(Repeats for wider subscribers)
By Dan Levine
June 21 (Reuters) – Facebook Inc has agreed to allow
users more control over how their personal information is used
in its “Sponsored Stories” ad feature, part of a deal to resolve
litigation against the social networking company.
The potential loss of revenue to Facebook resulting from the
changes is the equivalent of about $103 million, in the opinion
of one economist hired by the plaintiffs.
A “Sponsored Story” is an advertisement that appears on a
member’s Facebook page and generally consists of another
friend’s name, profile picture and an assertion that the person
“likes” the advertiser.
Five Facebook members filed a lawsuit seeking class-action
status against the social networking site, saying it violated
California law by publicizing users’ “likes” of certain
advertisers without paying them or giving them a way to opt out.
Under the terms of a settlement agreement filed on
Wednesday, Facebook members will be able to control which
content can be used for Sponsored Stories. Facebook agreed to
maintain these changes and other new disclosures for at least
two years, according to court documents.
Attorneys for the plaintiffs say the changes to “Sponsored
Stories” are worth $103.2 million, based on an economist’s
analysis of the revenue each ad brings to Facebook. Those
revenue figures were redacted in the court documents.
A Facebook representative declined to comment, and an
attorney for the plaintiffs could not immediately be reached.
The settlement agreement must be approved by U.S. District
Judge Lucy Koh in San Jose, California. She must weigh whether
the deal’s terms adequately benefit class members.
Previous court filings had revealed that Facebook agreed to
pay $10 million to charity as part of the settlement deal. The
social networking company will also pay an additional $10
million for plaintiff attorneys’ fees, according to the court
documents.
The case in U.S. District Court, Northern District of
California is Angel Fraley et al., individually and on behalf of
all others similarly situated vs. Facebook Inc., 11-cv-1726.
(Reporting by Dan Levine in Oakland, Calif.; editing by Matthew
Lewis)
