Privacy Lawyers Sell Out Facebook Users for $10 Million

http://www.wired.com/threatlevel/2012/06/sponsored-stories-accord/

by grellas • 14 years ago

53 31 14 years ago

This is obviously very troubling for Facebook, considering that Sponsored Stories appear to be their main effort to monetize mobile.

It's especially troubling because this is yet another breach of privacy on their part. People liking pages or apps don't expect to be spokespeople for these companies, so showing my name next to an advertisement is disingenuous. It's made even worse that this is opt-out, and my name is displayed on sites other than Facebook[1].

There is going to be hundreds of millions of people who will never even know that they're recommending products to people, and that's bad.

1. http://www.theverge.com/2012/6/22/3110645/facebook-ads-on-zy...

fleitz• 14 years ago

It's not troubling at all, this setting will be buried in the bowels of the privacy page. 1% of users will actually opt-out.

"There is going to be hundreds of millions of people who will never even know that they're recommending products to people, and that's bad."

Why? Exactly what is the moral outrage that when a person 'likes' Starbucks that that information is displayed to their friends? What did they think was going to happen?

extension2• 14 years ago

Since they are not told, in any reasonably accessible way, what is going to happen when they click "like", they have grounds to complain about anything that does.

andrewcooke• 14 years ago

maxko872• 14 years ago

I don't see exactly how this is a violation of privacy, since the same friends that see your advertisements can go to your About page and get that same information from your list of likes.

hackinthebochs4• 14 years ago

There is no privacy violation here. This is simply people looking for reasons to hate facebook grasping at straws. They're using your like to remind your friends that you like this particular company who is doing an advertisement. Seems like a tasteful bit of social proof if you ask me. I'm honestly surprised facebook lost this case. They need a fresh set of lawyers.

tedunangst• 14 years ago

They didn't really lose. Facebook just tossed them some shakedown money to go away.

SoftwareMaven• 14 years ago

The violation of privacy is Facebook reserving the right to use your photo on ads served on sites other than Facebook. Inside of Facebook, it's just creepy.

hackinthebochs4• 14 years ago

Seeing as you're on HN, I'm sure you realize that those facebook widgets that show up on CNN.com are in fact served from facebook owned properties. The domain in the address bar means literally nothing here. The outsize vs inside facebook distinction is meaningless.

goggles99• 14 years ago

Just a guess... Maybe because you have an option to turn that off and this you could not.

maxko872• 14 years ago

I hope that's not true -- if you block a friend from a certain part of your profile, Facebook better make sure that the friend can't see that part of your profile in ads targetting them.

droithomme• 14 years ago

Should also be mentioned this was a class action lawsuit.

I've observed that class action lawsuits usually benefit the defendant greatly in that the nature of class action suits is that they deprive any persons with standing from all future legal actions on a matter. Sometimes they get nothing as part of a settlement, other parts they receive some token coupon that usually has restrictions to make it useless. In no case is the opinion of the members of the class taken into consideration, nor do they have any right to object to settlements, nor are they normally informed of the settlement until after it has taken place.

In effect, it's a similar protection scheme to how Congress passed a law banning the filing of lawsuits against BP in return for them paying a fine for oil spillage that is vastly below the cost of fixing the damage.

Many actions that are labelled as "settlements" or "fines" are actually bribes paid to the legal system in return for total immunity from future lawsuits.

vannevar• 14 years ago

Yes, the fact that class actions are generally opt-out rather than opt-in is a clear indicator which way the benefits really flow.

zeroinfish2• 14 years ago

When you reach a settlement, you are deprived of the right to sue on the same grounds in the future. That is not unique to class actions. Class actions do affect the legal rights of a large number of people at one time, but that's typically necessary in cases where a large number of people suffered a relatively small harm, because otherwise the economics do not justify any individual to bring a suit. In fact, to have a case certified as a class action, you must prove to the judge that the class action format is necessary for plaintiffs to protect their rights.

The judge also has to certify any class action settlement. And any member of the class may file an objection stating that the terms of the settlement are unfair. The judge reviews the objections (including to attorneys fees) and can reject them if the settlement is not reasonable for the class. On top of that, you do have to notify members of the class (by publication if they aren't individually known) of the terms of the settlement and give them instructions for filing objections before the settlement will be approved.

This isn't to say that no class action is ever settled on terms unfair to the class, but there are a lot of protections to prevent that, and overall class actions are a valuable tool to protect consumers. That's why companies are increasingly trying to remove your right to join class actions by hiding terms forbidding it in EULAs and other fine print agreements.

ap22213• 14 years ago

To me, this is one of the more bothersome parts of the modern US legal system. The other one being that most law now is 'case law' and therefore not accessible to the average citizen by reading 'the code'.

Is this clever trick possibly accessible to average citizens, though? Is it possible to, say, all join a massive corp. so that our actions are protected us from lawsuits from corporations?

JoshTriplett• 14 years ago

Another major problem with class action suits: juries, judges, and lawyers do not have any particular immunity to scope insensitivity. A jury can evaluate the harm done to an individual or small group, and often determine a reasonable (or excessive) amount quantifying that harm. However, they cannot easily evaluate the total harm done to a very large group, and select an amount proportional to the actual harm done. Hence the frequent occurrence of class-action lawsuits that result in miniscule payments to each member of the class, after dividing; an $x million payment might have sounded "about right", but not when the class has $y members in it and $x/$y falls several orders of magnitude below the harm done to each member of the class.

