Digital Life & Learning: Law Corner

Facebook Offering $20 Million Settlement To Its Users

Adrianne Parkmon

Post University

Are you one of the 100 million people in the world who use Facebook? Well, you may be entitled to $10.00. As a result of a class action lawsuit, Fraley, et al. v. Facebook, Inc., et al., Case No. CV-11-01726 RS, the social media giant offered to create a $20 million fund and implement a few reforms to settle the case. Millions of Facebook users received an email last month notifying them that they may have been featured in a “sponsored story” and thus may be a Class Member of the class action lawsuit. (Mello, Jr., 2013)

In 2011, Facebook user Angel Fraley claimed Facebook “unlawfully” obtained user profile content without informed consent (or in the case of minors, parental consent) to sell products or services through its sponsored stories ads. Sponsored stories are a form of advertising that typically contains posts which appear on about or from a Facebook user or entity that a business, organization, or individual has paid to promote so there is a better chance that the posts will be seen by the user or entity’s chosen audience. If a Facebook user has ever interacted with a Facebook widget, application or game an ad will appear in the user’s sidebar. The ad includes a picture of the Facebook user and an endorsement such as “Adrienne likes”

The proposed $20 million dollar fund will be used to pay members up to $10.00 as part of the settlement. Since potentially 100 million users may be deemed Class Members, the fund would be exhausted after the first 2 million users receive a payout. (Hill, 2013) In this case an alternate distribution scheme has been proposed by Facebook. Mark Zuckerburg, CEO of Facebook will divide the money among nonprofits involved in education and outreach that teaches adults and children to use social media technology safely or are involved in research related to social media.

Another proposed Facebook fix is allowing users the option to block who can see their activity, thus giving users the control over who can view the Sponsored Stories. (Note: Facebook will not allow users to “opt out” of being featured in ads)

Judge Richard Seeborg, U.S. District Judge on the U.S District Court for Northern California has given preliminary approval to the proposed settlement, so by all means read the legal notice and become a class member but you may want to hold off on making plans to spend that $10.00.


Mello, Jr., John P (2013), PCWorld, Facebook Legal Notice Could Get You Cash, So Don’t Trash It

Retrieved from:

Hill, Kashmir (2013), Forbes, Yes That Legal Notice You Got From Facebook Is Real

Retrieved from:

Dye, Jessica (2012), Reuters, Judge Gives Initial OK to Revised Facebook Privacy Settlement

Retrieved from: