facebook pays $20m settlement after social advetising backfires

Facebook has agreed to pay $20m to settle a class action lawsuit, after it included users’ names and photos in paid advertisements.

Some 614,000 users who appeared in a Sponsored Story on the site without giving their consent will now receive $15 each. That’s slightly more than anticipated under an earlier proposal, partly because lawyers and activists will receive less.

For Facebook, whose market cap has just surpassed $100bn, this is hardly an Erin Brockovich moment. But it’s another reminder that there’s a fine line between social advertising – which uses your friends’ buying habits to influence your own – and anti-social advertising, which just annoys everyone.