[6] On November 29, 2007, Stefan Berteau, a security researcher for Computer Associates, published a note on his tests of the Beacon system.
[1][7] This revelation was in direct contradiction to the statements made by Chamath Palihapitiya, Facebook's vice president of marketing and operations, in an interview with The New York Times published the same day: Q.
Settling the case, Facebook finally paid $9.5 million in total to resolve the privacy concerns around its users.
[16] It established a non-profit foundation called Digital Trust Foundation with $6.5 million, aiming to "fund and sponsor programs designed to educate users, regulators and enterprises regarding critical issues relating to the protection of identity and personal information online".
In response to the challenge of the settlement, Facebook explained that direct payment would not be a wise decision compared to setting up a foundation.
Each potential plaintiff would only share a tiny amount of money as it is being divided by a huge number of class action members.
Thus, the money used in founding a relevant non-profit organization to educate people about privacy issues seemed to be a better-off deal serving the same interests.
Beacon hurt Facebook's reputation by violating its Software Engineering tenets and disrespecting the privacy rights of its users.
[20] Since the failure of launching Beacon, Facebook has been mired in controversy in terms of privacy issues.
The Beacon stories led many Internet Surfers to believe that "Facebook and other profit-oriented social networking sites are large Internet-based surveillance machines.
[22] By learning from its unsuccessful experience, Facebook has been seeking other ways to monetize its user database through social advertising.