Facebook Inc (NASDAQ:FB) is in the news non stop. In this article we are going to look at some of the lawsuits related to Facebook.
The Social Media giant plans to pocket the proceeds from the Settlement Lawsuit against it. According to Forbes, the allies of Facebook Inc (NASDAQ:FB) have been accused of profiting from lawsuits facing the company over the disastrous initial public offering (IPO). This will be a massive blow to the plaintiffs in class action against Facebook, and other providers of free internet services, who would have wished to see the funds end up in their pockets.
Forbes cites Electronic Frontier Foundation (EFF) and Harvard’s Berkman Center for Internet & Society, as major beneficiaries. The proposed settlement in Fraley vs. Facebook, a lawsuit over Facebook’s “Sponsored Stories” feature, would accomplish nothing more than enhancing the disclosure of the plaintiffs’ agreement to lend their names to advertisements when they “like” products, says Forbes‘ Daniel Fisher.
Other beneficiaries would be the lawyers representing both parties, notably, The Arns Law Firm and attorney Jonathan Jaffe; they are both seeking $10 million compensation for their effort during the process. Lawyers always are the biggest winners when it comes to lawsuits.
The Internet Rights and Privacy Organizations, which include EFF, the Berkman Center, Consumer Privacy Rights Fund and Berkeley Center for Law and Technology, will pocket another $10 million.
The report notes that despite the fact that, some of these Internet Rights and Privacy Organizations have in the past collided with Facebook; a majority of them are true allies to the tech giant in one of the most crucial issues dividing the content world currently.
Cy pres are tasked with making sure that these kinds of funds never find their way back to the original pockets in class action settlements, regardless of whether or not, there is a feasible way to get the money to the plaintiffs. In March, it was asserted that there is no way Facebook would manage to disburse a significant amount of money to its 150 million U.S users without risking bankruptcy. The settlement was valued at more than $100 million, although Facebook had already resigned to pay nothing, notes the report after the plaintiffs’ lawyer cited an expert’s valuation.
In such scenarios, these funds are usually directed to independent internet security and privacy organizations, or charity organizations. In 2010, Public Citizen attorney Philip Friedman objected to a similar Facebook settlement that would have directed $10 million to a “privacy foundation” that Facebook set up and arguably controlled through a veto on its board of directors.”
The company was seen as nothing but a subsidiary of Facebook Inc (NASDAQ:FB), which would have threatened the integrity of Cy press settlements. He said, “Cy pres is not allowing a defendant to take money from its left pocket and put it back in its right pocket.”
Daniel Fisher indicates in his article that, Ted Frank of the Center for Class Action Fairness is considering filing an objection to the Fraley settlement. He points to have received an e-mail from Frank saying:
“We’re concerned about the disproportionate attorney payment …and the preexisting relationship between Facebook and some of the proposed recipients.”
“If Facebook is already giving money to these charities, then this is not a “$10 million settlement,” it is just a change in accounting entries,” he said.