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Facebook settle 'Sponsored Stories' lawsuit; over £6 million going to charity

It's every Facebook user's worst nightmare: you make a joke about Viagra, another adult-related product, or even just some generic product or service that you don't necessarily want the entire world to know that you buy or use. Then, without your knowledge, your picture starts appearing next to thumbnails within Facebook's "Sponsored Stories" sidebar, implying that you have an interest in said product or service, or would wholeheartedly recommend it to your friends.

Facebook settled a lawsuit regarding this exact practice back in late May - an affair brought forth in a San Jose, California federal court that had the potential to cost Facebook billions if the plaintiffs gained class-action status and ultimately prevailed. However, the details of Facebook's settlement weren't made public until this weekend: £6.4 million ($10 million) will be paid out, with the money going to charity and not the aggrieved social networkers.

"California has long recognised a right to protect one's name and likeness against appropriation by others for their advantage," wrote US District Judge Lucy Koh, as reported by Reuters.

Previous court documents make mention of the potential size the lawsuit could have achieved if it became a full, class-action issue: one in three Americans, which could have ended up costing Facebook a princely sum of money if it lost the suit.

Perhaps the most well-known tale to come from Facebook's "Sponsored Stories" is the fun problem that befell Nick Bergus, whose problems with the advertising technique began when he posted a link to a 55-gallon drum of "Passion Natural Water-Based Lubricant" on his Facebook wall. Funny stuff, right?

What wasn't as funny is when Facebook's algorithms picked up Bergus' alleged "interest" in the product and began running sponsored advertisements for the (immense amount of) lubricant - featuring his picture front-and-center.

"Other people start reporting that they're seeing it, too. A fellow roller derby referee. A former employee of a magazine I still write for. My co-worker's wife. They're not seeing it just once, but regularly. Said one friend: 'It has shown up as one on mine every single time I log in,'" Bergus wrote on his website.

According to Facebook CEO Sheryl Sandberg, the inherent value of a "Sponsored Story," or an advertisement based on a friend's personal "experience" with a product or service, is worth two to three times that of a conventional advertisement.

Except, of course, if you're just joking around.