Facebook class-action suit is real

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Facebook users in the Pittsburgh region and across the country -- used to scams promising free money -- have been ignoring or even deleting emails telling them that they might be in line to earn a little cash as part of a class-action lawsuit settlement.

The settlement and the $20 million involved are real -- but the social media site has so many users who could qualify for a piece of the sum that there's a chance few Facebook users will get anything. Even in the best possible scenario, participants can't collect more than $10 each.

If getting rich isn't the end result, becoming more aware of the realities of the social media business might be, said Rick Gardinier, senior vice president and chief digital officer for Downtown ad agency Brunner.

"This settlement -- it's one more thing to sort of raise awareness," he said Tuesday.

He doesn't think Facebook will stop using information posted by its users to attract advertisers. But he thinks consumers are going to become more educated about what they're agreeing to by using services such as Instagram, Twitter and Facebook. "For those networks to exist long-term, they need to make money."

The hard-won skepticism that Internet users long ago adopted has been fully in play as Facebook goes through publicizing the settlement in a case called Fraley v. Facebook Inc., filed in the U.S. District Court, Northern District of California. That suit argued "sponsored stories" were actually ads that used members' names and likenesses to sell products without their consent, according to the settlement.

Facebook denies any wrongdoing, saying it agreed to the settlement to avoid the cost of a trial.

In response to a post on the Post-Gazette's own Facebook page about the settlement, numerous users asked if the email about the case was a scam. Many others said they hadn't been aware their information might have been used for marketing purposes.

Cranberry resident Stephanie Stroud was alert to the technique and had noticed postings on her Facebook page where someone "liked" a company and the posting was described as "sponsored." While she thought it was a great marketing tool, she said in an email that she hadn't realized Facebook was allowing such posts without the users' consent.

Dean Chudicek, in Knoxville, Tenn., said wasn't bothered by the technique -- since he can't figure out why Facebook would want to use his name in any type of advertising. Still, he was glad someone decided to take the issue to court.

"Because now Facebook has to pay up, some good may come of that and, more importantly to some, Facebook has to be more careful about how they use their users' info," he wrote in an email.

Under the settlement terms described online at www.fraleyfacebooksettlement.com, those who could participate in the settlement include anyone in the U.S. who has had a Facebook account and had "names, nicknames, pseudonyms, profile pictures, photographs, likenesses or identities" displayed in a sponsored story before Dec. 3, 2012. The deadline for filing to participate or opt out is May 2, and a court hearing in San Francisco is scheduled for late June.

If too many people file to get money and the amount per person gets too low, the funds could all be paid to nonprofits instead. Attorney fees also have to be considered.

Facebook agreed, as part of the deal, to better explain the system and make it possible for people to keep some things from being displayed in sponsored stories.

As for those doing the sponsoring, Mr. Gardinier expects his agency will continue to recommend some clients include such tools as part of their marketing effort. "It does work," he said. "We do see results."

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Teresa F. Lindeman: tlindeman@post-gazette.com or at 412-263-2018.


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