Facebook's lawsuit settlement gets questioned by judge

In June, it was revealed that Facebook had entered into an agreement to settle a lawsuit surrounding its Sponsored Stories feature. Under its terms, Facebook would pay $10 million to a charity to settle claims that Facebook was in violation of a California law. The class action lawsuit claimed the company was publicizing users' "likes" of Sponsored Stories without payment or offering a way to opt out of having their "likes" featured.

Now it looks like that relatively small settlement fee (along with $10 million more to pay for legal fees) could be in jeopardy. Reuters reports that on Thursday, US District Judge Richard Seeborg said in a hearing that amount of money " ... doesn't make any sense to me."

He also wondered why none of the class action lawsuit members received any money in Facebook's settlement. In response, Facebook's attorney Michael Rhodes claimed that they were unable to discover the exact value of each Facebook user's "likes" in publicizing them in Sponsored Stories.

In addition to the settlement fees, Facebook has also agreed to give users more control on how their personal information is used on the service. According to a third party economist, the changes for Facebook members is valued at $103 million.

Judge Seeborg may take several months before revealing his final decision on whether or not to approve the settlement. Regardless, it does seem rather odd that, in terms of cash, Facebook will get not much more than a slap on the wrist if this settlement goes through.

Source: Reuters

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" Facebook's attorney Michael Rhodes claimed that they were unable to discover the exact value of each Facebook user's "likes" in publicizing them in Sponsored Stories"

Huh he's an idiot all you need to do is take the 10M and divide by however many users were named on the class action and that's how much each user gets simple as that....

Athlonite said,
Huh he's an idiot all you need to do is take the 10M and divide by however many users were named on the class action and that's how much each user gets simple as that....
LOL! Not quite. You're assuming we know the value of the clicks to be equal to $10M but the fact is that those clicks would likely be worth much more than that when you consider a comparable program, such as Google, would cost (it would blow past $10M in no time). Granted this case is dwarfed by the likes of Googles program but you get the point. The ultimate marketing value would be tough to quantify.

I think this judge is also looking at the fact that 10m fine and 10m lawyer fees. This is just like the Netflix CAL thats going on right now. I don't think the lawyers did 10m in work. I think hes calling that out also.

Hm... That does seem a bit shady to me. It's a shame, but I think Facebook is becoming one of those companies that is worth disliking...