Some Facebook users received a notice of a class action lawsuit over the weekend which offers to pay them up to $10 each.
The lawsuit is from Sponsored Stories ads. In 2011, five Facebook users filed the suit when Sponsored Stories was first launched. The feature includes users' names and profile pictures and places it next to ads from companies users have liked.
There is no way to opt out of it.
In order to settle the suit, Facebook offered to make changes to its service terms to clearly explain how Sponsored Stories works. It also is paying $20 million to a settlement fund.
The initial plan was to give the settlement cash to Internet privacy advocacy groups, but U.S. District Judge Richard Seeborg said some of the cash should go directly to users.
But since the class size is so big, approaching nearly 100 million people, cash payments would not be feasible.
The issue this presents appears to be a novel one, the judge wrote in August. Are some class actions simply too big to settle?
They then revised their plan and decided to give class members the option to receive up to $10 each from the fund. But the more people that choose to submit claims, the less money there is to receive.
The plaintiffs' lawyers fees will be deducted from the $20 million. It's too soon to tell how much they will get, but the lawyers have asked for $7.5 million and $283,000 in expenses. After these payments are deducted, the remainder will go to Facebook users who have made claims.
Users who received an email about the settlement have until May 2, 2013 to decide if they want to submit a claim.
