US judge gives initial OK to revised Facebook privacy settlement

A US judge has given his preliminary approval to a second attempt by Facebook to settle a class action lawsuit which charges t h e social networking company with violating privacy rights.

US District Judge Richard Seeborg in California rejected a settlement in August over Facebook’s ‘Sponsored Stories’ advertising feature, questioning why it did not award money to Facebook members for using their personal information, says Reuters.

But in a ruling handed down Monday, Seeborg said a revised settlement “falls within the range of possible approval as fair, reasonable and adequate.”

In a revised proposal, Facebook and plaintiff lawyers said users now could claim a cash payment of up to $10 each to be paid from a $20 million total settlement fund. Any money remaining would then go to charity.

The company also said it would engineer a new tool to enable users to view content that might have been displayed in Sponsored Stories and opt out if they desire, a court document said.

If it receives final approval, the proposed settlement would resolve a 2011 lawsuit originally filed by five Facebook members.

The lawsuit alleged the Sponsored Stories feature violated California law by publicising users’ “likes” of certain advertisers without paying them or giving them a way to opt out.

The case involved over 100 million potential class members.

A spokesman for Facebook said the company was “pleased that the court has granted preliminary approval of the proposed settlement.” Lawyers for the plaintiffs weren’t immediately available for comment Monday evening.

Outside groups and class members will have a chance to object to the latest settlement before Seeborg decides whether to grant final approval. A hearing on the fairness of the deal has been set for June 28, 2013. 

Meanwhile, dpa reports Facebook on Monday invited users to cast their votes on proposed changes to the social networking site's policies, including whether future changes to privacy guidelines should be subject to user approval.

In a post on its website Facebook said that the results of the week-long voting period would be binding if more than 30% of the company's 1 billion members cast ballots.

In a blog post in November the company said that it was reversing its 2009 policy whereby it promised to hold a vote on any site governance policy if any proposed change received more than 7,000 substantive comments. Under that policy Facebook agreed to be bound by the results of any vote if more than 30 per cent of all active users participated.

Facebook communications chief Elliot Schrage said the change was needed because the old rules encouraged a deluge of low-quality comments that did not necessarily represent the widespread opinion of Facebook users.

"Therefore, we're proposing to end the voting component of the process in favour of a system that leads to more meaningful feedback and engagement," Schrage said.