Facebook's Instagram Acquisition Approved, but Lawsuit Settlement Rejected

Aug 23, 2012

It's been a busy week or two at Facebook.

Last week it looked like Facebook might be able to settle a lawsuit regarding its "Sponsored Stories" which used users "likes" to match ads that would then appear in users' newsfeeds. According to PCMag, "The lawsuit, however, said Facebook ‘improperly uses the names, photographs, likenesses, and identities of plaintiffs to generate substantial profits for Facebook.' Basically, the suit argued that Facebook was using its members as unpaid spokespeople for its advertisers."

Both sides agreed to a settlement but a judge rejected it on Friday, saying it did not explain well enough how the two sides came to the figures described in the settlement. Facebook and the plaintiffs are now free to submit another settlement, or simply just resubmit the same deal with more explanation.

Meanwhile, the FTC has finally given the OK to the social media giant's acquisition of Instagram. With the U.K. Office of Fair Trade approval having already come about a week ago, the deal is now in the clear-though with the value of the 23 million shares of common stock (that made up part of the payment) plummeting, the deal once said to be worth $1 billion dollars is probably more like $750 million, according to ComputerWorld.