Lawsuit challenges Facebook 'like' ads

SAN JOSE, Calif.

Most of Facebook's 800 million users seem very open to sharing their likes and interests. But should Facebook then be able to use your name and photo for online ads? That is what the lawsuit is all about. Facebook calls them sponsored stories.

If you indicate you like a company or product, your name and profile photo may show up on your friends' pages, giving the appearance of an endorsement.

"The main question is whether Facebook has gotten clear consent from users," said Eric Goldman who is on the faculty at Santa Clara University's School of Law and is director of its High Tech Law Institute. "Facebook would argue that it has. The lawsuit argues that it hasn't. Until we resolve that, we won't really know if Facebook is in the clear."

The lawsuit was filed by three adults and two minors from the Bay Area and Seattle. Facebook tried to get the case dismissed but failed in federal court in San Jose.

Facebook did not respond to our request for an interview or comment.

Attorney for the plaintiffs, Jonathan Davis with The Arns Law Firm, said he was "gratified by the court's decision." Beyond that, it is the law firm's "policy not to comment further."

Facebook users tell us they're not comfortable with having their likes appearing as commercial endorsements.

"As a user, I don't like that. My favorite movie is 'Fight Club.' I don't like that that's being accumulated and then in my screen it's going to show here's a 'Fight Club' poster, go buy it," said Facebook user Natasha Gupta

"It kind of seems like it's intruding in our privacy a little bit and kind of endorsing something we might not necessarily endorse," Facebook user Dang Do said. "So it seems like they're trying to take advantage of us in that way."

Facebook does provide settings for users to opt out or turn off the feature. However, users we talked with did not know about having that option.

The case is set to go to trial in San Jose one year from now. Goldman thinks it is very likely there could be a settlement before then, since this case would complicate Facebook's efforts to do an initial public stock offering.

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