Facebook settles Sponsored Stories suit for $10 million

June 18, 2012

Facebook will pay $10 million in a settlement over its “Sponsored Stories” feature, which had some users up in arms about their privacy.

Details about Facebook’s settlement with users over the social network’s use of personal photos and “likes” emerged Saturday. As the Associated Press reported, some users said that Facebook has used their images for commercial activity. The social network said that the plaintiffs did not show that they were hurt by the feature.

The suit was settled last month, but the terms were not made public until recently.

According to Facebook’s help center, users cannot opt out of being featured in Sponsored Stories, but can configure their privacy settings to make sure they’re only sharing information about their “likes” with the people they find appropriate.

“Sponsored Stories respect your privacy settings. This means only the people you’re already sharing your activity with on Facebook can see Sponsored Stories about you,” the company’s FAQ says.

Facebook is also facing around 40 lawsuits related to its initial public offering — cases that the company has moved to consolidate in the Southern District of New York. The cases deal with losses related to the debut, both as a result of the technical problems the Nasdaq had on the morning the stock began trading and over allegations that select investors received secret information about the company’s profit forecasts.

Last week, a judge in Texas dismissed a challenge against Facebook, the AP reported, saying that the shareholder who brought the claim should do more research before bringing his complaints to court.

(Donald E. Graham, chairman and chief executive of The Washington Post Co., is a member of Facebook’s board of directors and is named as a defendant in the consolidation filing.)

Related stories:

Facebook CTO Bret Taylor leaving for start-up

Facebook moves to consolidate cases

Secretive Samsung denies plans for Facebook-like service

Hayley Tsukayama covers consumer technology for The Washington Post.
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