Facebook won preliminary approval Monday in its offer to settle a class-action lawsuit brought against members of the social network who charged the company with violating privacy rights. The lawsuit stemmed from Facebook’s Sponsored Stories feature, which displayed users’ names, pictures and taglines stating when a person “liked” particular advertisers. While the ads originally appeared in Facebook’s right column, they were later moved into users’ news feeds and were identified as “sponsored” stories.

In 2011 five original claimants alleged Facebook violated California law by publicizing their “likes” of advertisers without allowing them to opt out of the feature or compensating them for the advertisement. The case potentially involved 100 million class members.

Monday’s proposed settlement was the second presented to U.S. District Judge Richard Seeborg of California. Seeborg had previously rejected an August offer, questioning why it did not award money to the plaintiffs for using their personal information. Seeborg said the revised settlement offer “falls within the range of possible approval as fair, reasonable and adequate.”

In the newest proposal, Facebook users may claim a cash payment of up to $10 each. The payments will come from a $20 million settlement fund. Any money remaining after claims are filed will be donated to charity.

In addition to the monetary settlement, Facebook will create a new tool that will enable users to first view content that may be displayed as a Sponsored Story and opt out should they desire.

A Facebook spokesperson said the company is “pleased that the court has given preliminary approval of the proposed settlement.”

Class members will have the opportunity to object to the settlement before Seeborg considers granting final approval. The next hearing has been scheduled for June 28, 2013.

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