Facebook Inc. has proposed a revised $20-million U.s. settlement in a class-action lawsuit, accusing it of violating the rights of users through its "Sponsored Stories" advertising feature, after a U.S. judge rejected an earlier accord.
The new settlement agreement, filed Saturday in U.S. District Court in San Francisco, drops provisions setting aside up to $10 million U.S. for plaintiffs lawyers' fees and allows users to apply for a cash payment of up to $10 U.S. each.
U.S. District Judge Richard Seeborg rejected an initial settlement proposal on August 17 after questioning why the agreement provided no cash for Facebook users.
The initial agreement provided no money to class members and instead set aside $10 million to be given to charities involved in Internet privacy issues.
The new agreement, which is also subject to Seeborg's approval, allows for some of the funds to go to charity, but only if there is any left after users' claims, attorneys fees and other expenses are met.
But given the size of the class, the charities might still get some cash. The agreement provides that, if it is not economically feasible to pay all the users a cut, the court may designate the entire fund as going to the charities.
The proposed settlement covers nearly 125 million people, court documents show. The $20 million U.S. equates to less than two cents per class member.
Filed in 2011, the lawsuit alleged that the social networking site's "Sponsored Stories" feature violated California law by publicizing users' "likes" of advertisers without any compensation or a way to opt out.
As part of both settlement proposals, Facebook also agreed to give users more control over how their names and likenesses are used.
Facebook's revised agreement also provides new terms on targeting children.
The social network said it agreed to encourage new users to designate who else on the site is a member of their family. Parents will be able directly to have their children opt out of the "Sponsored Stories" feature once their relationship to the child is confirmed.
Facebook also now has a right to object to plaintiffs lawyers' fee applications, unlike the earlier settlement agreement. It was unclear how much the plaintiffs lawyers would seek with the new settlement.
Facebook shares closed at $20.40 U.S. on Monday, down about 2.4%
