SAN FRANCISCO -- Attorneys for Facebook and a group of members who sued the social network urged a federal judge Thursday to accept a negotiated settlement of a class-action dispute over the use of members' names and photos in online advertising despite objections from a public interest group that said the agreement doesn't do enough to protect minors.
A Facebook lawyer said the company has agreed to "unprecedented" measures that will let users control how their names and photos are used in so-called "sponsored stories" advertisements, in which companies pay Facebook to distribute messages to a user's friends when that user clicks the "Like" button or takes
The settlement also sets aside $20 million to compensate millions of members whose names were used in past advertising. It was negotiated with attorneys representing a group of Facebook members who filed a lawsuit complaining that the social network was using their names and photos for commercial benefit without paying them or allowing them to opt out of the program.
Attorneys for those plaintiffs have agreed to the settlement, but the nonprofit Center for Public Interest Law at the University of San Diego filed a separate motion asking U.S. District Judge Richard Seeborg to reject the agreement. They argue that Facebook should be required to get active consent from the parents of
Seeborg said he may consider those objections later, but after hearing briefly from attorneys in court Thursday, he indicated he will rule "very shortly" on whether to grant tentative approval to the settlement.
The case strikes at a central element of Facebook's efforts to build a business in part around advertising that relies on its members' recommendations as a persuasive message.
Earlier this year, Facebook CEO Mark Zuckerberg said the "sponsored stories" program was generating $1 million a day in advertising revenue, with about half of that coming from ads shown to Facebook users on their mobile gadgets.
Facebook executives say the program is especially important to their nascent mobile ad business because it's a way to insert ads directly into the stream of updates that users see on their smartphone screen, rather than interrupting the stream with a traditional display ad.
Contact Brandon Bailey at 408-920-5022; follow him at Twitter.com/BrandonBailey.