Earlier this year, we analyzed some privacy considerations with a class action lawsuit against Facebook accusing the social media giant of violating the rights of users through its “Sponsored Stories” advertising program. Per the Complaint, Facebook would not only display such ads, but would also use the “names, photographs, likenesses, and identities” of Facebook users to help promote the product to friends of those users. The Complaint alleged that a user would be associated with a product by choosing to click a “Like” button, and would then be automatically associated with the corresponding ad campaign, without compensation and allegedly without the user’s consent.
A lot has happened since then. Back in May, Facebook announced a proposed settlement. That settlement was eventually rejected by the court in August. Under the rejected deal, Facebook would have given users more control over how their “Likes” were used and would have allowed users under 18 years old to opt out of the program. It also provided for a total of $20 million in payment – $10 million to the plaintiffs’ attorneys and $10 million to nonprofit privacy groups such as the Electronic Frontier Foundation, but no payment to class members. In rejecting the settlement, the judge said that plaintiffs’ lawyers “may have bargained away something of value to the class,” and that the amount of the payout “was merely plucked from thin air.” He also questioned why no money was going directly to Facebook users.
A revised proposed settlement has now been filed with the court. The new settlement offers to split the $20 million differently. Most notably, it would allow Facebook users to make individual claims for $10 each. Afterwards, any remaining amount would be disbursed to plaintiffs’ lawyers and the nonprofit groups. The filing does not specify how plaintiffs’ lawyers’ fees will be calculated. The filing also states that the proposed settlement covers nearly 125 million Facebook users. You do the math. Divide the $20 million evenly among the 125 million class members, and you’re left with 16 cents per class member. And that’s assuming the lawyers get nothing. We’re not sure how that all adds up.
It will be interesting to see if the court once again finds issues with the proposed settlement. We’ll be monitoring this case closely to see if this settlement is approved by the court.