By Nate Raymond

(Reuters) - Facebook Inc has proposed a revised $20 million settlement in a class action lawsuit accusing it of violating the rights of users through its "Sponsored Stories" advertising feature after a U.S. judge rejected an earlier accord.

The new settlement agreement, filed Saturday in U.S. District Court in San Francisco, drops provisions setting aside up to $10 million for plaintiffs lawyers' fees and allows users to apply for a cash payment of up to $10 each.

U.S. District Judge Richard Seeborg rejected an initial settlement proposal on August 17 after questioning why the agreement provided no cash for Facebook users.

The initial agreement provided no money to class members and instead set aside $10 million to be given to charities involved in Internet privacy issues.

The new agreement, which is also subject to Seeborg's approval, allows for some of the funds to go to charity, but only if there is any left after users' claims, attorneys fees and other expenses are met.

But given the size of the class, the charities might still get some cash. The agreement provides that, if it is not economically feasible to pay all the users a cut, the court may designate the entire fund as going to the charities.

The proposed settlement covers nearly 125 million people, court documents show. The $20 million equates to less than 2 cents per class member.

"We believe the revised settlement is fair, reasonable, and adequate and responds to the issues raised previously by the court," Andrew Noyes, a Facebook spokesman, said on Monday.

Richard Arnes, a lawyer for the plaintiffs, did not immediately respond to a request for comment.

Filed in 2011, the lawsuit alleged that the social networking site's "Sponsored Stories" feature violated California law by publicizing users' "likes" of advertisers without any compensation or a way to opt-out.

As part of both settlement proposals, Facebook also agreed to give users more control over how their names and likenesses are used.

Facebook's revised agreement also provides new terms on targeting children.

Facebook said it agreed to encourage new users to designate who else on the site is a member of their family. Parents will be able to directly have their children opt-out of the Sponsored Stories feature once their relationship to the child is confirmed.

Facebook also now has a right to object to plaintiffs lawyers' fee applications, unlike the earlier settlement agreement. It was unclear how much the plaintiffs lawyers would seek with the new settlement.

Facebook shares closed at $20.40 on Monday, down about 2.4 percent.

The case is Fraley v. Facebook Inc., U.S. District Court for the Northern District of California, No. 11-1726.

(Reporting By Nate Raymond in New York. Editing by Andre Grenon)

Earlier on HuffPost:

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  • Your Birth Date And Place

    While it might be nice to hear from Facebook well-wishers on your birthday, you should think twice before posting your full birthday. Beth Givens, executive director of the <a href="http://www.privacyrights.org/" target="_hplink">Privacy Rights Clearinghouse</a> <a href="http://finance.yahoo.com/family-home/article/110674/6-things-you-should-never-reveal-on-facebook">advises</a> that revealing your exact birthday and your place of birth is like handing over your financial security to thieves. Furthermore, Carnegie Mellon researchers recently <a href="http://arstechnica.com/tech-policy/news/2009/07/social-insecurity-numbers-open-to-hacking.ars" target="_hplink">discovered</a> that they could reconstruct social security numbers using an individual's birthday and place of birth. Rather than remove your birthday entirely, you could enter a date that's just a few days off from your real birthday.

  • Your Mother's Maiden Name

    "Your mother’s maiden name is an especially valuable bit of information, not least since it’s often the answer to security questions on many sites," writes the <em><a href="http://bucks.blogs.nytimes.com/2010/10/12/what-not-to-tell-facebook-friends/?src=tptw" target="_hplink">New York Times</a></em>. Credit card companies, your wireless service provider, and numerous other firms frequently rely on this tidbit to protect your personal information.

  • Your Home Address

    Publicizing your home address enables everyone and anyone with whom you've shared that information to see where you live, from exes to employers. Opening up in this way could have negative repercussions: for example, there have been instances in which <a href="http://www.huffingtonpost.com/2010/02/17/please-rob-me-site-tells_n_465966.html" target="_hplink">burglars have used Facebook to target users</a> who said they were not at home.

  • Your Long Trips Away From Home

    Don't post status updates that mention when you will be away from home, <a href="http://bucks.blogs.nytimes.com/2010/09/15/dont-tell-facebook-friends-that-youre-going-away/" target="_hplink">advises</a> <em>New York Times</em> columnist Ron Lieber. When you broadcast your vacation dates, you might be telling untrustworthy Facebook "friends" that your house is empty and unwatched. "[R]emind 'friends' that you have an alarm or a guard dog," Lieber writes.

  • Your Short Trips Away From Home

    Although new features like Facebook Places encourage you to check in during outings and broadcast your location (be it at a restaurant, park, or store), you might think twice even before sharing information about shorter departures from your home. "Don’t post messages such as 'out for a run' or 'at the mall shopping for my sweetie,'" Identity Theft 911 <a href="http://identitytheft911.com/company/press/release.ext?sp=11132" target="_hplink">cautions</a>. "Thieves could use that information to physically break in your house."

