Facebook Inc (FB) Reaches Final Settlement In Sponsored Stories Suit

Facebook Inc (NASDAQ:FB) is finally putting to rest the lawsuit that was filed over its Sponsored Stories advertisements. Dan Levine of Reuters reports that the social network will pay $20 million and add more user controls over the feature.

Facebook Inc (FB) Reaches Final Settlement In Sponsored Stories Suit

Details on the lawsuit against Facebook

The class action lawsuit was filed against Facebook Inc (NASDAQ:FB) in 2011 by five plaintiffs. They said the Sponsored Stories advertising program showed various users’ “likes” of some advertisers to their friends without either paying them or making it possible for them to opt out of the advertising program.

Previous settlements in Facebook’s lawsuit

A previous settlement had been reached in May 2012, although the judge in the case rejected it later. The social network brought a new offer to settle in November, agreeing to pay $20 million to members of the class and add user controls so that people could opt out of the Sponsored Stories ad program. The judge offered only a preliminary approval in December, and it was then opposed by plaintiffs and also children’s advocacy groups.

They said the opt-out feature should be an opt-in feature for Facebook users under the age of 18. This would lift the responsibility from their parent. However, the judge has approved the settlement offer in spite of the groups’ belief that it does not go far enough in terms of the user controls provided by Facebook Inc (NASDAQ:FB).

Facebook sends legal notice

In January, the social network sent a legal notice to users in connection with the Sponsored Stories lawsuit. The notice said they will each receive payments of $10. Court filings indicated that about 125 million Americans received the legal notice. If all of them filed a claim for a payment, each would only receive about 16 cents. Users who did not delete the legal notice sent to them by Facebook Inc (NASDAQ:FB) had until May 2 to file a claim.

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Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at Mjones@valuewalk.com.