updated 06:52 pm EDT, Sat June 23, 2012
Site must give way to not have names, pictures used in ads
Facebook users will soon have the option to decline having their pictures and names used in ads shown to other users on the social network. As The Telegraph reports, the new policy stems from the settlement of a class action lawsuit brought by users alleging the site improperly used their images. The new rules are calculated by some to potentially cost Facebook more than $100 million in lost ad revenues.
Facebook paid out $10 million in the class action settlement. When a user clicked the Like button for a brand or service, Facebook's terms of service previously allowed for that brand to then feature the person's name and picture when marketing to their friends. During the case, Facebook founder Mark Zuckerberg was quoted as saying that referrals from users' friends constituted a "Holy Grail" of social advertising.
In the wake of the settlement, Facebook will now be forced to give users an "easily accessible mechanism" allowing users to see how much of their data is being used in Sponsored Stories and to disallow advertisers from featuring their images and names in such sponsored content.
An economist hired by the plaintiffs estimated that the new policy could cost Facebook as much as $103 million in lost revenue. The recently-settled suit is just one of a number of legal actions facing the world's largest social network. Another suit filed in federal court alleges that Facebook illegally tracks users after they log off of the site and is thus liable for $15 billion in damages. A third suit claims that Facebook gave access to earnings information for only a few favored investors in the run-up to its record-setting initial public offering.