Blog

Facebook will apparently reach a settlement agreement with its users over the class-action Sponsored Stories ad suit and will pay up to $10 to each user.

In April 2011, five Facebook users filed a class-action suit against the social network for displaying their names, profiles and their network activity as part of the Sponsored Ads campaign. Facebook Sponsored Stories ads allow advertisers to pay for highlighting users’ activity (such as like, event attending, sharing link, etc.) at a brand’s Facebook page and distributing it among the users’ friends.

image: alexpalantoni.com

Last year Facebook offered a settlement agreement in which the Sponsored Stories terms will be clarified and 20 million dollars will be paid to the settlement fund and will be transferred to Internet privacy advocacy groups, but the judge thoughts the users should receive some of the money, though the number of potential claimants could reach 100 billion, the compensation could not be very high.

The Court accepted a second settlement agreement suggesting that Facebook users who see themselves offended by the Sponsored Stories ad will be able to withdraw up to $10 from the settlement fund. Recently, many Facebook users received settlement notices to their email boxes.

The catch with this settlement agreement is that as more Facebook users would want to join it, the payment will be lessened. And if the settlement fund will not cover the users’ payment and the lawyers’ fees, both sides might go back to negotiate. At any case, the final hearing is scheduled to June 2013.