Facebook $20m settlement over use of member’s data in targeted ads approved by US judge

A US judge has given final approval to Facebook's $20 million (£13 million) settlement of a lawsuit over the company's inclusion of users' data in targeted advertising.

Five claimants filed a class action case against the company in 2011, arguing that it was wrong for Facebook's 'Sponsored Stories' service to publicise the brands liked by users' on their friend's news feeds, without payment or enabling them to opt out.

A 'Sponsored Story' advert tells users' that certain friends already like an advertiser's brand or service and gives them the option to like it as well.

Under the terms of the deal, Facebook will pay $20 million (£13 million) in compensation, and said it will give users greater say in how their data is used and shared.

The payout fund will be distributed in cash payments of $15 (£10) to each Facebook member that submitted a valid claim.

Facebook made almost $234 million (£150 million) in advertising revenue through their 'Sponsored Stories' service between January 2011 and August 2012.

Child rights activists have said Facebook's assurances are not enough to ensure the privacy of children is protected and argue that those under 18 should not have any personal information handed to advertisers.

Judge Richard Seeborg said of the settlement that "while not incorporating all features that some of the objectors might prefer, has significant value."

"The settlement as a whole provides fair, reasonable, and adequate relief to the class, in light of all the circumstances, including the low probability that a substantially better result would be obtained through continued litigation," he added.

"Sponsored Stories, in Facebook's view, does nothing more than take information users have already voluntarily disclosed to their "friends," and sometimes redisplays it to the same persons, in a column that also contains more traditional paid advertising."