Thanks, lawsuit: Facebook forced to let users opt out of ‘Sponsored Story’ ads

Facebook to let users opt out of 'Sponsored Story' ads

It just got more difficult for Facebook to make money off of you. As part of a lawsuit settlement, Facebook will soon allow users to better control how their personal information, including names and photos, is used in individual “Sponsored Story” advertisements, reports Reuters. Parents of users under 18-years-old will also soon have the ability to approve or deny the use of their children’s names in Sponsored Stories.

“Facebook will create an easily accessible mechanism that enables users to view the subset of their interactions and other content that have been displayed in Sponsored Stories,” wrote Facebook in the settlement proposal (embedded in full below). “Facebook will further engineer settings to enable users, upon viewing the interactions and other content that have been used in Sponsored Stories, to control which of these interactions and other content are eligible to appear in additional Sponsored Stories. Without limiting the foregoing, but for the sake of clarity, these settings will include the ability to enable users to prevent individual interactions and other content (or categories of interactions and other content) from appearing in additional Sponsored Stories.

The settlement stops short of altogether banning Sponsored Stories, which Facebook CEO and co-founder Mark Zuckerberg is quoted in the court documents as calling the “holy grail” of advertising thanks to their effectiveness. Nor will the social network provide a single on-off switch for ads.

The settlement finalizes a lawsuit, brought fourth by five Facebook users for the social network’s use of their names and photos in Sponsored Stories without their consent, and without being paid for the endorsement.

In addition to adding granular controls for Sponsored Story ads, Facebook has also agreed to pay $10 million to a number of organizations that educate Web users about how to use social networks safely. Those organizations include the Electronic Frontier Foundation, and the Center for Internet and Society at Stanford Law School.

Facebook says that the combined costs of the settlement, including the $10 million payout, another $10 million in plaintiff legal fees, and the lost revenue from users opting out of Sponsored Stories clocks in at around $103 million. The opt-out features could also hamper Facebook’s attempts to quickly bolster ad revenue.

Facebook Class Action Settlement