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Judge OKs Facebook’s revised privacy settlement

First proposed settlement was rejected in August

Facebook Inc. is one step closer to ending its ongoing class action suit involving its use of users’ information in Sponsored Stories.

Yesterday, U.S. District Judge Richard Seeborg gave the initial thumbs-up to Facebook’s revised settlement, after rejecting a previous version in August partly because it did not offer Facebook users compensation. In his ruling yesterday, however, Seeborg said the new settlement "falls within the range of possible approval as fair, reasonable and adequate."

The revised $20 million settlement gives Facebook users the option to claim $10 each. Any remaining funds will go to charity. As part of the settlement, the social media giant will also add a tool to the site that will allow users to view content that would have been previously displayed in Sponsored Stories and opt out if they wish.

If the settlement receives final approval, it will bring to an end the 2011 privacy suit Facebook users brought against the company. In that suit, five Facebook users claimed the site violated California law when it publicized their “likes” of advertisers on Facebook’s Sponsored Stories section without offering them compensation or an opt-out. The Sponsored Stories section shows up on Facebook users’ main pages, and displays advertisers and names of friends who “like” them, as well as their profile pictures.

Read more InsideCounsel stories about Facebook’s legal issues:

Paul Ceglia arrested for alleged Facebook fraud

Facebook offers to pay users in “Sponsored Stories” settlement

University of California hits Facebook, Wal-Mart and Disney with patent suit

Judge recuses herself in Facebook privacy suit

Facebook will pay $10 million to charity to settle suit

Investor sues Nasdaq over Facebook IPO

Facebook users sue company for $15 million

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Cathleen Flahardy

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