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Facebook will pay $10 million to charity to settle suit

Case centered on users’ rights to control accounts

Facebook Inc. has agreed to fork over $10 million to charity to settle a suit involving its users’ rights to control certain aspects of their accounts, specifically their names, photographs and likenesses.

Five Facebook users brought the lawsuit, claiming the site violated California law when it publicized their “likes” of advertisers on Facebook’s “Sponsored Stories” section without offering them compensation or an opt-out. The “Sponsored Story” section shows up on Facebook users’ main pages, and displays advertisers and names of friends who “like” them, as well as their profile pictures.

In her decision, U.S. District Judge Lucy Koh said the plaintiffs showed economic injury could occur through Facebook’s misuse of their names, photos and likenesses. "California has long recognized a right to protect one's name and likeness against appropriation by others for their advantage," she wrote.

Facebook reached the agreement, which is known as a cy-pres settlement, with the plaintiffs last month, but it was only recently made public. This type of settlement allows Facebook to pay the agreed-upon funds to charity.

Read Thomson Reuters and the Wall Street Journal law blog for more about this story.


Read more of InsideCounsel’s recent stories about Facebook:

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Cathleen Flahardy

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