Judge rejects Facebook offer of $20m on 'Sponsored Stories' suit potentially worth $52.5b

http://www.bloomberg.com/news/2012-08-18/facebook-loses-bid-to-approve-sponsored-stories-suit-accord-1-.html

Facebook Inc. (FB), whose shares fell to a record low today, couldn’t persuade a judge to approve a $20 million settlement resolving a lawsuit over “sponsored stories” that provides cash for advocacy groups and attorneys and no money for users.

U.S. District Judge Richard Seeborg in San Francisco refused to grant preliminary approval of the accord, saying that while it isn’t feasible to divide $10 million among as many as 70 million affected customers, it isn’t sufficient to justify giving that money only to advocacy groups. Lawyers for customers had argued the groups would be “watchdogs” over Facebook.

... California laws outlawing using someone’s name or likeness in advertising without their consent provide damages of $750 a violation, Seeborg said. Lawyers for Facebook and customers argued that paying users cash isn’t practical because even paying each $10 could mean a $1 billion settlement, assuming 100 million users were affected, Seeborg said.

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70 million x $750 = $52.5 billion