Facebook to pay $10 million in ‘Sponsored Stories’ settlement
Facebook has reportedly agreed to pay $10 million to settle a lawsuit concerning its Sponsored Stories advertisements.
The settlement brings an end to the suit that alleged Facebook’s Sponsored Stories benefited from its users’ “likes” without giving them compensation or a chance to opt out.
News that a settlement had been reached came in late May, but no details were given on how much Facebook would have to pay. The report that the social network would have to pay $10 million came this weekend.
The lawsuit was brought by five of Facebook’s users in 2011. If successful, it could have resulted in billions of dollars in loss for the social network, according to Reuters.
Sponsored Stories show up on Facebook for its users, showing them information taken from their friends. This information can include friends’ pictures, names and likes tagged to products and companies. The lawsuit called the advertisements a “misleading advertising scheme,” Bloomberg News reported.
The Associated Press reported that Facebook attorney Michael Rhodes confirmed the settlement on Sunday, saying that the $10 million will be given to charity.
However, a judge still needs to give approval to the deal.
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