Facebook Settles Claim In "Sponsored Stories" Lawsuit

Facebook appears to be in the media for all the wrong reasons recently, and whilst there was some good news (Zuckerberg got hitched plus a new Timeline redesign) for the social network, such events have been blighted upon reports of the company's lead underwriter being hit with a subpoena. So, in keeping with the legal theme, the latest revelation from the Menlo Park headquarters is the news of Facebook settling a lawsuit over its "Sponsored Stories" feature - after it emerged that the site violated users' rights by publicising their "Likes" without their permission.

According to the lawsuit filed in a San Jose court yesterday, this incident could have affected nearly one of every three Americans, along with billions of dollars worth of damages. The social network was accused of appropriating the identities of its users to advertise products without their consent.

The complaint states that whenever a user "Likes" or uses the Facebook check-in option or plays a game integrated into the social network, the activity can result in the user's profile information "appearing as an endorsement in a paid advertisement".

In addition, the lawsuit refers to remarks from chief operating officer Sheryl Sandberg, in that the value of a "Sponsored Story" ad can be worth at least twice and up to three times the value of a standard Facebook.com advert without a friend's referral.

Both parties have yet to make any comments on the matter.

Source: Bloomberg