The Daily Item, Sunbury, PA

February 9, 2013

Facebook may owe 125M 16 cents

By Joanne Arbogast
The Daily Item

SUNBURY — Are you one of the millions who recently received an email about a “Notice of Pending Class Action and Notice of Proposed Settlement — Angel Fraley vs. Facebook Inc.?”

If you opened it, you read that you may be among those in a lawsuit against Facebook for violating privacy rights and if so, you may be entitled to a piece of any proposed settlement money.

Really?

Yes, really. It sounds like a scam, but it’s not.

Don’t get too excited. If you actually file a claim, you aren’t going to get rich. At the most, you may get up to $10.  

We received a lot of calls and emails from readers wondering about the legitimacy of this notice, most from people who had already deleted it as suspected spam.

In a Jan. 26, 2012, article, Forbes.com reported that “Fraley vs. Facebook” came from Facebook’s decision in 2011 to put users in ’Sponsored Story’ ads based on things users had ’Liked.’ The ads didn’t always reflect the context in which someone ’Liked’ something, as the dude who famously wound up promoting a 55-gallon drum of sexual lubricant last Valentine’s Day can attest, and there was no way of opting out, beyond not Liking anything.“ (Read more about that by going to Forbes.com and search for ”Angel Fraley“).

“Within three months of the announcement, an enterprising group of five plaintiffs led by seamstress Angel Fraley sued Facebook in California saying 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 Facebook account.)”

The suit was revised to award money to Facebook members for using their personal information — for a whopping $20 million. A hearing on the fairness of the deal is coming up on June 28.

So yes, there’s a chance that some of that $20 million could come your way if you appeared in a Facebook Sponsored Story ad and file a claim.

But not so fast. Know that first, court-determined attorneys fees, costs, and class administration costs will be deducted. That will take the remaining money down to around $12 million, to be divided among everyone who files a claim.

So how many people might you have to share that with? Consider this from Social Bakers: “Facebook has nearly 165 million American users; court filings suggest about 125 million of them got this notice. If they all wanted a piece of the full $20 million pie, they’d get 16-cent slices. If more than 4 million people claim their share, that would mean less than $5 each.”

Your odds are getting worse because according to the settlement, if the amount of money divided by the number of claimants is less than $4.99 each, then the money will instead go to a group of 14 nonprofit organizations involved with, and will use the money for, the public good regarding social media education and outreach as it relates to advertising, minors and privacy.

Bottom line: If 3 million people — or just 2.4 percent of those who received the email notice — apply for a piece of that $12 million, it will take the per-person payment below the $4.99-each threshold. Most likely, the nonprofits will be splitting up the $12 million, each getting in the ballpark of $1 million.

But you can think positively — each person who deleted the email notice increases your chances of getting a (tiny) share.



The email that was distributed alerting Facebook users of the lawsuit:

NOTICE OF PENDING CLASS ACTION AND NOTICE OF PROPOSED SETTLEMENT

ANGEL FRALEY V. FACEBOOK, INC.

You are receiving this e-mail because you may have been featured in a “Sponsored Story” on Facebook prior to December 3, 2012.

A federal court authorized this Notice. This is not a solicitation from a lawyer.  

Why did I get this notice? This Notice relates to a proposed settlement (“Settlement”) of a class action lawsuit (“Action”) filed against Facebook relating to a particular Facebook feature called “Sponsored Stories.” According to available records, you may be a “Class Member.”

What is the Action about? The Action claims that Facebook unlawfully used the names, profile pictures, photographs, likenesses, and identities of Facebook users in the United States to advertise or sell products and services through Sponsored Stories without obtaining those users’ consent. Facebook denies any wrongdoing and any liability whatsoever. No court or other entity has made any judgment or other determination of any liability.

What is a Sponsored Story? Sponsored Stories are a form of advertising that typically contains posts which appeared on facebook.com about or from a Facebook user or entity that a business, organization, or individual has paid to promote so there is a better chance that the posts will be seen by the user or entity’s chosen audience. Sponsored Stories may be displayed, for example, when a Facebook user interacts with the Facebook service (including sub-domains, international versions, widgets, plug-ins, platform applications or games, and mobile applications) in certain ways, such as by clicking on the Facebook “Like” button on a business’s, organization’s, or individual’s Facebook page. Sponsored Stories typically include a display of a Facebook user’s Facebook name (i.e., the name the user has associated with his or her Facebook account) and/or profile picture (if the user has uploaded one) with a statement describing the user’s interaction with the Facebook service, such as “John Smith likes UNICEF,” “John Smith played Farmville,” or “John Smith shared a link.”

What relief does the Settlement provide? Facebook will pay $20 million into a fund that can be used, in part, to pay claims of Class Members (including Minor Class Members) who appeared in a Sponsored Story. Each participating Class Member who submits a valid and timely claim form may be eligible to receive up to $10. The amount, if any, paid to each claimant depends upon the number of claims made and other factors detailed in the Settlement. No one knows in advance how much each claimant will receive, or whether any money will be paid directly to claimants. If the number of claims made renders it economically infeasible to pay money to persons who make a timely and valid claim, payment will be made to the not-for-profit organizations identified on the Settlement website at http://www.fraleyfacebooksettlement.com/ (if clicking on the link does not work, copy and paste the website address into a web browser). These organizations are involved in educational outreach that teaches adults and children how to use social media technologies safely, or are involved in research of social media, with a focus on critical thinking around advertising and commercialization, and particularly with protecting the interests of children.

In addition to monetary relief, Facebook will (a) revise its terms of service (known as the “Statement of Rights and Responsibilities” or “SRR”) to more fully explain the instances in which users agree to the display of their names and profile pictures in connection with Sponsored Stories; (b) create an easily accessible mechanism that enables users to view, on a going-forward basis, the subset of their interactions and other content on Facebook that have been displayed in Sponsored Stories (if any); (c) develop settings that will allow users to prevent particular items or categories of content or information related to them from being displayed in future Sponsored Stories; (d) revise its SRR to confirm that minors represent that their parent or legal guardian consents to the use of the minor’s name and profile picture in connection with commercial, sponsored, or related content; (e) provide parents and legal guardians with additional information about how advertising works on Facebook in its Family Safety Center and provide parents and legal guardians with additional tools to control whether their children’s names and profile pictures are displayed in connection with Sponsored Stories; and (f) add a control in minor users’ profiles that enables each minor user to indicate that his or her parents are not Facebook users and, where a minor user indicates that his or her parents are not on Facebook, Facebook will make the minor ineligible to appear in Sponsored Stories until he or she reaches the age of 18, until the minor changes his or her setting to indicate that his or her parents are on Facebook, or until a confirmed parental relationship with the minor user is established.

Your options are: submit a claim form, exclude yourself, object, go to the “fairness hearing” or do nothing.

To Parents and Guardians of Children on Facebook: The Settlement also involves the claims of minors featured in Sponsored Stories on Facebook. Please see the Settlement website for more information.

More information? For more information about the Settlement and how to take the actions described above, please visit www.fraleyfacebooksettlement.com (if clicking on the link does not work, copy and paste the website address into a web browser) or write to the Settlement Administrator at Fraley v. Facebook, Inc., Settlement, c/o GCG, P.O. Box 35009, Seattle, WA 98124-1009, or GCG@fraleyfacebooksettlement.com. You may also contact Class Counsel, Robert S. Arns of the Arns Law Firm, by calling 1-888-214-5125 or by emailing fb.settlement@arnslaw.com.