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Judge tosses Facebook sponsored stories settlement
Facebook and a group of its users agreed to a $10 million settlement in a privacy violation case, but a federal judge has ordered the parties to go back to the drawing board.
Judge Richard Seeborg ruled that the groups have to justify why $10 million is an appropriate amount to settle the class-action lawsuit. The groups could come back with a new figure or they could try to provide better justification for the $10 million settlement.
The plaintiffs sued Facebook because the site used their names and profiles in sponsored stories without their permission.
California law requires that companies pay $750 if they misuse a person's likeness. The class action lawsuit could cover about 70 million people.
Judge Seeborg noted that the plaintiffs might not receive $750 per user if the case went to trial, but he said they would have to do a better job articulating why a much lower figure is appropriate.
The $10 million figure amounts to only pennies per user, so Facebook would donate the money to charities rather than trying to write checks to every user who had their identity misused.
The judge also questioned whether it is appropriate that the lawyers for the plaintiffs will receive an additional $10 million in the settlement. He noted that Facebook had agreed to pay a total of $20 million to resolve the case, and he expressed concern that the lawyers might have bargained away some of the money that would have otherwise gone to their clients.
A Facebook spokesman said the company still believes that the $10 million settlement is "fair, reasonable, and adequate."
"We appreciate the court’s guidance and look forward to addressing the questions raised in the order. We are confident we can address the issues raised by the court without substantially revising the settlement," the spokesman said.
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