Facebook’s New Privacy Policy under FTC Review

Facebook is coming under Federal Trade Commission (“FTC”) scrutiny once again, this time for proposed changes to its privacy policy that the company announced on its website on August 29. The proposed policy changes came less than a week after the company finalized a $20 million class-action settlement concerning how Facebook used its users' "likes" and pictures in its ads products. On August 26, the U.S. District Court for the Northern District of California approved a $20 million fund for Facebook users whose personal information was allegedly used in “sponsored stories” without permission. The “sponsored stories” are an advertising product that looks like a product endorsement from a trusted friend rather than a traditional ad. Under the terms of the settlement, the $20 million will be split amongst any current or former Facebook users who had their identities shown in a “sponsored story” ad, attorneys and charities. Facebook has also agreed to obtain users’ explicit consent before using any private information for “sponsored stories.” The agreement additionally requires that the social network allow users to exclude themselves from the advertising program.