A U.S. Appeals Court on Thursday ruled in favour of Facebook
Inc (NASDAQ:FB), upholding the social network's $9.5 million settlement in a
class action suit that had claimed that the company's Beacon feature violated
privacy laws.
A Bloomberg report said that two appellate judges
agreed with a lower-court judge that the settlement amount isn’t too low. It
included about $3 million for the lawyers, lead plaintiffs and administrative costs.
The class action suit had been filed in 2009 on behalf
of 3.6 million Facebook users.
“A $9.5 million class recovery would be substantial
under most circumstances, and we see nothing about this particular settlement
that undermines the district court’s conclusion that it was substantial in this
case,” U.S. Circuit Judge Procter Hug Jr. said, writing for the majority.
The Beacon advertising program, which has been
discontinued, tracked users' purchase activities online and shared that
information with their friends online.
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At that time founder and chief executive Mark
Zuckerberg had apologised to users.
“We appreciate the Court of Appeals’ careful
consideration of this case, and are pleased that the panel affirmed the
district court’s ruling that the Beacon settlement is fair, reasonable, and
adequate,” Facebook Deputy General Counsel Colin Stretch said in an e-mailed
statement.
Shares in Facebook were trading up 1.13 percent at
$22.85 on the Nasdaq.
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