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Judge casts doubt on Facebook 'Sponsored Stories' privacy deal

U.S. District judge Richard Seeborg says that the settlement, which will cost Facebook $20 million, "doesn't make any sense."

A U.S. District Court judge has some concerns about the settlement Facebook struck over privacy concerns with its "Sponsored Stories" feature.

Judge Richard Seeborg yesterday heard the details of a settlement Facebook had inked with plaintiffs in a suit related to the way in which the social network was displayed Sponsored Stories. The five plaintiffs, which aimed at representing over 100 million members in a class-action suit, argued that by displaying their likeness and pages they had liked in a Sponsored Stories listing across the site, Facebook was violating their privacy. However, back in May, the parties agreed to a $20 million deal that would see Facebook give $10 million to charity and pay $10 million for legal fees.

"That doesn't make any sense to me," Seeborg said yesterday after hearing the details of the settlement, according to Reuters which was in attendance. Seeborg was especially dubious of Facebook's claim that the settlement, which includes changes to Sponsored Stories privacy, is worth about $123 million in value.

Seeborg was unsure why Facebook was paying $20 million for $123 million in value, and asked the parties why the social network isn't providing the plaintiffs with any damages. According to Wired, which was also at the hearing, Seeborg wondered why the settlement wasn't $100 million, given the deal's value.

Michael Rhodes, Facebook's attorney, shot back, saying that he wasn't "going to pay $100 million for a case I should win."

The lawsuit surrounding Facebook's Sponsored Stories has been filled with drama, to say the least. Facebook last year asked to have the case thrown out, but that request was denied. Last month, after the settlement had been reached, U.S. District Court Judge Lucy Koh backed out of the case. Her recusal came just a day before the initial discussion on the settlement was supposed to be held.

Since Seeborg was expressed doubt on the settlement, it's not immediately clear what might happen next. A final decision on the matter likely won't come down for several months.

"We continue to believe that the settlement is a fair, reasonable, and adequate resolution of the case and should be approved," a Facebook spokesman told CNET in an e-mailed statement this morning.