Facebook settlement could bring you a few bucks

January 30, 2013

Facebook settlement could bring you a few bucksAround 125 million Facebook users are getting an e-mail offering them free money. It’s not a scam, but it’s about as likely to make you rich as a Nigerian lottery spam.

As we’ve previously covered, Facebook was successfully sued in California for violating a state law that prevents a firm from using a person’s image in advertising without permission. Facebook did exactly that by showing “sponsored stories” that featured a person’s name and profile picture and an endorsement based on the fact that they had “liked” or otherwise interacted with a brand, product or company.

After a lengthy negotiation process, Facebook finally agreed to a settlement that met with the court’s approval. Those affected — most but not all Facebook users in theUS– are now getting an e-mail, and thankfully the person sending it didn’t mistakenly “cc” the entire sender list.

If you’re serious about getting compensation over the issue, you do need to take action. The class action status means that if you don’t do anything, you give up any claim against the company.

Instead your main choices are to submit a claim under the settlement or to reply and formally exclude yourself from the settlement, leaving you able to sue Facebook yourself. Both of these have to be done by May 2.

If you really want to be obstinate you can also protest against the entire settlement, either in writing (by May 2) or in person at a hearing on June 28. Bear in mind that by doing so you could piss off 125 million people.

Making the claim is likely going to be your best bet at picking up some cash, but the compensation will be somewhere between slim and none. Facebook will hand over $20 million to the court, which will then deduct legal fees (which the lawyers reckon will be about $7.73 million.) That’s a reversal of the original plan, by which the compensation was paid first and then the lawyers got the scraps. No prizes for guessing who lobbied for that change.

Whatever’s left is then split between everyone who makes a claim. There’s a maximum payout of $10, so no chance of a jackpot if you are the only one who bothers. However, if the amount per person works out as “economically infeasible to pay”, the whole lot goes to non-profit groups that work on promoting privacy and safe use of social media.


Exactly what this lower limit is hasn’t been made clear, though Forbes speculates that it could be $5. In other words, if more than 2.5 million of the 125 million eligible claimants say yes to free money, nobody’s getting anything.

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