Facebook might pay users in class action lawsuit

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Facebook might pay users in class action lawsuit
FILE - In this May 18, 2012 file photo provided by Facebook, Facebook founder, Chairman and CEO Mark Zuckerberg, center, rings the Nasdaq opening bell from Facebook headquarters in Menlo Park, Calif. Years of anticipation led to Facebook's initial public offering of stock in 2012, the hottest Internet IPO since Google?s in 2004. Many of the 1 billion-plus users of the world?s largest online social network craved a chance to buy in early. On the eve of its first trading day, Facebook?s market value was $105 billion, yet the IPO bombed. (AP Photo/Nasdaq via Facebook, Zef Nikolla, File)

Facebook might pay users who are part of a current class action lawsuit over its sponsored stories. Facebook has promised to pay $20 million, but not everyone may end up with a payment. The last day to file a claim is May 2. However, users are not likely to get big checks from the settlement. It is estimated that the actual payment per person may be about $10.

The class action lawsuit stems from a case from April 2011. Several Facebook users filed the lawsuit because the company was using their pictures in sponsored stories. Images of users with their names were being included in these promotional features without their consent. This is all tied to brand advertising because companies could use pictures of your friends who had liked their pages in these sponsored stories. Facebook initially promoted the idea as a way to connect to brands that your friends already liked. The only problem was that they did not ask for permission to use people’s information in the stories.

“Facebook has made some adjustments to the sponsored stories feature. In addition, it agreed to pay $20 million in the class action lawsuit. Users should get a portion of the settlement, but the amount they receive may be small. It is estimated that 100 million may qualify for the settlement, and most of them have not signed up at this point. With several months left before the deadline of May 2, users still have time to join.

“Analysts have pointed out that the settlement comes with a catch. As more users sign up before the deadline, the less money each one will receive since the total amount available has to be distributed evenly. Although each person could end up with $10, it is also possible they may end up with as little as $1 or even nothing. If the court determines that there are too many people for a fair distribution, then all the funds could go directly to charity. Facebook will get to decide which nonprofit organizations benefit, and it is expected that Internet privacy groups will be at the top of the list.

“Lawyer fees are also expected to make a large dent in the amount of money available for the settlement. As much as $8 million of the $20 million total could go to the attorneys. The final hearing, scheduled for June 2013, will determine how much the lawyers will receive.


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