Facebook to give users more control over controversial ads

If a judge approves Facebook's settlement of a class-action lawsuit regarding "sponsored stories," the social network will give users more control over the advertising tool, which features users' profile photos and other information in ads for businesses and products the users have "Liked."

Reuters reported today that the settlement agreement includes giving users the ability to determine what, if any, user information can be featured in ads, and adding new language to Facebook's guidelines informing users of sponsored ads, according to court documents filed Wednesday. TechCrunch reported that user opt-outs will apparently apply on a story-by-story basis and that users can't opt out of all sponsored stories in one fell swoop. Facebook agreed to keep the changes in place for at least two years.

While an economist hired by the suit's plaintiffs said the value of the changes is about $103 million for Facebook members, the company will pay just about $20 million to take care of attorney fees and pay organizations that are devoted to educating people about using social networking safely.

The case's plaintiffs -- who aimed to represent more than 100 million potential class members -- claimed the social network violated users' right to privacy by publicizing their "Likes" in advertisements without asking them or compensating them.

This may put a kink in Facebook's advertising plans, as sponsored stories was a potential answer to Facebook's money-making woes. Facebook officials said in court documents that the value of a sponsored story ad was at least twice and up to three times that of a standard ad.