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Facebook privacy-rights settlement challenged

Thu, Mar 4th 2010 12:00 am
A proposed $9.5 million settlement of a class-action lawsuit against Facebook Inc. has come under fire because part of the money is supposed to go to charity.

The objection was filed by Public Citizen, a Washington, D.C.-based consumer-rights organization. A San Francisco federal judge heard its objections last week but has yet to rule on them.

The settlement came on a 2008 suit that was filed after Palo Alto-based Facebook launched Beacon in November 2007. Beacon let Facebook users tell their friends about online purchases made on third-party affiliate Web sites.

Beacon was criticized, however, because it was an opt-out instead of opt-in application, exposing some embarassing purchases to the friends of unwitting Facebook users.

Facebook denied doing anything wrong but offered to pay $9.5 million, with as much as 30 percent going to plaintiffs' lawyers and the rest going to set up a nonprofit foundation to fund "projects and initiatives that promote the cause of online privacy, safety and security."