Facebook to pay $10 million to charity

Facebook Inc has agreed to settle a California lawsuit by paying $10 million to charity. Facebook was accused by five Facebook members of violating user rights in terms of them not having full control of their own names, photographs and likenesses.

Facebook publicised users' "likes" of certain advertisers on its "Sponsored Stories" feature without paying them or giving them a way to opt out, reports Reuters. A "Sponsored Story" is an advertisement that appears on a member's Facebook page and generally consists of another friend's name, profile picture and an assertion that the person "likes" the advertiser. If the case would have developed into a large scale class action, it would have involved nearly one third of Americans.

US District Judge Lucy Koh said the plaintiffs had shown economic injury could occur through Facebook's use of their names, photographs and likenesses.

The settlement arrangement is known as a cy-pres settlement, meaning the settlement funds can go to charity.

The case, Angel Fraley et al., individually and on behalf of all others similarly situated vs. Facebook Inc., 11-cv-1726, was heard in US District Court, Northern District of California.