Facebook to pay out $20m in privacy settlement

PALO ALTO, CA: Facebook will pay $20 million in a settlement over a privacy battle about users "likes" being used as endorsements for sponsored ads without their permission.

PALO ALTO, CA: Facebook will pay $20 million in a settlement over a privacy battle about users "likes" being used as endorsements for sponsored ads without their permission.

An estimated 150 million users were featured within Facebook's Sponsored Stories, but only 164,000 will receive the payout because they had to email to opt in earlier this year.

Each user will receive $15 as compensation, and privacy companies will also receive part of the settlement.

A Facebook spokesperson confirmed the figures and told MediaWeek that “we are pleased that the settlement has received final approval.”

The lawsuit began in 2011 after a class action group claimed Facebook's Sponsored Stories violated its privacy by taking a user's "likeness” to endorse products without obtaining permission or paying for them.

The Sponsored Stories published the name and image of users' friends who had interacted with the brand paying for the ad.

An earlier settlement, also for $20 million, was rejected because it did not allocate any of the payout to affected users, offering instead to pay $10 million to organizations to educate people about how to use social media networks safely.

As part of the ruling, Facebook will also have to make changes to its statement of rights, explore how to make its controls more upfront and accessible, and give more information and control about how users' details are used in future.

This story originally appeared on the website of MediaWeek.

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