Facebook forced to pay €50m to silence founder’s roommates

A LAW firm has let slip that Facebook paid $65 million (e50m) to settle a suit charging that founder Mark Zuckerberg swiped the idea for the website from former college roommates.

Quinn Emanuel Urquhart Oliver & Hedges law firm boasted in an advertising brochure about outcomes of an array of cases it handled last year, among them a $65m settlement from Facebook.

The law firm’s ad brags that it is a sound investment and that “it’s our opponents who needed a bailout”.

The Recorder, a California legal publication yesterday published a story about the leak.

Quinn Emanuel lawyers represented ConnectU in a lawsuit that ended in a settlement endorsed by a federal judge in the Silicon Valley city of San Jose in June of last year.

The financial terms of the settlement were edited from court documents and not disclosed by Facebook.

The details of the outcome had been kept top secret and lawyers on both sides went as far as asking the judge to clear the courtroom of reporters.

“We can’t comment on a confidential agreement,” Facebook said in a written response to a request for comment yesterday.

ConnectU creators Tyler and Cameron Winklevoss claimed that they enlisted Zuckerberg to finish software code for their social networking website while they were all students at Harvard in 2003.

Zuckerberg, a second year student at the time, took their code and their idea and launched Facebook in February of 2004 instead of holding up his end of the deal, according to ConnectU’s lawsuit.

Facebook and ConnectU founders, in the company of lawyers and advisors, negotiated a settlement that included Facebook buying ConnectU for an undisclosed amount, according to court documents.

Facebook launched in February 2004, ConnectU three months later. But it has struggled, and now has fewer than 100,000 members, while Facebook boasts more than 150 million. ConnectU launched its lawsuit in 2004.

“$65m is a significant sum. It’s certainly more than the cost of the defence,” said Chris Scott Graham, a partner at a local law firm.

“But it’s a very small percentage of [Facebook’s] valuation and could therefore be argued to be a payment based on considerations other than the merits of the claims.”