May 24th, 2012

Facebook Settles Claims in Lawsuit Over ‘Sponsored Stories’

By Joel Rosenblatt
Bloomberg News

Facebook Inc. (FB) settled a lawsuit “in principle” over claims that it used information supplied by users of the social networking website to advertise products without consent.

The judge in the case was notified of the accord yesterday and it was memorialized today, according to a filing in federal court in San Jose, California. Terms of the agreement weren’t disclosed in the filing.

Facebook was accused in the complaint, which was moved last year to federal court from state court, of appropriating the names, photographs and identities of users to advertise products without their permission. The company’s “sponsored stories” were a “misleading advertising scheme” using material posted by Facebook members on their profile pages, according to the complaint.

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