Non-Profits to Reap $10 Million From Facebook Settlement [REPORT]

Privacy and consumer groups will pocket $10 million from the Facebook “Sponsored Stories” settlement once a Federal judge signs off on the deal.

Facebook reported in mid-June that it would be settling the lawsuit. However, initial reports did not detail which charities would be getting the $10 million.

This week, a new court motion revealed more than a dozen consumer rights groups — including Consumer Federation of America, Rose Foundation, Center for Democracy & Technology and the Stanford Law School Center for Internet and Society — will split the $10 million from Facebook. The initial report was published by Wired.

Many groups will receive $500,000 or $1 million each. This “charitable donation” is separate from the $10 million Facebook has to pay to cover legal fees.

The dispute started last year when five Facebook users sued the social network, under California jurisdiction, for using their photos and names in the Sponsored Stories ad program without proper consent.

Media outlets and Internet groups are questioning the good that will come from the Facebook payout. Those opposing this settlement believe the deal will do little to improve the privacy concerns at the root of this case.

“The proposed changes to the privacy agreement don’t serve the class.”Jeff Chester, executive director of the Center for Digital Democracy — uninvolved in the case — told Wired.

In the end — Facebook users do not get to opt out of the Sponsored Stories program, the settlement papers reveal.

Facebook will continue to use member check-ins and likes as paid advertisements for brand pages. Facebook, however, will have to amend its current policies and user terms stating when a member signs up for the platform that gives the company the right to use specific content for sponsored-story ads.

SEE ALSO: Facebook Should Offer Sponsored Stories on an Opt-in Basis [Op-Ed]

That means if you’ve ever “liked” Starbucks, the social network could use your likeness to sell a product to Starbucks friends.

The court documents state it doesn’t make sense to split the settlement among the millions of Facebook users affected. The motion proposes it does more good to reward the non-profit organizations presently fighting for consumer rights and privacy on the Internet.

“The facts of this case do not lend themselves to the distribution of an award of meaningful monetary relief to the individual Class members,” page 26 of the motion states.

Facebook has more than 153 million members in the United States. Among U.S. users, 51 million of them are minors. The motion reveals more than 100 million members’ names and likenesses have appeared in “Sponsored Stories.”

“The only real way to provide consideration with meaning for the class is to have Facebook provide funds…to groups whose charters set out actions and programs relevant to advocacy as to the purposes for which the case was brought,” page 27 of the settlement motion states.

Read the scanned court motion documents on Wired.

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SOURCE : http://feeds.mashable.com/~r/Mashable/~3/V8Qa-zVOIGQ/