Facebook's Sponsored Stories feature personal content
In early 2011, Facebook launched "Sponsored Stories", an advertising product that used content from members' posts inside ads displayed on the service. Drawing on Likes, check-ins, and comments, a Sponsored Story might use a member's photograph and their comments from a coffee shop to create an ad that would then be displayed alongside other ads. Users were provided no ability to opt out. Among the inaugural advertisers was Coca-Cola, and Starbucks featured in a marketing video Facebook made to demonstrate the new service to prospective advertisers. Facebook's engineers saw the service as a way to automate word-of-mouth recommendations, and the company argued that the ads would only be visible to the user's friends, who would see the same content in their news feed anyway.
In April 2011, five plaintiffs sued the company, complaining that Facebook violated California laws prohibiting the use of individuals' likenesses or names in advertisements without their consent. The case concluded in August 2013, costing Facebook $20 million: $9 million was divided among the approximately 614,000 qualified Facebook users who had joined the suit, and $11 million went to pay attorneys, court fees, expenses, and donations to a dozen NGOs that work on privacy issues. These included the Electronic Frontier Foundation and Harvard University's Berkman Center for Internet and Society.
Sponsored Stories was finally shut down in April 2014.
tags: Facebook, Sponsored Stories, advertising, Coca-Cola, lawsuits, settlements
Writer: Laurie Segall, Andrew Couts
Publication: CNN Money, Digital Trends