Facebook has been forced to allow users to opt-out of their names being used in ‘sponsored stories’ as part of a legal settlement.
In December last year, five angry users filed a lawsuit against the Mark Zuckerberg-run company.
At the time, Facebook claimed that the case was “without merit”.
Now Facebook, according to court documents filed in North Carolina on Wednesday, has agreed to hand over more control to its users in order to settle the case.
The value to Facebook members resulting from the changes is about $103 million, in the opinion of one economist hired by the plaintiffs. But the amount Facebook will actually pay to settle the case is just over $20 million, according to court documents.
A “Sponsored Story” is an advertisement that appears on a member’s Facebook page and generally consists of another friend’s name, profile picture and an assertion that the person “likes” the advertiser.
The members filed the lawsuit seeking class-action status against Facebook, saying it violated California law by publicising users’ “likes” of certain advertisers without paying them or giving them a way to opt-out.
According to Reuters the case involved over 100 million potential class members.
Under the terms of a settlement agreement, Facebook members will be able to control which content can be used for Sponsored Stories. Facebook agreed to maintain these changes and other new disclosures for at least two years, according to court documents.
Facebook has agreed to pay $10 million to organizations devoted to educating people about how to use social networking technology safely. Groups set to receive money include the Electronic Frontier Foundation and the Center for Internet and Society at Stanford Law School, according to the court documents.
Facebook will also pay an additional $10 million for plaintiff attorneys’ fees.
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