Judge mulls over Facebook's offer in 'sponsored stories' suit

The social network's second attempt at settling the lawsuit over a feature that publicized users' "likes" without permission or compensation may be ruled on "very shortly."

Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
Dara Kerr
2 min read

It looks like Judge Richard Seeborg may be turning a corner in the lawsuit over Facebook's "sponsored stories" feature. He said today that he would review the social network's second settlement offer and would issue a ruling "very shortly," according to Reuters.

The crux of the case focuses on Facebook's use of advertising in its sponsored stories. The original five plaintiffs, which aimed at representing more than 100 million members in a class-action suit, claimed the social network violated users' right to privacy by publicizing their "likes" in advertisements without asking them or compensating them.

At the time the legal complaint was filed, Facebook's sponsored stories ads displayed a user's name, picture, and a tagline asserting that the person "likes" a particular advertiser. These particular ads initially appeared only in Facebook's right column, but then the social network moved them directly into users' news feeds, identifying them as "sponsored" stories.

The suit was originally filed last year and has since had its fair share of drama. Initially, Facebook asked to have the case thrown out, but the judge denied that request. Then, after a first settlement was reached in May, U.S. District Court Judge Lucy Koh backed out of the case. When Seeborg later reviewed the settlement, which was a $20 million deal with Facebook giving $10 million to charity and paying $10 million for legal fees, he said that it didn't "make any sense" and ultimately rejected it.

Finally, last month, Facebook brought a new settlement offer to the table. It proposed giving $10 apiece to impacted consumers and setting up a way for users to see how advertisers may have featured them in sponsored stories. Additionally, parents of Facebook users who are under the age of 18 can opt their children out of the program. Any extra money after the cash payment would go to charity.

Today, Seeborg discussed this new settlement with attorneys from both sides of the case in San Francisco federal court. He also heard from two children's advocacy groups that filed court papers opposing Facebook's settlement offer. According to Reuters, Seeborg seemed less critical of the new offer.

The plaintiffs also agreed to the settlement. One of their attorneys, Robert Arns, told Reuters, "We believe we cracked the code so that it's fair."

However, the two children's advocacy groups don't think the settlement goes far enough. They said that rather than an opt-out feature for ads using content from children under the age of 18, there should be an opt-in feature. This way the burden of responsibility is lifted from the parents.

Seeborg said that he will consider these objections, according to the San Jose Mercury News. If Seeborg grants a preliminary approval of Facebook's settlement, other third-party groups will be able to support or oppose the offer before a final hearing takes place.

A Facebook spokesperson told CNET that the company is declining to comment on the lawsuit at this time.