Facebook pays $10 million to settle suit

John Moe Jun 18, 2012

The social media giant was the subject of a suit having to do with “sponsored stories” that appeared in users’ news feeds. Five plaintiffs argued that their having “Liked” a particular story was leveraged into advertisements using that story and because the users were not compensated for the usage, this was unfair. Big Face will donate the money to an unspecified charity and may be pretty glad to walk away with just this kind of fine since the suit could, in theory, have involved a lot more Facebook users, potentially one in three Americans, and billions of dollars.

From Reuters:

In the lawsuit, Facebook Chief Executive Mark Zuckerberg was quoted as saying that a trusted referral was the “Holy Grail” of advertising.
In addition, the lawsuit cited comments from Facebook chief operating officer Sheryl Sandberg, saying that the value of a “Sponsored Story” advertisement was at least twice and up to three times the value of a standard ad without a friend endorsement.

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