Facebook’s Sponsored Stories Lawsuit May Be Coming to a CloseBy: Josh Wolford - November 19, 2012
Facebook may finally be able to close the books on a long-running lawsuit that saw the company accused of major privacy violations corresponding to their Sponsored Stories initiative.
Reuters reports that U.S. District Judge Richard Seeborg was “much less critical” of Facebook’s revised proposal and said that he would issue a ruling “very shortly.”
Back in August, Judge Seeborg rejected Facebook’s original settlement offer. The suit, which centered around Facebook’s use of users’ likeness in Sponsored Stories, was settled out of court by Facebook and the handful of California plaintiffs who originally brought the suit. Facebook agreed to pay a $10 million cy pres settlement to charity, with an additional $10 million going to any leftover legal fees.
As a part of that agreement, Facebook also agreed to make some changes to their Sponsored Stories program – first and foremost increasing the visibility of information on the site. They also agreed to allow users to control their past activities and how they appeared in Sponsored Stories, as well as to let minors completely opt out of the program.
In his denial, Judge Seeborg cited concerns about the size of the cy pres payment as well as the fact that no money was directly going to users (per class action status).
“California Civil Code §3344, however, under which plaintiffs’ claims are brought, provides for statutory damages of $750 for any violation. It very well may be, as Facebook argues, that plaintiffs’ chances of obtaining a judgment awarding such statutory damages to class members are remote, but their potential availability must be considered in evaluating the fairness of any settlement. Merely pointing to the infeasibility of dividing up the agreed-to $10 million recovery, or the relatively small per-use revenue Facebook derived, is insufficient, standing alone, to justify resort to purely cy pres payments,” he said.
Facebook then revised the settlement to allow users to apply for up to a $10 settlement, with any remaining funds (from the $20 million pool) going to charity.
“Trust me, I’m not proposing to set grand policy with privacy issues writ large,” said Seeborg.