Through a program that Facebook called “Sponsored Stories,” Facebook was using the images of millions of users, without their knowledge or consent, to sell advertising. Whenever a user clicked the “Like” button, Facebook could use that interaction to create an advertisement that was then broadcast to that user’s “Friends” on Facebook—turning those users into spokespeople for Facebook advertisers.
In March 2011, Facebook was sued over the “Sponsored Stories” program, in a class action lawsuit alleging that it was unlawful to use people’s names and photos for advertising without their consent. The plaintiff class and Facebook proposed a settlement, which required court approval. Under the settlement, Facebook proposed to pay an amount equal to $10 per class member (later raised to $15), although each person’s claim is worth $750 under state law. The settlement provided that Facebook would create a mechanism for users to opt out of Sponsored Stories, but the opt-out right was limited in key respects, and Facebook agreed to abide by opt-out preferences for only two years. Although the settlement required Facebook to implement “parental controls” applicable to limited situations, the settlement allowed Facebook to continue to use most of minor users’ likenesses without their parents’ consent, in violation of state privacy laws in California, Florida, New York, Oklahoma, Tennessee, Virginia, and Wisconsin.
In May 2013, Public Citizen objected to the settlement on behalf of a group of six parents from California, New York, Tennessee, and Virginia who did not want their teenage children’s names and images to be used without parental consent. The objection argued that the court should not approve a settlement that permits the violation of state law. The objectors also argued that the terms of the settlement are unfair because the monetary compensation is minimal, and because the policy changes are inadequate and time-limited. The district court approved the settlement in August 2013, and Public Citizen appealed on behalf of five of the six objecting parents.
Meanwhile, class counsel asked the district court to require each of the objectors to put up a $32,000 bond as a condition of pursuing their appeals. Class counsel argued that if objectors lose the appeal, they would be responsible for “administrative costs” associated with delaying the implementation of the settlement. Public Citizen opposed the bond, arguing that there is no basis in rule or statute for imposing such costs on unsuccessful objector-appellants and that the district court should not permit the use of an appeal bond to deter legitimate objectors from seeking appellate review. On June 30, 2014, the district court agreed with Public Citizen that objectors could not be required to pay administrative costs and therefore denied the motion to impose a bond.
In January 2016, the court affirmed the approval of the settlement.