While early investors in Facebook Inc (NASDAQ:FB) are finally seeing some money headed their way as Facebook Inc (NASDAQ:FB) finally saw its stock reach the $40 mark, Facebook Inc (NASDAQ:FB) may soon begin settling a $20 million class-action lawsuit brought against it in 2012. Over a million people who were unwittingly featured in Facebook “Sponsored Stories” advertisements brought suit against the company for using photos of them in “Sponsored Stories” advertisements. Simply liking a product could have seen your photos used, and on top of that, there was no opt-out available.
A San Francisco federal judge granted preliminary settlement approval for the case in December 2012. Late Monday evening, the judge, Richard Seeborg, approved a final settlement agreement between the plaintiffs and Facebook, granting anyone who bothered to file the necessary paperwork to join the suit a whopping….$15.
Seeborg wrote, “The record leaves no doubt that this settlement was the product of arms-length negotiations and compromise,” in his final order.
“Although the monetary relief to each class member is relatively small and the percentage of class members who submitted claims is limited, the settlement as a whole provides fair, reasonable, and adequate relief to the class, in light of all the circumstances, including the low probability that a substantially better result would be obtained through continued litigation, Seeborg wrote. “The injunctive relief, while not incorporating all features that some of the objectors might prefer, has significant value and provides benefits that likely could not be obtained outside the context of a negotiated settlement, even if plaintiffs were to prevail on the merits.”
While the monetary settlement won’t send any recipient into earlier retirement, privacy groups and advocates hailed the decision and Facebook Inc (NASDAQ:FB) knows that in the future it won’t get off as easy if it continues practices like this.
Facebook to provide greater transparency
Facebook Inc (NASDAQ:FB) also agreed to “provide greater disclosure and transparency,” and while the judge suggested that this could all be put to bed if Facebook were to adopt an “opt-in,” “opt-out” policy, he also stressed that Facebook cannot be forced to do so.
“As Facebook points out, however, it is a platform for sharing information, which members join voluntarily,” Seeborg added. “Members are not charged any fees for Facebook’s services, which cost the company hundreds of millions of dollars to provide. While it does not follow that Facebook has carte blanche to exploit material belonging to, or regarding, its members in any fashion whatsoever, neither is it foreclosed from adopting [Statement of Rights and Responsibilities] that are not as ‘pro-member’ or ‘pro-privacy’ as some might like.”