It tracked purchases Facebook users made on other sites and sent alerts about them to their Facebook friends. Facebook later let users turn Beacon off, and CEO Mark Zuckerberg publicly apologized for it.
Beacon never really caught on, and Facebook agreed to end it as part of a class-action lawsuit settlement.
The Palo Alto, California-based Facebook company will also pay $9.5 million to create a foundation to promote online privacy, safety and security.
The proposed settlement must still be approved by a judge.
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