Facebook Inc(NASDAQ:FB)’s innocuous `Sponsored
Stories' feature is proving to be costing the company millions of dollars in
legal suits and pay-outs.
Sponsored Stories is just an unobtrusive form of advertising
where uses see their friends like a certain product or page and may also be
induced to like and click on those ads.
However some users have seen it as an invasion of
their privacy as their names and photos have been used in the `Sponsored
Stories'. Class action suits have been filed and the company’s efforts to
settle them have not been successful.
The social networking site has offered to make its
settlement terms more attractive and compensate millions of users whose names
and pictures have been used in the Sponsored Stories ad with $10 each.
Earlier this year it offered a settlement with a $10
million pay-out in plaintiff lawyers fees and another $10 million in
contributions to a dozen research and advocacy groups. The settlement amounts
were however rejected by U.S. District Judge Richard Seeborg who wanted to know
how the amount was arrived at.
The revised settlement was filed Saturday and was
first reported by Reuters on Monday.
It offers to split the $20 million differently.
According to the report - "It would allow users to lay claim first - for
$10 apiece. It would then disburse the remaining amount to plaintiffs’ lawyers
and privacy-related charities. The court filing does not explain how the
lawyers’ fees will be calculated. It indicates that 125 million Facebook users
have been affected by the practice."
The next hearing on the matter is fixed for October
25.
No comments:
Post a Comment