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Home » Facebook to Pay $10 Million to Settle Sponsored Stories Suit

Facebook to Pay $10 Million to Settle Sponsored Stories Suit

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Reuter reports Facebook has agreed to dish out a whopping $10 million to settle a lawsuit over ads brought by five people who claimed their faces and images were used in Sponsored Stories ads. Facebook, however, is not paying back to the five Facebook users from California who claimed the social networking giant has violated the California law and their right to privacy by openly publicizing their ‘likes’ in the sponsored advertorial like content ‘sponsored stories’. Facebook has chosen to pay $10 million to charity.

The verdict is seen as yet another blow to Facebook, which since its disastrous public offering last month is sailing through rough water. Off course, it does not want to open the Pandora ’s Box wherein millions of users suddenly dream of becoming millionaires just by suing it for the sake the ‘privacy breach.’ The proposed class action suit could have included as many as one in three Americans, with billions of damages.  

The lawsuit saw Mark Zuckerberg saying that a trusted referral was the ‘Holy Grail’ of advertising. chief operating officer Sheryl Sandberg is of the belief that the “value of a ‘sponsored story’ advertisement was at least twice and up to three times the value of a standard Facebook.com ad without a friend endorsement.” Sponsored ads are more successful than other Facebook ad units and notch 46% higher CTR.

 

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