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.