Consumer News

Facebook Privacy Settlement Terms in Dispute

FTC reviewing changes to policy on ads featuring users.

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Consumer News

Facebook Privacy Settlement Terms in Dispute

Who’s confused? Raise your hand.  Will you or won’t you be in an ad on Facebook if you “like” something on the social media site, and how much control do you have over it?

If you’re a Facebook user, you recently received a message from the A website that allows you to build a profile and connect with others explaining that it had changed its policies regarding sponsored stories as a result of a recent legal settlement. In a summary of the changes, Facebook said:

As part of this proposed update, we revised our explanation of how things like your name, profile picture and content may be used in connection with ads or commercial content to make it clear that you are granting Facebook permission for this use when you use our services.

In August, a federal judge signed off on a 2011 class-action lawsuit settlement that prompted this change. The lawsuit was filed in California by five users who said Facebook shared their “likes’’ of certain advertisers without their consent in the form of “Sponsored Stories’’ in which their names and photos are used to endorse products.

Under the settlement terms, Facebook can still post users’ content as part of ads but the company said it is giving users more control over how this will be done.

The company also added a provision stating that users who are minors “must represent that a parent or guardian has consented to this section of our terms, on their behalf.” 

So what does that all mean?

What controls do users now have that they didn’t have before? That’s hard to determine.  In fact, it takes several click throughs on the Facebook ad guidelines pages to get to an explanation of how the social networking site uses your content. One page explains:

Facebook sometimes pairs ads with news about actions you and your friends have taken, such as liking the same Page. When advertisers pay to sponsor activity, their goal is to make sure that more of the people you’re already sharing with see the activity in News Feed. For example, if your privacy settings allow your friends to see when you’ve liked a Page, an advertiser may pay to make sure more of your friends see when you’ve liked its Page.

If you want to investigate further, Facebook also states that users can view how their names and photos were used in any sponsored posts and that users can have some say in how their information is used in future ones.

Privacy advocates immediately criticized the settlement, however, saying it didn’t go far enough to protect users, especially users who are minors. The new policies basically tell users that they have to give Facebook permission to use their information in advertising in order to  join Facebook. Thus, say advocates, users don’t have much say at all. And children have to opt out if they don’t want to be used in Facebook’s sponsored stories, instead of automatically being excluded, as some advocates had wanted.

Legal settlement at odds with FTC order?

Not only do advocates say the settlement didn’t go far enough, they also said the changes Facebook posted as a result violate a 2011 FTC order. In a Sept. 4 letter to the FTC, six consumer watchdog groups said the class-action settlement was flawed and violated the FTC order in several ways, including its prohibition on Facebook sharing information without users’ consent. Said the letter:

Consumer privacy groups have worked diligently to preserve this right and to protect the interests of Facebook users. Now it is up to the FTC based on the Order that is already in place.

Facebook said in a statement reported in The New York Times Thursday that it informed the FTC of its changes before posting them.

The FTC said it is looking into the matter:

We are reviewing the proposed changes, and have not yet made a determination as to whether they would violate the Order.

What happens if the Facebook settlement – which was approved by a federal judge – is indeed in violation of the FTC order? It may be an issue the FTC has never encountered before, but the agency can still enforce the terms of its 2011 order.

Now what?

So what’s the takeaway? What does it all mean for Facebook users?

It means you may be getting another notice from Facebook about its privacy policies regarding advertisements if the FTC finds the changes violates its order. Until then, if you use Facebook, you should realize you might again be starring in an ad on the site.

UPDATE 2/13/2014: Public Citizen filed a brief contesting the settlement, saying that it violates the law in seven states by allowing Facebook to use children’s images in ads without explicit permission from their parents. Another consumer group, CCFC, which was to receive $290,000 from the settlement, has backed away from supporting it. CCFC rejected the money and filed a letter with the court Feb. 12 urging it to reject the settlement. Class members have also filed an appeal of the settlement.


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