Handing over $10 million in a lawsuit settlement doesn’t sound like a great result for a company, unless, however, that company is Facebook and it could’ve potentially had to pay billions. Back in May it was reported that the company had settled with users suing over what they called a “misleading advertising scheme” involving “Sponsored Stories,” but the terms were undisclosed at that time.
Users claimed the sponsored stories featured ads that would display that person’s activities — “liking” a page or becoming a fan of a brand — on their pals’ pages, and basically turn a user into a marketer.
Five of those users unhappy with Sponsored Stories sued Facebook back in 2011, claiming the practice turned them into unpaid advertisers, with no chance to opt out of having their activities and images commercialized in such a way.
The terms of the settlement were previously undisclosed, but Boston.com reported the $10 million figure over the weekend. That money will be given to charity, confirmed Facebook’s attorney, after a judge approves the settlement.
Facebook said the practice didn’t hurt the plaintiffs it didn’t hurt the users at all.
Facebook settles sponsored stories suit for $10M [Washington Post]