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Judge Approves Facebook's Sponsored Stories Settlement

By Robyn Hagan Cain on December 05, 2012 | Last updated on March 21, 2019

When a Facebook user 'likes' a product or company, or posts something related to a product or company, Facebook sometimes presents those likes or posts to other users in that person's network as a paid promotion for the product or company. Facebook had a cyber snafu last year after California users complained that their images were being used to promote products without their permission through 'Sponsored Stories' posts.

The users sued, arguing that California's right of publicity laws prohibit the social network from using a person's image to promote a product without the person's consent.

Facebook tried to settle the case, but U.S. District Judge Richard Seeborg rejected the initial settlement agreement for attorneys fees and $10 million in cy pres. In October, lawyers filed a $20 million revised settlement agreement. This week, Judge Seeborg tentatively approved the settlement.

The new agreement only offers nominal damages: Up to $10 per plaintiff. Since the proposed settlement covers an estimated 125 million people, awarded damages could be less than 2 cents per class member. Any money left over will go to charity, Reuters reports.

While the new agreement may not sound much better than the original, court documents indicate that Facebook is engineering a new tool to enable users to view content that might have been displayed in Sponsored Stories and opt out if they desire.

If user privacy is the end game, the settlement may be worth more to users than the 2-cent to 10-buck payout.

Despite tentative approval, the case will continue into 2013. Judge Seeborg scheduled a hearing for June to consider final approval of the settlement, the Los Angeles Times reports.

Are you going to collect your share of the Sponsored Stories settlement? Let us know on Facebook, or be ironic and tell us your plan on Google+.

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