Facebook to pay out $20 million in privacy compensation

Posted on Wednesday, 28th August 2013 @ 12:01 PM by Text Size A | A | A

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Facebook will pay out $20 million in compensation to users who had their personal information shared on the website without permission. Each of them will receive a $15 payout.

While the total compensation fund is an impressive $20 million, once it’s distributed among 614,000 users, who joined the class lawsuit against Facebook, each of them will only get $15, according to a court settlement that was approved Monday at US District Court in the Northern District of California.

The lawsuit was filed in 2011 by five plaintiffs, who accused Facebook of using their personal details in its “sponsored stories” advertisements without their permission. Around 150 million users, who “liked” a certain product or brand, would later have their pictures and “likes” appear in the ad section of their online friends’ pages.

The plaintiffs estimated the “sponsored stories” scheme earned Facebook approximately $234 million between January 2011 and August 2012, according to court filings cited by Reuters.

People who responded to an email from Facebook earlier this year are the users who will receive the $15 payouts. About 7,000 Facebook users rejected the settlement altogether, which means they can still bring their own legal action against the social network.

Although the monetary relief to each class member is relatively small and the percentage of class members who submitted claims is limited, the settlement as a whole provides fair, reasonable and adequate relief to the class,” US District Judge Richard Seeborg said in a statement regarding the ruling.

The Judge asserted there was no proof the claimants were “harmed in any meaningful way,” pointing out that Facebook had only manipulated the information users had already disclosed to their friends, and had just redisplayed it to the same people in the form of an advertisement.

Apart from paying out compensation to class members in the lawsuit, the terms of the settlement also force Facebook to change its “Statement of Rights and Responsibilities,” granting users more control over their content sharing.

Facebook’s total losses from the lawsuits would be about $145 million, The Guardian cited the company’s attorneys as saying.

Facebook welcomed the end to the protracted lawsuit. “We are pleased that the settlement has received final approval,” a Facebook spokesperson said in a statement.

Child rights advocates, who argued that minors were put at risk by having their content shared with advertisers, were not satisfied with the settlement, stating that it did little to protect the rights of children.

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