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Facebook Settles Class-Action Lawsuit for $20 Million
Author: Scarinci Hollenbeck, LLC
Date: February 4, 2013
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Members represented in a class-action lawsuit against social media giant Facebook may be entitled to a $10 payout after the networking site agreed to a $20 million-dollar settlement.
The class-action lawsuit revolves around Facebook’s use of members’ names, photos, likenesses and identities in sponsored ads without their permission. This scenario became an issue when the website went public, and members started inquiring about when they would receive payments for Facebook’s use of their information. The social networking site consequently agreed to settle the matter for $20 million outside of court.
While Facebook agreed to the settlement – which may boil down to a payout of $10 per member affected by the lawsuit – some analysts say that many members may be unaware of their rights or of the business law issue itself. Many users may have received an email message from individuals claiming to be part of Facebook’s legal team, and automatically theorized that the content was spam and deleted it. However, the message coming from legalnotice@facebookmail.com is a valid notification that alerts affected members of the settlement and provides instructions on how to claim a portion of the proceeds.
There is one catch, however, that may limit members from receiving their share of the payout. Facebook stipulated in the settlement agreement that if too many people submitted claims for the $10, it would donate the entirety of the funds to charity. While Facebook did not provide a concrete number outlining how many claims is too many, it released a statement explaining that as soon as it becomes “economically infeasible to pay money to persons who make a timely and valid claim,” the whole of the funds would be donated to a not-for-profit organization.
- Industries: Entertainment & Media
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