Consumer watchdogs Public Citizen reject Facebook's $20 million court settlement

A consumer watchdog group turned on Facebook Thursday, rejecting a $20 million deal made to settle charges that the social network violated privacy by using "likes" as endorsements for ads.

US-based Public Citizen, which had endorsed the settlement deal announced last year, switched position and filed a brief urging a federal appeals court in San Francisco to toss it.

The group argued that the settlement doesn't compel the social network to change its ways when it comes to using profile images of teenage members in ads without the consent of parents or guardians.

The practice is specifically banned by laws in California and six other US states, according to Public Citizen attorney Scott Michelman.

"The capture and republication of teen postings by Facebook is a pernicious assault on their rights to decide where their messages should go," said Robert Fellmeth, director of the Children's Advocacy Institute at the University of San Diego School of Law, which is representing another challenger to the settlement.

A US judge in August approved the deal in August to make Facebook pay for using members "likes" as endorsements for ads.

The pot of money is to be divvied up among attorneys, Internet privacy rights groups, and Facebook users who filed claims in the class-action lawsuit.

Public Citizen is reportedly in line to receive $290,000 of that Facebook money if the settlement deal survives appeals lodged against it.

Under the terms of the deal, California-based Facebook would to let parents control how their children's likes and posts are used, or not use them by default if children's parents are not on the social network.

- Off-limits by default -

Public Citizen has joined those calling for posts or likes by those younger than 18 years old to be automatically made off-limits for ads.

The judge who signed off on the settlement reasoned that the deal was fair given the challenges of proving Facebook members were financially harmed or that signaling "likes" for products didn't imply consent.

"The court-approved settlement provides substantial benefits to everyone on Facebook, including teens and their parents, and goes beyond what any other company has done to provide consumers visibility into and control over their information in advertising," Facebook spokeswoman Jodi Seth said.

Seth added that the argument that the settlement doesn't jibe with state laws was raised and rejected last year, and that other groups still support the deal.

Facebook has gone public with plans to discontinue its Sponsored Stories advertising program in April.

The company reasoned in court that the practice merely takes information users have already voluntarily disclosed to their "friends," and sometimes redisplays it to the same persons, in a column that also contains more traditional paid advertising.

The lawsuit was filed in early 2011 after Facebook launched the advertising program.

[Image via Agence France-Presse]