Facebook Pays $10m To Charity To Settle Privacy Lawsuit

Facebook has agreed to pay $10 million (£6.4m) to charity in order to settle a lawsuit that accused the social network of violating user’s rights to control the use of their own names, photographs and likeness, as defined by Californian law

The lawsuit, filed in San Jose, California, was concerned about the way that Facebook shows users’ ‘likes’ on sponsored stories without giving them the chance to opt out.

The settlement was reached last month, but was only made public through court documents over the weekend.

Charitable solution

The lawsuit was filed by five Facebook users, whose proposed class action could have included nearly one in every three Americans and cost the social network billions of dollars. Although this potential financial disaster has been avoided, the outcome is a blow for Facebook, who said in the lawsuit that a trusted referral was the “Holy Grail” of advertising.

Sponsored stories are adverts that appear on a member’s Facebook page, showing another friend’s name, picture and information that they have ‘liked’ a certain page. Facebook Chief Operating Officer Sheryl Sandberg has said that the value of a sponsored story was worth at least twice and up to three times the value of a standard Facebook advert without an endorsement.

However US District Judge Lucky Koh said that the plaintiffs had shown that economic injury could occur through the use of this information, as they would not be paid. “California has long recognised a right to protect one’s name and likeness against appropriation by others for their advantage,” she said.

The settlement is the latest in a number of privacy controversies to affect Facebook.

It is currently facing a class action filed in California which is seeking $15 billion (£9.4bn) in damages for privacy violations tied to the tracking of web users, while both it and Apple have been asked to explain what user data their software accesses by US Congressmen.

Earlier this month, Facebook added new security controls for administrators of the site’s ‘Pages’ feature to help protect user’s privacy.

What do you know about social networks? Find out with our quiz!