Home Facebook To Pay $9.5 Million in Privacy Settlement

Facebook To Pay $9.5 Million in Privacy Settlement

Facebook may be denying any wrongdoing, but a California judge is disagreeing with the social networks’ disagreement to the tune of a $9.5 million dollar settlement today.

The Los Angeles Times reports that the settlement comes in response to a class-action lawsuit over Facebook’s Beacon program that published what users were buying.

The decision allocates $6 million of the settlement to a “digital trust fund” that will go to organizations that study online privacy, says the Times article. The Times explains the bit of controversy hovering around this final decision:

Over the objections of privacy advocates, Facebook will have a seat on the fund’s three-member board. It consists of Chris Jay Hoofnagle, who heads the Berkeley Center for Law & Technology; Tim Sparapani, Facebook’s public policy director; and writer Larry Magid.

While some people are saying that the settlement is unfair in a few ways, Justin Brookman, a senior resident fellow at the Center for Democracy and Technology, seemed to disagree. The general contention has been that Facebook will have one seat on the three-member board for the “digital trust fund” and that it was already required to pay money out to promote online privacy, as our own Sarah Perez discussed when the settlement was first announced last October.

Brookman said that today’s decision is “a really good settlement for consumers”, explaining that “there are really very few settlements that come up with that type of monetary figure.”

He also contended that, while Facebook will have a seat on the board, it will be a minority member, as a majority vote requires two out of the three parties to agree. He said that the other two members, Hoofnagle and Magid, were both good choices who will act in the public’s interest.

“We have a lot of confidence they’ll make wise awards of the money,” he said. “They both criticized Facebook when Beacon came out.”

According to the Times, however, this may not be the end of the appeal process.

One privacy advocate said he was exploring whether he could appeal the decision. “This sweetheart deal for Facebook is outrageous and another indication they don’t really want to ensure privacy online,” said Jeffrey Chester, executive director of the Center for Digital Democracy.

Brookman noted, however, that a settlement like this for privacy issues was relatively unprecedented.

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