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Facebook settles 'Sponsored Stories' lawsuit

May 22, 2012|By Salvador Rodriguez

Facebook has agreed to settle a lawsuit that alleges the social network's so-called Sponsored Stories advertisements benefited from the "Likes" of users without giving them compensation or a chance to opt out.

The terms of the settlement were not disclosed. The settlement was disclosed in a court document filed Tuesday in federal court in San Jose.

The lawsuit, filed last year by five Facebook users, could have resulted in billions of dollars in losses for Facebook, according to Reuters.

Sponsored Stories appear on Facebook users' pages with information taken from their friends that can include their Likes, names and pictures. The lawsuit called the advertisements a “misleading advertising scheme,” Bloomberg News reported.

Facebook could not be reached for comment. 

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