Judge Rejects Facebook "Sponsored Stories" Settlement Offer As Stock Price Plummets
August 20, 2012 10:15 AM
comment(s) - last by
Facebook has definitely seen better days
Facebook has been fighting a lawsuit over its "Sponsored Stories" advertising feature. The company
previously offered to settle the suit for $10 million
, which would be given to charity. However, U.S. District Judge Richard Seeborg has listed concerns with the proposed settlement and issued a request for more information on why the agreement doesn't award money to social network members.
Judge Seeborg stated that Facebook and attorneys for the plaintiffs could modify the proposed settlement to address his concerns.
"We continue to believe the settlement is fair, reasonable, and adequate," a Facebook spokesman said in a statement. "We appreciate the court's guidance and look forward to addressing the questions raised in the order."
was originally filed by five different Facebook members who claim that the Sponsored Stories feature violated California law by publicizing the "likes" of users without paying the user or giving them away to opt out. The case covers 100 million potential class members.
Part of the Facebook proposed settlement included ways for users to have more control over how their information is used. In addition to the $2 million to be paid to charity, Facebook also agreed to pay $10 million for legal fees.
While Facebook reconsiders its settlement offer, the company stock is plummeting after its IPO brought such high hopes for investors. The company stock recently fell to half its IPO price. As of this morning, Facebook stock is
trading below $18 per share
, half the IPO market value in May.
This article is over a month old, voting and posting comments is disabled
RE: Cause of the problem
8/20/2012 11:06:03 AM
I agree with you, but to be fair the settlement was offered by Facebook and was a business decision. They want this to go away as quickly as possible and are willing to buy off the lawyers, which is probably the quickest/cheapest way. The gift to charity was probably a way to make the lawyers seem like wankers if they didn't accept the offer.
Like virtually all class-action suits the lawyers walk away with most of the money and a pittance is given to consumers. Most consumers don't even bother to collect it since the amounts are so small and the money goes back to the lawyers.
Class action lawsuits have become a huge money maker for big law firms well versed in them.
RE: Cause of the problem
8/20/2012 12:15:57 PM
In your typical class action, the lawyers get paid a few millions, the lead plaintiff (or plaintiffs) get around $50k, and then everyone else gets a near-worthless amount, and usually not even in monetary form.
For example, most class actions against cellular phone carriers result in the participants being awarded a certain amount of free airtime, instead of a check in the mail. The lead plaintiff still gets a handsome sum, and the lawyers make out like bandits of course.
We don't have a Justice system; we have a Legal system. And yes it does seem to exist purely for its own sake these days, sadly enough.
RE: Cause of the problem
8/20/2012 1:42:21 PM
Here is the original judgement:
If Facebook took this case all the way and lost they could be on the hook for up to $750/person defined in the class action, which equates to a possible maximum liability of $75B. That's why they settled; risk mitigation.
The charity was not defined but had to be some type of mutually agreed upon advocacy group whose business related to the charges being brought.
"The Space Elevator will be built about 50 years after everyone stops laughing" -- Sir Arthur C. Clarke
Facebook Must Pay $10M for "Sponsored Stories" Lawsuit Settlement
June 18, 2012, 11:40 AM
Google Knocked by Analysts, But Shows Strokes of Brilliance in Q1 2014
April 18, 2014, 2:33 PM
Google Street View and reCAPTCHA Get Smarter with New Algorithm
April 17, 2014, 9:02 AM
Mt. Gox CEO Refuses to Come to the U.S. in Financial Crimes Probe
April 16, 2014, 3:50 PM
Mark Zuckerberg: Facebook Home Reception Slower than Expected, Social Graph Will Pick Up
April 16, 2014, 2:00 PM
FBI's Facial Recognition Database to Have 52 Million Criminal, Non-Criminal Photos by 2015
April 15, 2014, 2:56 PM
Microsoft's Anti-Google "Scroogled" Campaign May Have Ended
April 15, 2014, 2:44 PM
Most Popular Articles
Cities to Carpoolers: Sharing Your Car is Illegal, We Will Seize Your Cars
April 4, 2014, 9:17 PM
iPad Exploiter is Freed by Federal Appeals Court
April 11, 2014, 7:40 PM
A-10 Warthog May Live to Fight Another Day with Support from Lawmakers
April 14, 2014, 9:41 AM
Taiwan's AOU Claims to Have World's Highest-Res. OLED Smartphone Display
April 11, 2014, 1:44 PM
EFF: NSA May Have Used IRC Botnets to Exploit Heartbleed for Last Two Years
April 14, 2014, 4:43 PM
Latest Blog Posts
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
Global Cyber Espionage Concerns Reveal Growing Cyber Armies
Nov 29, 2013, 11:04 AM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information