Facebook redoes privacy settlement, offers cash to users

After a judge throws out its first attempt, the company offers $10 apiece to impacted consumers and to set up way for users can see how advertisers may have featured them in "Sponsored Stories."

Facebook's Sponsored Stories allows a user's "Likes" to be used in advertising. Facebook
Facebook is taking another shot at a "Sponsored Stories" settlement, agreeing to pay affected consumers and provide a simpler way to review all Sponsored Stories interactions.

The social-networking giant first tried to settle the case several months ago, but a judge rejected the settlement in August , saying he had "serious concerns" with the pact. In particular, the judge wondered how the parties determined the $20 million settlement amount to be paid out by the social network. The amount included $10 million in legal fees for the plaintiff attorneys.

Under the new agreement, filed Friday, Facebook has to give a one-time cash payment of $10 to all authorized claimants.

It has also agreed to create an "easily accessible mechanism" for users to view their interactions and other content on Facebook that have been displayed in Sponsored Stories. Parents of Facebook users who are under the age of 18 are able to opt their children out of the program. If a minor's parents are not also on Facebook, the child will be kept off Sponsored Stories until he or she turns 18.

Sponsored Stories is one of the latest attempts by Facebook to make more money from advertising. But the feature has faced some concerns about privacy, and some people have been upset that it publicizes users' "Likes" to their Facebook friends but doesn't pay them for the endorsements or allow them to opt out.

The plaintiffs in the suit argued that Facebook was violating their privacy by displaying their likeness and pages they had liked in a Sponsored Stories listing across the site.

About the author

Shara Tibken is a senior writer for CNET focused on Samsung and Apple. She previously wrote for Dow Jones Newswires and the Wall Street Journal. She's a native Midwesterner who still prefers "pop" over "soda."

 

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