The case resolves around Facebook’s use of advertising in its sponsored stories, with the five plaintiffs claiming the social networking site violated users’ privacy rights by publicising their likes in advertisements without telling them.
The plaintiffs claimed to be representing over 100 million potential class members.
US District Judge Richard Seeborg rejected a settlement offer from Facebook in August, saying the company should award members money for using their personal information.
But Reuters reports that the judge has now said that the latest settlement “falls within the range of possible approval as fair, reasonable and adequate”, after Facebook said users can now claim a cash payment of us to US$10 each from a US$20 million settlement fund, with remaining funds going to charity.
Facebook also said it would come up with a tool whereby users could view content and opt out, according to a court document.
A Facebook spokesman said the company was “pleased that the court has granted preliminary approval of the proposed settlement”.
Seeborg must yet decide whether to grant final approval, with class members still having the chance to object before the final hearing on June 28, 2013.