A consumer advocacy group is objecting to Facebook's plans to spend $9.5m setting up a privacy foundation.
The foundation was part of settlement proposals that emerged following a lawsuit sparked by the social network's Beacon program, which let third-party websites distribute 'stories' about users to Facebook.
Less than a year after Beacon's launch in November 2007, Facebook was faced with the lawsuit alledging that "Facebook and its affiliates did not give users adequate notice and choice about Beacon and the collection and use of users' personal information".
While Facebook never admitted any wrongdoing, it terminated the service and agreed to contribute to the foundation designed to "fund projects and initiatives that promote the cause of online privacy, safety, and security".
Public Citizen, a nonprofit organisation in the US, filed an objection to the class action settlement, arguing that it creates an unnecessary privacy organisation while providing no benefit to most users affected by Facebook's privacy practices.
"The settlement provides no damages or other relief for class members other than Facebook's promise to disband a program that it voluntarily shut down long ago," the Public Citizen objection states.
"Rather than providing actual relief, the settlement would create an unneeded foundation over which Facebook retains unwarranted influence."
The proposed settlement is pending in US District Court in San Jose, with a hearing scheduled for February 26.
Public Citizen argued that Facebook will exert excessive control over the privacy foundation, and that there is no need for it because several nonprofit organizations dedicated to online privacy already exist.
Public Citizen claimed that up to a third of the $9.5 million would go toward paying attorneys.
The settlement agreement includes $41,500 for the 19 individuals who filed the lawsuit, but no other compensation for Facebook's general population of users.
Facebook users were allowed to opt out of the proposed settlement, if they wished to pursue further legal action against Facebook. But the deadline for opting out passed on Monday.