If you’re a Facebook (FB) user, there’s a good chance you got an email over the last 48 hours with the subject: “Re: LEGAL NOTICE OF SETTLEMENT OF CLASS ACTION.” It’s not of the Nigerian riches variety. For one, it’s only offering you up to $10. For another, it’s legit.
The email stems from a lawsuit we’ve been covering exhaustively here at the Not-So Private Parts. “Fraley vs. Facebook” stems from Facebook’s decision in 2011 to put users in “Sponsored Story” ads based on things that they had “Liked.” The ads didn’t always reflect the context in which someone “Liked” something, as the dude who famously wound up promoting a 55-gallon drum of sexual lubricant last Valentine’s Day can attest, and there was no way of opting out (beyond not Liking anything).
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Within three months of the announcement, an enterprising group of plaintiffs led by seamstress Angel Fraley sued Facebook in California saying the company had violated the law by using their names and likenesses in ads without their permission and without paying them. (Lead plaintiff Fraley later dropped out of the suit citing Facebook lawyers’ aggressive tactics, which basically consisted of digging up embarrassing material about her from her Facebook account.)
Facebook and the plaintiffs settled the suit in December to the tune of $20 million. That $20 million is covering the class action lawyers’ fees; the rest is potentially going to be divvied up among Facebook users who appeared in Sponsored Stories ads — which is why you got that legal notice inviting you to claim your up-to-$10 share — or, if the demand is too great, the money will instead go to a bunch of non-profits that work on privacy issues. If the amount of money divided by the number of claimants comes out to less than $4.99 each, the money goes to the non-profits.
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According to Social Bakers, Facebook has nearly 165 million American users; court filings suggest about 125 million of them got this notice. If they all wanted a piece of the full $20 million pie, they’d get 16 cent slices. If more than 4 million people claim their share, that would mean less than $5 each. And we can assume that the actual amount of money to be divvied up is going to be significantly reduced by the plaintiff’s class action lawyers taking a cut. In the website about the settlement, the lawyers suggest the amount left over after their fees is going to be $12 million. If 3 million people — or 2.4% of those that received the notice — apply for a piece of that amount, it’ll take the per-person payment below the $4.99 each threshold. Given that, it seems fairly likely this money is going to be split among non-profits — including the Center for Democracy and Technology, the Electronic Frontier Foundation, and the Berkman Center for Internet and Society (full list here) — rather than by users, meaning those 14 non-profits will get almost a $1 million each. That’s assuming that 99% of people who receive the email don’t just delete it as spam.
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But even if you don’t get paid, there is an upside from the settlement. Facebook has to give all users “additional information about and control over the use of their names and profile pictures in Sponsored Stories.” Maybe that means Facebook will give you a better way to control this than currently exists.
Here’s the notice, in all of its legalese glory: