Facebook settles "Sponsored Stories" lawsuit, will pay charity

Facebook will give $10 million to charity as part of an agreement to settle a lawsuit concerning its "Sponsored Stories" feature. According to Reuters, the settlement was actually made in May but the documents in the case were finally made public this weekend. Facebook has not commented publicly on the settlement.

The original class action lawsuit surrounds Facebook's "Sponsored Stories" feature, which started in 2011. These ads appear on Facebook users' news feeds. The lawsuit claimed that Facebook was in violation of California law due to the company publicizing its users' "likes" of the Sponsored Stories without payment or offering a way to opt out of having their "likes" featured.

Since this was a class action lawsuit, it would have covered hundreds of millions of Facebook users if it had gone to trial. Facebook was facing a loss of billions of dollars if they were the losing party in the lawsuit. The story gives no other details of the settlement agreement, including if Facebook has now agreed to give its users a way to opt out of having their "likes" publicized in Sponsored Stores. There's also no word on which charity or charities will receive the $10 million from Facebook.

Source: Reuters

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3 Comments

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Lost billions? The feature is brand new, there is no way they would have got more than a couple of thousand dollars before they realised that they will need to tweak it so it doesn't break this obscure law.

$10 million is nothing to Facebook, and they are already charitable as it is, so this is just a top up to the charity "in the name to this lawsuit" that they would likely give anyway. Better to just make a large charity donation early ($10 million is nowhere near any possible damages for this feature) and get these whingers to fob off at the same time.