Consumers have long been aware that celebrity endorsements mean less than nothing. But what about endorsements from "friends" and other non-celebrities? Are they any more valid?
Not according to 600,000 people featured in "sponsored story" ads on Facebook. They're not contesting the validity of the endorsements, mind you, just complaining that they didn't get paid and didn't give their permission to allow the use of their images.
Facebook is proposing to pay each of the unwitting endorsers a big $10, an amount it says should be considered a "windfall."
“They paid Facebook no money at all and suffered no actual economic damages, much less injury. Yet they are being paid an amount that far exceeds any profit Facebook allegedly earned by using their names and likenesses,” the company says in a motion asking U.S. District Court Judge Richard Seeborg in the Northern District of California to approve the settlement.
Facebook says the settlement is “fair, reasonable, and adequate and should be finally approved.”
The class action lawsuit alleges that Facebook violated a California law that says companies need people's permission before using their names or images in ads. In the case of minors, companies need parental consent.
The agreement proposes to take care of that little problem by amending Facebook's terms of service to provide that users give permission for their names and photos to be shown in ads when they sign up to use Facebook.
What about children?
Nobody, except maybe Facebook, is very enthused about the settlement and consumers' groups are downright upset about a provision that would let Facebook use children's photos as long as users under 18 said that one of their parents approved.
Public Citizen has objected to that provision, saying that Facebook shouldn't be permitted to use children's names in ads, even if they can opt out, without more proof that their parents have consented.
Public Citizen argues that the deal effectively authorizes Facebook to continue using minors' names and images in ads without parental permission -- despite the fact that seven states explicitly prohibit companies from doing so.
“The proposed settlement authorizes Facebook to violate the law of at least seven states,” the advocacy organization argued in recent court papers.