Here’s an update on the Facebook settlement I wrote about before.  Very briefly, this is a class action suit brought on behalf of Facebook users who  had their Facebook profile photos used in Facebook’s “Sponsored Stories” feature.  The users alleged Facebook had violated their privacy by doing so since users didn’t know that their photos would be used this way and/or hadn’t given permission for Facebook to do so.  A Facebook user could become a public spokesperson for some company by having “liked” it — and this could happen just by, for example, getting some discount coupons.

The settlement reached would have provided a total of $20 million to be paid by Facebook — $10 million going to the attorneys for the class action plaintiffs and another $10 million going to charity (several advocacy and non-profit organizations).  In addition to the $20 million, Facebook had agreed to change its terms of service so adult Facebook users would be getting the right to “limit” how Facebook uses their faces in the “Sponsored Stories” feature while minors using Facebook could opt out completely.  Facebook would also, under the revised terms of service, have to inform Facebook users about the revised terms of service.

David Kravets does an excellent job of summarizing U.S. District Court Judge Richard Seeborg’s Friday (August 18th) decision (www.wired.com; “Judge Rejects Facebook ‘Sponsored Stories’ Lawsuit Settlement).  As Mr. Kravets reports, Judge Seeborg rejected the proposed settlement and wants more information about how the $20 million figure was reached.  He specifically wants the parties to explain how and why it was decided that the charity portion would be $10 million — why not, he posed $100 million?  Mr. Kravets reports that the Judge is concerned whether the Facebook class action members whose faces have already appeared in ‘Sponsored Stories” are being represented as fully as possible by their attorneys.

Judge Seeborg’s decision didn’t address the issues about the proposed changes in Facebook’s terms of services.  Also, if the Judge had approved the settlement, U.S-based Facebook users would have to be given notice about their options, i.e., to join as a member of the class action; to opt out of the class; and if they joined the class, to object to the terms of the proposed settlement.

So this case is not settled yet.  I’ll keep you posted and I urge Facebook users to keep an eye out for any emails you might be getting about the case.