Facebook Settles ‘Beacon’ Lawsuit; Shuts Service And Establishes $9.5 Million Privacy Fund

Two years after its introduction sparked a user revolt, Facebook is killing Beacon, an ad service which shared details about users’ purchases on their news feeds. Facebook is closing the service in order to settle a class action lawsuit brought by members who said Beacon violated their privacy; it’s also paying $9.5 million to to set up a foundation to “fund projects and initiatives that promote the cause of online privacy, safety, and security,” according to CNET.

After users initially complained in fall 2007, Facebook changed the program so that users had to opt in, although not many did. The irony, as both CNET and Mashable point out, is that Facebook ended up following up Beacon with Facebook Connect, which lets members automatically link activity on third party sites to their Facebook profiles. By all accounts, Connect has been widely adopted.