Social networking website and service Facebook said it has decided to pay $10 million to the charity to settle the lawsuit that blamed the site of violating users’ rights to control the use of their own names, likeness and photographs, the news reports said.
The lawsuit which was brought by 5 Facebook members contended that the social networking site violated the law of California by publicizing users likes of certain advertisers on its sponsored stories features without paying them or giving them a way to opt out.
The sponsored story is an advertisement which appears on the Facebook page of the members. It also consists of another friend’s name, profile picture and the assertion that the person likes the advertiser.
Last month, the settlement was reached and made public this weekend, but Facebook did not wish to say a word.
The proposed class-action lawsuit filed in federal court in California in Sanjose could have included nearly one of every three Americans with billions of dollars in damages.
In the lawsuit, Facebook Chief Executive Mark Zuckerberg said that a trusted referral was the Holy Grail of advertising.
The lawsuit also stated comments from Facebook Chief Operating Officer Sheryl Sandberg who said, “The value of a Sponsored Story advertisement was atleast twice and up to three times the value of a standard Facebook.com and without a friend endorsement.”
The settlement arrangement is known as a cy-press settlement which means the settlement funds can go to charity.
Facebook is a social networking service and website introduced in February 2004, which is owned and operated by Facebook Inc. As of May 2012, Facebook has more than 900 million active users and more than half of them use Facebook on the mobile device.
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