Facebook ordered to pay $2 million to users it placed unauthorized ads

Published On: Tuesday, December 25, 2012 7:40 AM
By: Sarah Weiss

Unauthorized Facebook ad

Facebook was ordered to pay a whopping $10 million to settle a lawsuit accusing the site of violating the rights of users to control the use of their own names, photos, images and likenesses, according to court documents.

The lawsuit, filed by five members of Facebook in California, argues that the social networking site violated state law by publishing the users 'likes' for certain advertisers in its role as "sponsored stories without paying them or giving them a way to opt out the documents said.

This court resolution could allow millions of other Facebook users to take similar legal action.

A "sponsored story" is an ad that appears on a user's page on Facebook and usually consists of the name of another friend, the image and the statement that "likes" the person with the advertiser.

The lawsuit accuses Facebook terms of use "tricks users into thinking they can prohibit the use of their name and profile picture in the ads.

The agreement puts a question mark on a major source of advertising revenue for the company.
Facebook declined to comment on the court ruling.