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Court favors Facebook in $9.5 million Beacon settlement

Federal court judges says the amount, awarded for a lawsuit about alleged privacy violations, is not too low, Bloomberg reports.

A federal appeals court ruled today that $9.5 million is enough to settle a lawsuit that accused Facebook of violating privacy laws with its now defunct advertising program Beacon, Bloomberg reported.

The original class-action lawsuit, filed in 2008, targeted the social network's alleged failure to provide adequate information and privacy controls when it came to the Beacon. The program shared information about users' activity on other Web sites in Facebook news feeds.

Users were upset because Facebook launched the service to automatically include everyone, instead of as an opt-in. Eventually, the service was switched to opt-in.

The social network agreed to settle the class action lawsuit in 2009, but after the settlement was approved, some plaintiffs weren't satisfied with the terms and filed an appeal.

Today's ruling says the settlement amount, which includes about $3 million for the lawyers, lead plaintiffs, and administrative costs, was not too low. The settlement was struck on behalf of 3.6 million Facebook users.

Part of the settlement also included putting aside the remaining $6.5 million to set up an independent foundation to promote online privacy, safety, and security. Plaintiffs took issue with appointing a Facebook director sitting on the board of the charitable organization set up to distribute the funds, but today's ruling reportedly said there was no conflict of interest.