Facebook hit with $33m "Sponsored Stories" lawsuit in Brazil

The Brazilian Institute of Computer Law (IBDI) filed a class action lawsuit against Facebook for unfair businesses practices around its "Sponsored Stories" advertising program.

IBDI is accusing Facebook with violating users' privacy by using their names and profile pictures in the advertising scheme and is demanding R$76m ($33m) in collective damages.

According to the institute, "Sponsored Stories" appear in feeds in a way that makes it impossible to distinguish it from commercial advertising by misappropriating users' names and likenesses - IBDI is also demanding the deactivation of the feature on the social networking site that enables this.

In the lawsuit, the institute adds that the service violates the individual privacy of about 76 million Facebook users in Brazil. IBDI also mentioned its concern about the fact that Facebook has many underage users, who cannot authorize the website to use their names and likenesses in advertising material.

"Using the name and image of Facebook users for business purposes without any compensation to them or share in profits from the sale of advertising represents unfair business practice and misleading customer service," adds IBDI attorney Sérgio Palomares.

The news of the class action lawsuit against Facebook in Brazil follows similar challenges faced by the company in the US last year, when it had to agree on a $20m settlement of a lawsuit over its "sponsored story" advertisements.

The company told newspaper Valor Econômico that it does not comment on ongoing lawsuits.