A preliminary settlement was reached regarding the putative class action filed against Facebook in which the plaintiffs alleged that Facebook unlawfully misappropriated the plaintiffs' names, photographs, and likenesses for use in paid "Sponsored Stories" without first obtaining the plaintiffs' consent. Facebook has agreed to pay $10 million into a fund that will distribute the money to nonprofit organizations  that focus on privacy advocacy. The terms of the settlement also require that the Facebook website and Terms of Use be revised to make it clear to all users that their names and likenesses may be used in "Sponsored Stories." The settlement further requires that Facebook provide functionality that enables parents to prevent the names and likenesses of their minor children from appearing in Sponsored Stories.

TIP: This case serves as a reminder to advertisers of the importance of obtaining express consent from individuals before using names and likenesses in commercial messaging, including in online advertising and banners.