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$10 For Your Trouble: Facebook Reaches Sponsored Stories Deal

By Robyn Hagan Cain on October 09, 2012 | Last updated on March 21, 2019

If your name and likeness avatar are used to promote a business, you deserve to be paid. Kind of.

Facebook found itself in trouble last year after California users complained that their images were being used to promote products without their permission through 'Sponsored Stories’ posts. The users sued the social network, arguing that using a person's image to promote a product without the person's consent violates California's right of publicity laws.

Facebook has been trying to settle the case for months, but U.S. District Judge Richard Seeborg rejected the initial settlement agreement for attorneys fees and $10 million in cy pres. Over the weekend, lawyers filed a $20 million revised settlement agreement.

But the new agreement doesn't sound much better than the original.

As FindLaw's Courtside explains, "When a Facebook user 'likes' a product or company, or posts something related to a product or company, Facebook will sometimes present those likes or posts to other users in that person's network as a paid promotion for the product or company." Facebook COO Sheryl Sandberg has stated that friend-endorsed "stories" are worth two to three times the value of a non-endorsed ad on Facebook.

Considering the value of these promotions, it wasn't surprising that Judge Seeborg thought that plaintiffs deserved a piece of the Facebook settlement pie. The new agreement, however, only offers nominal damages: Up to $10 per plaintiff. Since the proposed settlement covers an estimated 125 million people, awarded damages could be less than 2 cents per class member, Reuters reports.

Practically speaking, the $20 million settlement could still end up going to charity. The new agreement states that the entire amount can go to charity if it's not economically feasible to pay all of the users a cut, according to Reuters.

The new settlement would also allow Facebook to object to plaintiffs lawyers' fee applications.

While the settlement would offer users more control over how their names and images are used, do you think it will be enough to satisfy Judge Seeborg?

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