The case was brought on by five users in San Jose, California who alleged that Facebook had misused their private information by allowing products to be advertised according to user endorsements without permission as part of its Sponsored Stories feature.
A Sponsored Story is a paid advertisement that appears to the right of your Facebook page – often it will show a product or offer in conjunction with the profile picture and name of a user who has 'Liked' that brand.
The problem is that users have no say as to whether the things they have 'Liked' will be used as part of a Sponsored Story.
Facebook representatives claim that users are not economically disadvantaged by the feature, but presiding US district judge Lucy Koh disagreed.
This isn't the first time Facebook has been in the headlines over privacy concerns.
Earlier this month, the site held a user vote to determine whether changes to their security policies, which govern how Facebook is allowed to interact with users and manage their information and original content, should go forth.
While 87 per cent of votes were against the privacy changes, Facebook found the result non-binding as voter numbers did not come close to the required 30 per cent threshold.
The decision was criticised by many Facebook users, who argued that the vote was poorly publicised and that the required number of voters, over 300 million, made a binding decision highly unlikely.
Facebook campaigns are a great way to connect with audiences and reach new customers, but people have an expectation of privacy when dealing with social media, so it's important to make sure their information is treated with respect.
Posted by Zak Wash