Facebook Says User Data Is Price Of Admission

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Facebook has proposed changes to its legal obligations that allow it to feature users' names and profile pictures alongside advertisements without compensating the users.

The changes, in the company's Data Use Policy and its Statement of Rights and Responsibilities, have been outlined in an online post by Facebook chief privacy officer Erin Egan. They come as a result of a $20 million settlement approved last week by a San Francisco judge that resolves claims that the social network featured users' images, some of whom were minors, in its Sponsored Stories advertisements without payment or permission.

Over 600,000 Facebook users will be awarded about $15 each, or about $9 million in total, with the remainder of the settlement going to attorneys and privacy groups.

Facebook could have been on the hook for far more, a potentially ruinous $112 billion, had the judge found it reasonable to apply California Civil Code § 3344, the Celebrities Rights Act, which calls for $750 in damages, or actual damages, if a person's voice, image, name or likeness is used for commercial purposes without consent.

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Egan explains that Facebook "rewrote the entire advertising section to better explain what we thought was important for people to know about how we use the information we receive to provide relevant ads to people on and off Facebook."

The relevant revision to Facebook's Proposed Statement of Rights and Responsibilities clarifies that users grant permission to allow Facebook to use their name, profile picture, content and information in conjunction with ads and sponsored content. A newly added sentence states, "This means, for example, that you permit a business or other entity to pay us to display your name and/or profile picture with your content or information, without any compensation to you."

The other noteworthy change can be found in the company's Data Use Policy. It describes how the company uses facial recognition technology to identify you in friends' photos and to suggest that friends tag you.

"We are able to suggest that your friend tag you in a picture by scanning and comparing your friend's pictures to information we've put together from your profile pictures and the other photos in which you've been tagged," the document says.

Facebook is offering its users the opportunity to review the changes and to comment on them for seven days. Previously, the company offered users the opportunity to vote on governance issues, but it did away with democracy in 2012 after only 665,000 people out of a minimum 300 million cast votes on the future of Facebook voting.