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Facebook loses face: Faced down in faceoff over face-placing

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Facebook is expected to cough up around $20m, and amend certain features of the site, to end litigation brought against the dominant social network following the arrival of its much-disliked "sponsored stories" feature.

In December last year, five users of the service – who complained about their faces being featured in ads on Facebook – filed a lawsuit in which they sought class-action status against the Mark Zuckerberg-run company.

At the time, Facebook snootily claimed that the case was "without merit".

Now Facebook, according to court documents filed in North Carolina on Wednesday, has agreed to hand over more control to its users in order to settle the case.

Reuters reported that the suit had involved over 100 million potential class members.

The court filing said:

Facebook will create an easily accessible mechanism that enables users to view the subset of their interactions and other content that have been displayed in Sponsored Stories.

The company is also required to give users control over which "interaction" and "content" they deem acceptable to be featured in Facebook's Sponsored Stories.

As we reported in December last year, Facebook users who readily clicked on "Like" buttons on the site were about to be in for a surprise because their faces would then begin appearing alongside third-party adverts served via the network.

Worse still, Facebook confirmed at the time that users would not be gifted with an opt-out option from its Sponsored Stories, all of which led some to claim the company had been disingenuous about its "Like" button, which up until that point appeared to serve a somewhat benign purpose for people connecting with branded ad pages.

To others, it was clear that the company would eventually use its most important asset – people's faces – to more aggressively push the ads on the site, which recently bobbed uncertainly onto Wall Street in far from stellar IPO.

The five members of Facebook who filed the suit had argued that the network violated California law by running certain "Likes" with various ads without allowing those individuals to opt out or – better still – to earn a couple of bucks from the process.

However, the settlement needs to be approved by a judge in California, who is required to ensure that the class members aren't shafted by Facebook.

Evidence used in the lawsuit included a comment from Zuckerberg about a trusted brand referral from a "friend" on his network; he apparently said that such referrals represented the "Holy Grail" of advertising. ®

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