The social network allows advertising partners to use the profiles of people that have 'liked' their products for marketing purposes.
Five users whose profiles were used in this way took action against the company, claiming that their privacy had been violated. The dispute was resolved last month, but details of the settlement emerged over the weekend when court papers were made public.
Facebook and its CEO Mark Zuckerberg are locked in several other legal disputes. Shareholders claiming that the website's revised growth figures were not disclosed ahead of its stock market floatation have taken action against the executive and his bankers.
Elsewhere, Facebook and Yahoo have sued each other for patent infringement in an ongoing disagreement.
Facebook declined to comment on the settlement of the 'sponsored stories' lawsuit, according to Reuters.