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Seth Rotherham
  • Facebook To Pay Millions of Users $5 Each, Or Nothing At All

    30 Jan 2013 by Jasmine Stone in Facebook, Social
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    A huge number of American Facebook users received an email recently that they probably deleted imagining it came from a cash-strapped Nigerian Prince, but the email promising them $10 was real.

    It is part of a settlement for a class-action lawsuit against Facebook after the Social Media behemoth used users photos in ‘sponsored stories’ without the users’ permission. Naughty Facebook.

    The Huffington Post reports that:

    Facebook used some users’ names and faces to advertise for products without asking for permission. As part of a preliminary settlement to the lawsuit (that has Facebook admitting no wrongdoing), anyone who was used without consent can join a a class action lawsuit to get that big, two-figure sum.

    The title of the email, “Re: LEGAL NOTICE OF SETTLEMENT OF CLASS ACTION,” would have sent most users of the internet running. All caps? Legalese? That’s a scam 99 times out of 100. This one, however, is for real. But as Facebook has around 165 million American users, and the amount the judge ordered Facebook to pay is only $20 million, how is this all going to be shared out? Forbes explains:

    If they all [Users who were sent the mail] wanted a piece of the full $20 million pie, they’d get 16 cent slices. If more than 4 million people claim their share, that would mean less than $5 each. And we can assume that the actual amount of money to be divvied up is going to be significantly reduced by the plaintiff’s class action lawyers taking a cut. In the website about the settlement, the lawyers suggest the amount left over after their fees is going to be $12 million. If 3 million people — or 2.4% of those that received the notice — apply for a piece of that amount, it’ll take the per-person payment below the $4.99 each threshold. Given that, it seems fairly likely this money is going to be split among non-profits — including the Center for Democracy and Technology, the Electronic Frontier Foundation, and the Berkman Center for Internet and Society (full list here) — rather than by users, meaning those 14 non-profits will get almost a $1 million each. That’s assuming that 99% of people who receive the email don’t just delete it as spam.

    Basically users are not going to get very much monetarily. The biggest win for Facebook users is that the company said it would engineer a new tool to enable users to view any content that might have been displayed in Sponsored Stories and then opt out if they desire, the court document says. So there’s that.

    [Source: Huffington Post, Forbes]

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