Facebook has agreed to pay out $10 million to settle a lawsuit that accused the site of violating users' rights to control the use of their own names, photographs and likenesses. Court documents were released over the weekend. Facebook are paying the $10 million to charity.

The lawsuit was initiated by five Facebook members who said that the company where violating California law, by publicising users ‘likes' of certain advertisers on its ‘Sponsored Stories' feature without paying them, or even giving them a way to opt out.

The ‘Sponsored Story' is an advertisement that appears on a members Facebook page consisting of another friend's name, profile picture.

Previous court documents indicate that the proposed class action lawsuit which was filed in federal court in San Jose, California could have included one of every three Americans, with potentially billions of dollars in damages.

The lawsuit included comments from Facebook's Sheryl Sandberg who said that a Sponsored Story advertisement was up to three times the value of a standard Facebook ad without the friend endorsement. [yframe url='http://www.youtube.com/watch?v=ce3P79ktpTk']

U.S. District judge Lucy Koh said “California has long recognized a right to protect one’s name and likeness against appropriation by others for their advantage.”

Kitguru says: We don't think we have heard the end of this.

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