Facebook To Pay $10 Million As Part Of Sponsored Stories Settlement

Posted Jul 16, 2012

Facebook will be paying $10 million to consumer groups and privacy advocates to settle the “Sponsored Stories” case.  A federal judge still has to sign off on the settlement.  Facebook reported last month that they would be settling the lawsuit.  It is unknown which consumer groups and charities will be getting the $10 million.

Some of the consumer rights groups that will get some of the money include Consumer Federation of America, Rose Foundation, Center for Democracy & Technology, and the Stanford Law School Center for Internet and Society.  Many of the groups will receive between $500,000 and $1 million.

The $10 million does not include the legal fees that have to be covered.  The Sponsored Stories lawsuit started last year after 5 Facebook users filed a lawsuit against the company under California jurisdiction for using their photos and names in the Sponsored Stories ad program without their permission.

Opposition of the settlement believe that little good will come from the payout.  They believe that Facebook will do little to improve privacy concerns.  ?The proposed changes to the privacy agreement don?t serve the class,? said Jeff Chester, executive director of the Center for Digital Democracy as quoted by Mashable.

The CDD will not be receiving a part of the settlement.  Facebook users will not be able to opt out of the Sponsored Stories program according to the settlement papers.  Facebook will still be using member check-ins and likes as paid ads for brand pages.

But Facebook will need to modify their policy and user term agreement for when a member signs up.  The terms must indicate that Facebook reserves the right to use specific content for sponsored story ads.