Facebook Inc (NASDAQ:FB) can’t avoid taking a look at user privacy concerns
On Monday, A United States Judge granted the final approval to Facebook Inc (NASDAQ:FB)’s $20M lawsuit settlement over some targeted advertising. There had been strong objections against it that the deal did not do as much as it could to protect the privacy of children. In 2011, 5 plaintiffs had filed a case against the company.
Their allegation was that FB’s “Sponsored Stories” program shared some user “likes” of advertisements without giving them the functionality to opt-out. Users had also not been paid for this. A “Sponsored Story” is essentially an advertisement that features the FB page of users. It will have a friend’s name, the profile picture as well as a statement that says that that person “likes” that particular advertiser.
There has always been some tension around privacy concerns and that the company has been trying to monetize their user content. Under the terms of this settlement, the networking giant will now have to pay $20M to compensate their class members. In addition, they will have to provide users with added control over the manner in which their content gets shared. Plaintiff’s lawyers say that these specific changes will cost the company approximately $145M.
The court filing shows that FB charged the advertisers almost $234M for the “Sponsored Stories” from 2011 January-2012 August. Child rights advocates had staunchly argued that information of users who are minors, should not be shared with any advertisers.
In separate news, FB is has been forging ahead post its most recent earnings-report. Now the company’s market cap stands above $100 billion. In Friday’s trading session, Facebook stock rose by 1.95%. The opening price of the shares was $40.90 which touched an intraday high of $41.95 and closed at $41.34. More than 94.16 million shares were traded in Monday’s session while the average volume of shares sold over 30 days was 4.53 million.