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Judge OKs Facebook's $20M 'Sponsored Stories' Settlement

By Deanne Katz, Esq. on December 05, 2012 | Last updated on March 21, 2019

It appears Facebook is on the cusp of a privacy settlement after months of negotiation over a class-action lawsuit.

There have been a number of lawsuits against Facebook, but this is the one about user privacy and Facebook's "Sponsored Stories" -- an ad campaign in which Facebook took the names and pictures of users who "liked" a company's product and then used it to advertise to the users' friends.

When users found out their names and likeness was being used without permission, things got ugly. The new proposed settlement attempts to rectify that issue.

The settlement offers $20 million for all the Facebook users who were affected by the "Sponsored Stories" ads. That's $10 each for about 2 million users, Reuters reports. Funds that are unclaimed would go to charity.

The settlement also provides the opportunity for users to opt out of Facebook's "Sponsored Stories" ads. But not everyone is happy about the offer.

The Center for Public Interest Law is not in favor of the proposed settlement because it fails to protect underage users, according to the San Jose Mercury News. They want greater protections for Facebook users under 18, such as requiring affirmative permission from a parent before they opt into the "Sponsored Stories" ad program.

That's a nice idea when it comes to Internet privacy for minors, but it may not be part of the final settlement. So far the deal has gotten preliminary approval from U.S. District Judge Richard Seeborg.

If the settlement does receive final approval after a hearing, a lawyer with the Center for Public Interest Law has vowed to appeal, reports Mashable.

Facebook did offer a previous settlement in this case over the summer, but it was quickly dismissed by the judge. This offer appears to be in good faith.

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