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October 9, 2012

Facebook renews bid to end ‘sponsored stories’ lawsuit

The new agreement excludes $10m payment in lawyer fees

By CBR Staff Writer

Facebook has renewed its attempt to settle its ‘sponsored stories’ class action lawsuit in the US by proposing to pay a revised amount of $20m to end a case filed against the social networking site for violating the privacy of users through its "Sponsored Stories" advertising feature.

Facebook has filed the new settlement agreement with US District Court in San Francisco, US excluding $10m payment in lawyer fees while the members of the class who filed case against the social network last year can claim a cash payment of up to $10 each.

Earlier the company had attempted to settle the case, but US District Judge Richard Seeborg rejected the settlement in August.

The social network in its earlier agreement did not have any provision to pay the class members and instead proposed to give $10m to charities working in Internet privacy issues.

In the new agreement which is subject to approval from the Judge, has a provision to set aside some money to charity organisations, but it will be provided after paying users’ claims, lawyer fees and other expenses.

Last March the case was filed against Facebook alleging that the social network checking into a location on Facebook, or using a "Like" button on the site which would force the users to participate in Sponsored Stories advertising.

Sponsored Stories advertising was the first used by Facebook on mobile devices and according to court document the settlement involve about 125 million users.

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Facebook spokesman Andrew Noyes said: "We believe the revised settlement is fair, reasonable, and adequate and responds to the issues raised previously by the court."

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