Facebook Settles Lawsuit For $10 Million

MENLO PARK (CBS/AP) — Facebook is paying $10 million to settle a lawsuit over ads that it called sponsored stories.

Facebook’s service allowed companies to pay to retransmit users’ activities to their friends’ pages. If a user clicked the “like” button for a brand, the click might show up as a “sponsored story” on friends’ pages. The ads started in early 2011.

Some Facebook users sued, saying that Facebook used their images for commercial activity. Facebook had argued that the plaintiffs did not show they were hurt by the practice.

Court documents from late last week say a settlement has been reached. Facebook attorney Michael Rhodes confirms Sunday that it’s for $10 million, which will be given to charity. A judge still needs to approve the settlement.

Reuters first reported details of the settlement.

(Copyright 2012 by CBS San Francisco and Bay City News Service. All rights reserved. This material may not be published, broadcast, rewritten or redistributed)

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