Facebook's Controversial "Beacon" Costs Company $9.5 Million

Company admits no wrongdoing in settlement over privacy flaws

By Jackson West
|  Thursday, Mar 18, 2010  |  Updated 2:30 PM PDT
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Geeks Gone Wild

Mark Zuckerberg's idea that Facebook users have moved past privacy sounds a little crazy now that the company has settle a suit brought by users concerned about their privacy.

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A judge has issued a final approval of terms in the settlement of a class-action lawsuit brought against Facebook over the company's "Beacon" advertising program.

The social networking site will have to pay $9.5 million, $6.5 million of which will go towards a new, nonprofit online privacy foundation and the rest to the plaintiff's counsel.

Per the terms of the settlement, Facebook admitted no wrongdoing by implementing Beacon, which announced online shopping by users on other sites to their contacts on Facebook, resulting in ruined surprises and revelations of questionable taste in film.

The program was discontinued last year as part of the settlement.

Controversially, Facebook will have a seat on the board of the foundation, with the judge ruling that "there has been no pervasive showing that the foundation will be a mere publicity tool for Facebook."

A publicity tool, perhaps, but not a mere publicity tool.

Also on the board will be a former attorney for the Electronic Privacy Information Center.

Jackson West just loves it when settlements absolve companies of any wrongdoing.

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