Sponsored Stories

This guy deserves way more than $10.

A good chunk of America was Googling “class action” this weekend thanks to Facebook. Millions of the site’s users received an email in the last few days with the subject “Re: LEGAL NOTICE OF SETTLEMENT OF CLASS ACTION.” Those that didn’t immediately delete it as spam discovered they’re entitled to up to $10 from the social networking giant for putting them in “Sponsored Story” ads. That’s when Facebook takes something you Liked or a link you posted and uses it in an ad aimed at your friends. (So, word to the wise, never ever post a link on Facebook to a 55-gallon gallon drum of sex lube.)

Fraley v. Facebook, the class action lawsuit that could make a bunch of Facebook users a little richer and a bunch of class action lawyers (led by Robert Arns) a lot richer, was filed in California in 2011 by an enterprising group of plaintiffs led by seamstress Angel Fraley, shortly after “Sponsored Stories” launched. They claimed the company had violated the law by using their names and likenesses in ads without their permission and without paying them. (Lead plaintiff Fraley later dropped out of the suit citing Facebook lawyers’ aggressive tactics, which basically consisted of digging up embarrassing material about her from her profile page.)

Facebook and the plaintiffs settled the suit in December to the tune of $20 million. That $20 million is covering the class action lawyers’ fees ($7.5 million plus expenses), with the rest either being divvied up among approximately 125 million presumably-aggrieved Facebook users who appeared in Sponsored Stories ads, or, if the demand is too great, divided by a bunch of non-profits that work on privacy issues. If the amount of money divided by the number of claimants comes out to less than $4.99 each, the money goes to the non-profits, who surely must be in the midst of planning a major “Rock The Claim” campaign. Unfortunately, I can’t help out.

Continue reading at Forbes….