A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit appeared skeptical Thursday of arguments that a $20 million settlement with Facebook Inc. over its "sponsored stories" feature would chill future attempts to protect children's online privacy.
The controversial settlement, approved in 2013 by U.S. District Judge Richard Seeborg of the Northern District of California, is under attack on multiple fronts. Critics say the settlement doesn't provide enough benefit to class members whose Facebook activity appeared in other users' streams as part of the since-discontinued advertising program. The court did not tip its hand on whether it's inclined to revoke the deal. But it did not appear to buy the argument that the settlement terms would hinder future enforcement actions.
Scott Michelman, an attorney with the Public Citizen Litigation Group, said "ineffective" settlement provisions still allow Facebook to use kids' names and likenesses in advertising without their parents' consent. If the deal is upheld, Michelman argued, Facebook will counter future challenges to the practice—including possible criminal prosecutions in some states—by saying, "Well, we're just relying on what the court told us we could do."
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