Don’t forget to read the fine print – proposed changes to Facebook’s policies as a result of $20million class settlement

Fancy yourself as the face of a major brand? Facebook’s proposed refresh of its advertising and data use policy (as a result of a $20million class action settlement) means your big break might be just around the corner.  However, the catch is, you won’t be paid for it, nor be aware of what you are endorsing.

These issues are what concerned the plaintiffs in the class action against Facebook, when they realised that Facebook was putting users’ names and faces in “Sponsored Story” ads without their permission.  Ultimately, a settlement was reached in which the US District Court of Northern California ordered Facebook to pay $20 million.

So what is a “Sponsored Story” and could you be in one?  Sponsored Stories are essentially paid advertisements.  Facebook members’ actions, such as “liking” a particular product, are turned into what appears to be a personally endorsed advertisement on their friends’ Facebook pages.  Often members are unaware that “Likes” are being used by Facebook as an endorsement of those advertisers, products, services or brands in a manner solely determined by Facebook and for which Facebook is paid for.

The Class alleged two key issues:

  • lack of consent, including lack of consent of parents where minors were involved; and
  • that Facebook engaged in misleading and deceptive business practices.

The Facebook terms of use, set out primarily in the Statement of Rights and Responsibilities (SRR), were argued to have misled members into believing that they could control the use of their name and pictures in advertising. In fact, said the Class, there is no way of preventing a Sponsored Story from featuring a member.

Amongst other things, the Class complained about the nature of the unique language used by Facebook, for example, Facebook “News”, Facebook “Stories”, Facebook “Likes” and Facebook “Sponsor”, all of which have a different meaning to the ordinary English Dictionary.  The Class criticised the lack of express consent to the Terms of Use and notification to members when changes are introduced. The Plaintiffs’ Second Amended Class Action Complaint for Damages can be found here, and Facebook’s Answer can be found here.

The fact this matter has settled means that limits of social media terms of use and enforceability of automatic user consent have again gone untested by the Court.  However, as part of the settlement Facebook is required to make changes to the SRR to address some of the issues raised and to implement additional mechanisms to give users greater information and control.

The proposed changes to the SRR can be found here, and the proposed changes to the Data Use Policy can be found here.  The amendments were open for user comment until 7 September 2013 and Facebook has indicated it will provide an update shortly.  Reports suggest that the Federal Trade Commission (FTC) is now investigating Facebook’s proposed changes to ensure the revisions comply with a 2011 settlement that Facebook made with the FTC in which it agreed to get explicit approval from users before changing its privacy controls.

Whilst Facebook contends that it was always clear in its policies, Part 10 of the proposed SRR has been amended to provide “further clarification” on Sponsored Stories, which are here to stay (whether you like it or not):

You give us permission to use your name, profile picture, content and information in connection with commercial, sponsored, or related content (such as a brand you like) served or enhanced by us.  This means, for example, that you permit a business or other entity to pay us to display your name and/or profile picture with your content or information, without any compensation to you.”

In response to the issue of gaining consent from minors highlighted by the class action, Part 10 also notes:

If you are under the age of eighteen (18), or under any other applicable age of majority, you represent that at least one of your parents of legal guardians has also agreed to the terms of this section (and of the use of your name, profile picture, content, and information) of your behalf.”

[Eds: We query how many minors are likely to read all the way through to Part 10 of the SRR, let alone invite a parent or guardian to peek over their shoulder to read and agree to a certain aspect of the terms!]

Facebook has also clarified other aspects of its activities, identifying how privacy settings can be individually tailored.  So whilst you may not be able to prevent your guest appearance on a Sponsored Story, you may be able to limit your fame by being aware of some other developments by Facebook:

  • The use of facial recognition software that uses an algorithm to calculate a unique number, also called a “template”, based on someone’s facial features.  These templates are used to provide “tagging” suggestions, and are only created from photos you have been tagged in.  However, if you un-tag yourself from a photo this photo cannot be used to create a template.  Therefore to avoid the facial recognition software you will have to un-tag yourself from all photos.
  • A new feature is being introduced called “Graph Search” which allows users to search general topics across Facebook.  Facebook gives the example that if you search for “Photos of Tokyo” you will be able to see photos your friends have taken in Tokyo (if their privacy settings allow), as well as all Public photos in relation to Tokyo.  This is a default feature and Facebook has explicitly noted that the availability of your material to others depends on how it categorised in your privacy settings.

So if you are reconsidering your fame and fortune on Facebook make sure you read the fine print. By using Facebook, you agree to the SRR.  Further, if the terms are updated, your continued use of Facebook constitutes acceptance any amendments.