I wonder if this problem would improve if judgments always expressed an amount per member of the class, rather than a total amount?

zeroinfish2• 14 years ago

I don't believe scope insensitivity is a major factor in class action awards.

Believe me, class action plaintiff attorneys are not falling victim to any psychological quirk that makes them underestimate what the size of the verdict should be. They get paid based on the size of the verdict and are therefore fully adept at imagining every reason why the verdict should be very large. They make these arguments quite clear to the court, and as you say it's frequently by attempting to couch the verdict in terms of benefit per member of the class.

The real reason for small awards is that most of these large cases end in settlements, not verdicts. And plaintiffs have an incentive to settle for much less than the full value of their claim. This is because there is risk (usually quite a lot) in taking a case to trial, so you must discount your expected verdict by the risk you will lose at trial and get nothing.

In addition, it's very hard to prove damage in class actions. You need to show that all members of the class (or at least large groups) suffered very similar damage. If damages vary by individual, then individual proof is required (this makes sense, part of a case is proving your damages) and you will lose your right to proceed as a class action. If that happens, it's basically like coming away with no money, so plaintiff lawyers can't always claim every dollar that might be on the table. They stick to the claims that they can apply on a class-wide (or close) basis.

Ultimately settlements are about taking a sure deal for less money rather than taking a risk to try to get the full amount you believe you are entitled to. That's the way settlements work, and that's often a good deal for the class.

tgrass• 14 years ago

I just read yesterday that there is a similar process for churches. Churches are automatically exempt from paying taxes because of the first amendment. But if they sign up to be a 501(c)(3), then apparently they still don't have to pay taxes, but are now subject to a whole litany (no pun intended) of laws.

[EDIT] Personally this has resulted in a philosophical challenge because I was under the impression churches were being given a free ride by not paying taxes; this is not the case. They have a constitutional right to not pay taxes.

WiseWeasel2• 14 years ago

This might turn out to be a good way to get free advertising on FaceBook:

1) Register FB account [name]_[company name], with your company's logo, product feature or offer as your profile pic. You'll probably need a bunch of friends for this to work, real or fake.

2) Like every other company in existence, or at least the ones spending money on these sponsored ads.

3) Have your free ads displayed all over FB, sponsored by the company you liked.

micaeked• 14 years ago

3a) to your fake friends

WiseWeasel2• 14 years ago

Well crap, that pretty much ruins my dreams. Back to the drawing board...

New tactic:

1) Be a social butterfly and get as many FB friends as possible.

2) Sell profile pic and public bio placement to a company wanting cheap advertising.

3) Like every company on FB.

dctoedt• 14 years ago

Ten million in legal fees? I wonder what that works out to per hour. Sounds like entrepreneurial lawyering at its "best."

It's hard to dispute, though, that entrepreneurial lawyers like this have sometimes forced socially-beneficial changes. In some of those cases, the changes might never have happened otherwise: Businesses have powerful incentives to focus on short-term profits; in a divided government, our elected- and appointed officials find it difficult to implement reforms of almost any kind. As a result, ginormous legal fees to entrepreneurial lawyers might be the (exorbitant) price we have to pay to have this alternative mechanism for reform.

stretchwithme• 14 years ago

The never-ending class action scam continues. Lawyers find a reason to shake down a company, the company pays them off, the defendants get nothing of value as damages.

How about making lawyers get paid based only on cash paid to defendents?

scam over.

easily addressed ripoffs like this go on for years, as the people we elect continue to ignore our interests.

idiot_• 14 years ago

Class actions are not about rounding up plaintiffs so you can shakedown BigCorp. That's only what enterprising American lawyers have made them. And that's what the public sees. Class actions are supposed to be about jusdicial efficiency. If enough plaintiffs all file suits with the same claims in the same court against BigCorp, the court is going likely to refuse to hear each one individually. Too much work. Courts are staffed by people who are lazy just like you and me. In nerd speak, developers do not keep answering the same questions again and again. They create FAQ's. The court will be more receptive to all these repetitive suits against BigCorp if the suits are filed as one: a class action. The court hears one case, and reduces its workload.

Given that we now have the means to easily coordinate group action via internet, e.g. group buying, crowd sourcing, etc., what's to stop people from coordinating group litigation. If enough people invidually file suits against Facebook with the same court, it leaves that court little choice but to encourage a class action. Companies like Microsoft can make you agree not to join a class action, but they can't stop you from filing a suit on your own for any and every claim. And if enough customers file the same suit in the same court, a class action may well be the result, even though the customers never sought to join one. And that's because class actions are not about shaking down BigCorp by rounding up plaintiffs. They are about reducing the workload of the court and the expense of hearing numerous suits all with the same claims and facts.

If a large contigent of Facebook users all resolved to sue Facebook at the same time in the same jurisdiction, _individually_, the results could be very interesting.

Privacy Lawyers Sell Out Facebook Users for $10 Million

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