Friday, July 20, 2012

Some Tidbits Buried in the Facebook Class Action Settlement

Facebook has recently agreed to settle a class action alleging that Facebook users' likenesses and names were used in connection with the site's Sponsored Stories ad program, without obtaining the users' prior consent.  No money will be paid to Facebook users as a result of the settlement because, as the papers filed in support of settlement attest, Facebook made almost no money per capita on the sponsored stories program and, thus, it makes no economic sense to distribute such minimal amounts to class members.  My takeaway from the case:  Facebook is really skirting the privacy line to extract minimal revenues from each of its users.  Of course, Sponsored Stories is only one program and, if you have enough users, even miminal revenue from each adds up.  Still, if Facebook is willing to risk alienating its users in this rather overt way to increase revenues, this suggests some desperation on the company's part.  Here is a link to a Wired article which discusses the settlement and links to a copy of the papers filed in support of the settlement, should you care to delve deeper.

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