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Angry Parents Seek To Kill $20 Million Facebook “Sponsored Stories” Settlement
Last August Facebook settled a class action lawsuit for $20 million. The suit claimed “Sponsored Stores” ads misappropriated Facebook users’ likenesses without consent. The company has decided to “sunset” Sponsored Stores but will continue to display ads that utilize member images and Likes.
The settlement was approved over a number of objections arguing that minors’ privacy rights were not sufficiently protected under its terms. Child advocates had wanted explicit opt-in parental consent before minors’ images/Likes could be used in ads. The settlement contained mechanisms to solicit parental approval but they were not as strong as some wanted.
Advocacy group Public Citizen (representing a number of parents) has now filed an appeal in the Ninth Circuit Court of Appeals asking that the settlement be voided and overturned. The key claim is that “the settlement authorizes Facebook to continue to use minors’ images for advertising without parental consent — in direct violation of the laws of seven states . . .” As a practical matter it essentially comes down to opt-in vs. opt-out.
The seven states requiring explicit parental consent for the use of a minor’s likeness for commercial purposes are California, Florida, New York, Oklahoma, Tennessee, Virginia, and Wisconsin. Several of these states allow for civil penalties for violations.
The appellate brief (embedded below) argues:
The settlement agreement limits the blanket consent it purports to extract from minors in only two ways. First, under the settlement, Facebook agrees to “encourage” new users to identify family members in their Facebook accounts . . . When a minor child and a parent who are both Facebook users both confirm their relationship, Facebook will allow the parent to block the use of the minor child’s name or likeness in Sponsored Stories . . . Facebook will also “enable” a minor user to indicate that his or her parents are not Facebook users, in which case Facebook will not use that minor’s name or likeness in Sponsored Stories until the minor reaches age 18, the minor indicates that his or her parents are on Facebook, or a confirmed parental relationship with the minor is established.
Public Citizen and appellants argue that “using a minor’s image based on the minor’s representation that a parent has consented is not the same as actually obtaining the parent’s consent; on the contrary, it effectively dispenses with parental consent requirements by permitting a minor unilaterally to consent to the use of his or her image.”
The brief also argues that the post-settlement system being implemented by Facebook allows it to infer parental consent and/or relies on parents opting-out, rather than gaining their explicit opt-in approval. Beyond this there are also a range of technical-legal jurisdictional and conflict of laws arguments that assert the trial court disregarded the laws of all the implicated states other than California.
It’s challenging to speculate about the prospects for the appeal, which may determined by some of these more technical arguments. Alternatively the appellate court might get deeply into the mechanics of the consent process set up under the settlement to see if it does really reflect actual consent vs a kind of inferred or passive consent.