Facebook Inc (NASDAQ:FB) has settled a class action lawsuit for $20 million over the use of people’s pictures in sponsored adverts without their permission. Mashable reported that Facebook settled the lawsuit with $20 million – which the court then approved. The settlement may affect Facebook’s fourth quarter earnings, which are expected to be reported on Wednesday, January 30.


US users of the social networking website, which is the largest in the world with over a billion users, last week received an email from Facebook Inc (NASDAQ:FB) informing them of the lawsuit and details of how to make a claim.

However, one part of the email also states that: “If the number of claims made renders it economically infeasible to pay money to persons who make a timely and valid claim, payment will be made to the not-for-profit organizations on the Settlement website at www.fraleyfacebooksettlement.com

What this means, is that if too many Facebook users make claims then the money will instead go to not-for-profit organisations which are “involved in educational outreach that teaches adults and children how to use social media technologies safely, or are involved in research of social media, with a focus on critical thinking around advertising and commercialization, and particularly with protecting the interests of children.”

Whether or not the number of claimants will exceed the amount of money available, and cause it to instead be given to the not-for-profits, is as yet unknown. With 150 million US Facebook users, there is a very real possibility of that happening – however many have been dismissing the email as spam.

Facebook Inc (NASDAQ:FB) users interested in making a claim should check their email inboxes and junk email folders for an email last week from [email protected] in order to see full details of the case. In order to make a claim, users should visit www.fraleyfacebooksettlement.com/claim, and enter the settlement number that was included in the email they received.

Facebook’s shares were today at $31.54, up 1.33 percent in pre-market trading.