Facebook will pay $15 per user after judge approves final $20M ad settlement

Gigaom

Facebook will pay out $9 million to approximately 614,000 users as part of a $20 million legal settlement that is intended to compensate users for the social network’s decision to display their pictures in “sponsored stories” ads without permission.

In an order filed Monday in San Francisco, U.S. District Judge Richard Seeborg gave the final thumbs up to a revised deal that will raise individual payouts to $15 each — a total that is higher than the $10 maximum proposed under an earlier version of the settlement. The payouts will only go to those who responded to a notice earlier this year (it’s too late for everyone else).

The payouts increased after fewer people than anticipated responded to the class action notices sent out by Facebook. Under the final deal, the $11 million left over after the $15 subscriber payouts will go to lawyers, fees and a dozen non-profit groups such as the Electronic Frontier Foundation and the Berkman Center for Internet and Society.

Monday’s decision is the final step in a long-running court case that not only shone light on Facebook’s advertising practices, but also raised a debate over the role of lawyers and activists groups in addressing alleged privacy violations by companies like Google, Apple and Facebook. On previous occasions, courts approved multimillion dollar settlements in which all of the money went to lawyers and consumers groups; this time, Judge Seeborg rejected the first version of the settlement, saying the proposed payments — and the lawyer awards — were “plucked out of thin air.”

Approximately 7,000 Facebook users opted out of the settlement altogether, meaning they are free to bring lawsuits of their own against the social network. Their chance of cashing in would appear low, however, as Judge Seeborg repeatedly questioned whether Facebook users had suffered a real loss, noting it is “far from clear that they could ever have shown they were actually harmed in any meaningful way.”

Here’s today’s order (related court documents describe the lawyers fees and the number of claims) :

Sponsored Story Approval




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