  • Your Inappropriate Photos

    By now, nearly everyone knows that racy, illicit, or otherwise incriminating photos posted on Facebook can cost you a job (or worse). But even deleted photos could come back to haunt you. Ars Technica recently <a href="http://arstechnica.com/web/news/2010/10/facebook-may-be-making-strides.ars" target="_hplink">discovered</a> that Facebook's servers can store deleted photos for an unspecified amount of time. "It's possible," a Facebook spokesperson <a href="http://arstechnica.com/web/news/2010/10/facebook-may-be-making-strides.ars" target="_hplink">told</a> Ars Technica, "that someone who previously had access to a photo and saved the direct URL from our content delivery network partner could still access the photo."

  • Confessionals

    Flubbing on your tax returns? Can't stand your boss? Pulled a 'dine and dash?' Don't tell Facebook. The site's privacy settings allow you to control with whom you share certain information--for example, you can create a Group that consists only of your closest friends--but, once posted, it can be hard to erase proof of your illicit or illegal activities, and difficult to keep it from spreading. There are countless examples of workers getting the axe for oversharing on Facebook, as well as many instances in which <a href="http://www.huffingtonpost.com/2010/08/16/arrested-over-facebook-po_n_683160.html" target="_hplink">people have been arrested</a> for information they shared on the social networking site. (Click <a href="http://www.huffingtonpost.com/2010/07/26/fired-over-facebook-posts_n_659170.html" target="_hplink">here</a> to see a few examples of Facebook posts that got people canned.)

  • Your Phone Number

    Watch where you post your phone number. Include it in your profile and, depending on your privacy settings, even your most distant Facebook "friends" (think exes, elementary school contacts, friends-of-friends) might be able to access it and give you a ring. Sharing it with Facebook Pages can also get you in trouble. Developer Tom Scott created an app called <a href="http://www.huffingtonpost.com/2010/05/24/evil-facebook-app-exposes_n_587144.html" target="_hplink">Evil</a> that displays phone numbers published anywhere on Facebook. <a href="http://www.huffingtonpost.com/2010/05/24/evil-facebook-app-exposes_n_587144.html" target="_hplink">According to Scott</a>, "There are uncountable numbers of groups on Facebook called 'lost my phone!!!!! need ur numbers!!!!!' [...] Most of them are marked as 'public', and a lot of folks don't understand what that means in Facebook's context -- to Facebook, 'public' means everyone in the world, whether they're a Facebook member or not."

  • Your Vacation Countdown

    <a href="http://finance.yahoo.com/family-home/article/110674/6-things-you-should-never-reveal-on-facebook" target="_hplink">CBSMoneyWatch.com</a> warns social network users that counting down the days to a vacation can be as negligent as stating how many days the vacation will last. "There may be a better way to say 'Rob me, please' than posting something along the lines of: 'Count-down to Maui! Two days and Ritz Carlton, here we come!' on [a social networking site]. But it's hard to think of one. Post the photos on Facebook when you return, if you like. But don't invite criminals in by telling them specifically when you'll be gone," MoneyWatch <a href="http://finance.yahoo.com/family-home/article/110674/6-things-you-should-never-reveal-on-facebook" target="_hplink">writes</a>.

  • Your Child's Name

    Identity thieves also target children. "Don't use a child's name in photo tags or captions," <a href="http://www.consumerreports.org/cro/magazine-archive/2010/june/electronics-computers/social-insecurity/7-things-to-stop-doing-on-facebook/index.htm" target="_hplink">writes</a> Consumer Reports. "If someone else does, delete it by clicking on Remove Tag. If your child isn't on Facebook and someone includes his or her name in a caption, ask that person to remove the name."

  • Your 'Risky' Behavior

    CBSMoneyWatch.com <a href="http://moneywatch.bnet.com/saving-money/blog/devil-details/6-things-you-should-never-reveal-on-facebook/2360/?tag=content;col1" target="_hplink">writes</a>: <blockquote>You take your classic Camaro out for street racing, soar above the hills in a hang glider, or smoke like a chimney? Insurers are increasingly turning to the web to figure out whether their applicants and customers are putting their lives or property at risk, according to Insure.com.</blockquote> There have been additional <a href="http://www.huffingtonpost.com/2010/02/22/facebook-twitter-users-co_n_471548.html" target="_hplink">reports</a> that insurance companies may adjust users' premiums based what they post to Facebook. Given that criminals are turning to high-tech tools like Google Street View and Facebook to target victims, "I wouldn't be surprised if, as social media grow in popularity and more location-based applications come to fore, insurance providers consider these in their pricing of an individual's risk," <a href="http://www.huffingtonpost.com/2010/02/22/facebook-twitter-users-co_n_471548.html" target="_hplink">says</a> Darren Black, head of home insurance for Confused.com.

  • The Layout Of Your Home

    <a href="http://identitytheft911.com/company/press/release.ext?sp=11132" target="_hplink">Identity Theft 911</a> reminds Facebook users never to post photos that reveal the layout of an apartment or home and the valuables therein.

  • Your Profile On Public Search

    Do you want your Facebook profile--even bare-bones information like your gender, name, and profile picture--appearing in a Google search? If not, you should should block your profile from appearing in search engine results. Consumer Reports <a href="http://www.consumerreports.org/cro/magazine-archive/2010/june/electronics-computers/social-insecurity/7-things-to-stop-doing-on-facebook/index.htm" target="_blank">advises</a> that doing so will "help prevent strangers from accessing your page." To change this privacy setting, go to Privacy Settings under Account, then Sharing on Facebook.

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