14 DAY TRIAL // Beacon, an ill-fated advertising program launched by Facebook in 2007, is now officially dead and a class-action lawsuit filed against the social network regarding the program has been settled and is awaiting court approval. Beacon tracked users' actions on several partner sites and then displayed them on Facebook, which raised several privacy concerns leading to the lawsuit.
Facebook hasn't lost the case, but has decided to settle it before a decision is made to get it over with. It is most likely, though, that, if a decision had been made, it wouldn't have been very favorable for the social network. “While we don’t admit any wrongdoing in this matter, we did want to get the episode behind us. And, we were particularly interested in an agreement that creates a foundation that has value for all users rather than just a few individuals,” Facebook told Inside Facebook in a statement.
In the settlement, Facebook agreed to finally close down the project, though only a handful of partners were still using it. After the initial PR fiasco, Facebook has de-emphasized it as an advertising option for over a year now, but it hasn't closed it down entirely. Along with the closure, Facebook will also fund an independent foundation with $9.5 million. The new organization will encourage and fund projects that will “promote the cause of online privacy, safety, and security.” However, up to one third of the money destined for the fund can be claimed by the plaintiff’s lawyers. The proposed settlement still has to be approved by the court.
When first launched, Beacon raised a lot of concerns about the way it handled user data. This led Facebook to make several changes giving more control to the users, but it was too late for the public opinion to be changed. However, while Beacon might have been a failure, it led to the launch of Facebook Connect, with which it actually shares many features and that proved much more popular both with users and third-party sites.