's 'Sponsored Stories' Settlement

The U.S. Supreme Court has refused to hear a challenge to Facebook's $20 million "sponsored stories" settlement.

The move leaves in place a settlement that requires Facebook to pay $15 each to around 600,000 users whose name and images were featured in “sponsored stories” ads that were shown to their friends. The deal also obligates Facebook to change its terms of service to require users to consent to their names and photos appearing in ads. Users under 18 must represent that at least one parent agrees. (The company discontinued the “sponsored stories” program in 2014, but still allows people's names and photos to be paired with ads.)

The University of San Diego's Children's Advocacy Institute challenged the terms of the settlement, arguing that the deal allows Facebook to flout state laws that prohibit companies from using minors' names and photos in ads without their parents' consent.

The settlement, approved in 2013 by U.S. District Court Judge Richard Seeborg, resolved a class-action lawsuit alleging that Facebook's sponsored stories violates a California law about endorsements. That law says companies need adults' permission before using their names or images in ads.



Earlier this year, the 9th Circuit Court of Appeals rejected a challenge to the settlement. That court said it's unclear whether the ad program violated California's law. The appellate panel added that the settlement offers "more protection for minors from Facebook's advertising practices than existed before."

The Children's Advocacy Institute then asked the Supreme Court to review the deal. The advocacy group brought its petition on behalf of Michael Depot, the father of two underage Facebook users.

"The nature of the Internet poses unique dangers to children," the organization wrote in its petition to the Supreme Court. "Children lack maturity, which may lead to ill-considered decisions. If a child posts regretted information, it is commonly accessible for years."

The group added that Facebook's new procedures for obtaining consent to the use of people's names and images wrongly require people to grant the company a "blanket privacy waiver."

"There is no real or lawful child or parental consent," the organization argued. "Neither the child nor any parent will necessarily nor even likely see what is being captured and how it will appear and to whom it will be sent."

As is customary, the Supreme Court didn't provide a reason for its refusal to hear the appeal.

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