Facebook clarifies how it uses data for ads

Facebook proposed an update to its data use policy on Thursday that clarifies how it uses people's information in advertisements.

The update is part of a court-approved settlement in which Facebook also agreed to pay $20 million over privacy violation charges.

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A group of users had sued Facebook, claiming it was using their names and pictures in "sponsored story" ads without their permission. They argued the company was falsely making it seem like they had endorsed products to their friends.

In the new data use policy statement, Facebook clarifies: "You give us permission to use your name, and profile picture, content, and information in connection with commercial, sponsored, or related content (such as a brand you like) served or enhanced by us."

By agreeing to the new policy, users who are younger than 18 are verifying that their parents have also agreed to the terms, Facebook said. 

The company also revised sections of the policy describing how it targets ads, how third-party applications access information and how the audience of posts changes based on tags. 

Facebook will review feedback about the new policy over the next week.