Today Public Citizen filed objections to the proposed class action settlement in Fraley v. Facebook, which concerns Facebook's practice of using the images of their millions of users, without their knowledge or consent, to sell advertising. Specifically, through Facebook's "Sponsored Stories" program, whenever a user clicks the “Like” button, Facebook may use that interaction to create an advertisement that is then broadcast that user’s “Friends” on Facebook –- effectively turning every user into a potential spokesperson on behalf of one of Facebook’s advertisers. Minors are not exempt from the program, even though several state laws prohibit the use of a minor's likeness without parental consent.
In early 2011, the class action complaint was filed (here's the amended complaint) seeking damages under California law for Facebook's practice. Facebook's motion to dismiss based on standing and various other grounds was denied. So far, so good.
But now the plaintiff class and Facebook have proposed to settle the case on terms that are great for Facebook and pretty weak for the 70-million-plus estimated members of the class. Facebook has promised to pay $10 per class member -- a paltry amount as compared with the $750 statutory damages plaintiffs could recover if successful -- and even the $10 payment is unlikely to reach class members because if more than 2% of the class members make claims, the settlement fund does not contain enough money to pay all claims. Meanwhile, the plaintiffs' lawyers stand to receive $7.5 million. Facebook has also promised to create a mechanism for users to opt out of Sponsored Stories, but the opt-out right is limited in key respects -- for instance, it does not appear that users will have the ability to opt-out of all Sponsored Stories on a categorical basis -- and Facebook has agreed to abide by opt-out preferences for only two years. Worst of all, the settlement allows Facebook, in violation of numerous state laws, to continue to use minors’ likenesses without their parents’ consent.
We filed our objections on behalf of several parents and their children, aged 13 to 16, from around the country. The district court will hold a settlement approval hearing on June 28.