Facebook settlement over ad feature rejected in court

  • A U.S. judge has rejected Facebook’s proposed legal settlement over allegations that the social networking website violated its members' rights through its 'Sponsored Stories' advertising feature.

    In an order on Friday, U.S. District Judge Richard Seeborg listed numerous concerns with the proposed settlement, including a request for more information on why the agreement does not award money to members.

    "We continue to believe the settlement is fair, reasonable, and adequate," a Facebook spokesman said in a statement. "We appreciate the court's guidance and look forward to addressing the questions raised in the order."

    Five members filed a lawsuit seeking class-action status against Facebook, saying its Sponsored Stories feature violated California law by publicizing their "likes" of certain advertisers without paying them or allowing them to opt out.

    As part of the proposed settlement, Facebook agreed to give members more control over how their personal information is used.

    Facebook also agreed to pay $10 million for legal fees, along with giving $10 million to charity.