You can read more about how ads work in non-legalese at:

    https://www.facebook.com/about/ads/

In non-legalese, how Facebook uses information it receives on users:

    https://www.facebook.com/about/privacy/your-info#howweuse

The actual data use policy:

    https://www.facebook.com/full_data_use_policy

The path to these last two - click "Privacy" at the bottom of a Facebook page.