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Facebook’s (NASDAQ:FB) settlement of its “Sponsored Stories” class action lawsuit has taken another turn.
A new settlement agreement, filed Saturday in the U.S. District Court in San Francisco, removed provisions set aside for plaintiffs lawyers’ fees and permits the plaintiffs to apply for a cash payment of up to $10 each.
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Initially filed in 2011, the lawsuit alleged that the social network’s “Sponsored Stories” violated California law by publicizing a user’s “likes” of different advertisers without their permission or without appropriate compensation.
The first proposed settlement was blocked by U.S. District Judge Richard Seeborg, who rejected it on the basis that it did not provide cash for the plaintiffs. The original agreement provided no money for class members. Instead, $10 million was to be given to charities involved in Internet privacy issues
The new agreement, which is subject to Seeborg’s approval, allows some of the settlement funds to go to charity, but only if there is money left after users’ claims are met. However, given the size of the class, which numbers 125 million as court documents show, the $20 million settlement will amount to less than 2 cents per class member. The agreement stipulates that if it is not economically feasible to pay all users, the court can set aside the entire fund for charities.
As part of both settlement proposals, Facebook agreed to give users more control over how their names and likenesses are used, and under the revised agreement, Faceboook will be required to provide new terms on targeting children.
“We believe the revised settlement is fair, reasonable, and adequate and responds to the issues raised previously by the court,” said Andrew Noyes, a Facebook spokesman, to Reuters on Monday.
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