Facebook Agrees to $20 Million Settlement in “Sponsored Story” Case

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On Monday, US District Judge Richard Seeborg approved a $20 million settlement by Facebook in the “Sponsored Story” class action.

The issues revolved around Facebook using the names and pictures of about 150 million Facebook members in its Sponsored Story program, without providing the users a choice to opt-out and without paying them.

  

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A part of the settlement would go to organizations promoting online privacy while the rest would go to members of the class, with a cap of $15 per affected user.

While admitting the $15 payments were quite small, Judge Seeborg said that the plaintiffs had failed to prove that Facebook had “undisputedly violated the law.”

He also added that the claimants did not prove that they were “harmed in any meaningful way.”

The case was brought against Facebook in 2011 by five affected members as a class action.

Facebook, according to the estimates of the court, made about $73 million in profit from the Sponsored Stories that used the details of the affected 150 million members.

However, plaintiffs’ lawyers claim that Facebook earned about $145 million in advertising revenue from the program.

However, the best part of the settlement is that it requires Facebook to make significant changes to its “Statement of Rights” and provide users with more detailed information, as also more control, over how their personal details can be used by the social network giant.

However, the Sponsored Story has hardly reached its end, as at least 7,000 Facebook users who had been affected, opted out of the settlement. This leaves them free to bring their own action in the matter.

Not all of the 150 million Facebook members affected by the Sponsored Story program would receive compensation, but only those who had responded to an email from Facebook sent out earlier this year, would be eligible.