Facebook Out $10m in Settlement Over User-Using "Sponsored Stories"

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Now that Facebook's a public company, it's obliged to start making some money for its investors. One of the more recent money-making schemes landed Facebook in hot water with its actual users, however: the introduction of "Sponsored stories." Sponsored stories let advertisers buy a spot in your news feed by having Facebook highlight friends of yours that have Liked the company buying the ads.

Five users found the practice so distasteful that they filed a proposed class-action lawsuit against the social giant, but it was revealed over the weekend that Facebook settled the case in exchange for a $10 million donation to charity. The actual settlement took place last month.

Sponsored stories place your name and profile picture next to a message that says you Like the particular product being pushed, along with a link to the company.  Aside from a small bit of "Sponsored" text in the footer of the post, there's no indication that it's an ad -- and there's no way for users to opt out of being included in the program.

The case was filed in California. Reuters reports that the judge presiding over the proposal had previously noted that "California has long recognized a right to protect one's name and likeness against appropriation by others for their advantage," so settling was probably a smart move on Facebook's part.

However, while the $10 million charitable donation is sure to bring a smile to the people being helped by it, the settlement also means that your smiling face can continue being used to advertise the brands you Like. What are your feelings towards sponsored stories?


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