Facebook settlement: Kill Beacon, pay $9.5 million into fund to promote online privacy

A class action suit over Facebook's controversial Beacon program today received preliminary approval (PDF) by a U.S.

A class action suit over Facebook's controversial Beacon program today received preliminary approval (PDF) by a U.S. District Court, bringing an end to the Beacon service and giving the company an option of clearing the matter without long - and expensive - court proceedings.

The proposal calls for Facebook to discontinue the Beacon program and cough up $9.5 million to set-up a non-profit foundation that "will fund projects and initiatives that promote the cause of online privacy, safety and security."

Beacon, you may recall, was launched back in November 2007 and was designed to allow users to share information with their Facebook friends about the things they were doing on third-party, affiliated sites, including Blockbuster, Fandango, Hotwire, Overstock and Zappos.

At issue was the way Facebook rolled out the service as one that automatically included everyone, instead of an opt-in route where people could enroll if they wanted to. For weeks, users grumbled and eventually the service was switched to an opt-in - and Facebook CEO Mark Zuckerberg apologized for the way Beacon was handled.

The class action settlement affects people who were Facebook members between November 7, 2007 and September 2009 and visited a "Facebook-affiliated website that was participating in Facebook's Beacon program." Parties can choose to do nothing, which means they give up their rights to sue Facebook and the others over this matter later. Parties can also opt-out of the settlement, object to it or attend the settlement hearing.

The settlement is not one where class action members will receive compensation. The legal notice of the proposed settlement will be published in newspapers, as required, but also through Facebook updates, according to court documents.

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