(WEB HOST INDUSTRY REVIEW) — According to reports released late last week, a federal judge approved a $9.5 million settlement in a class action lawsuit filed against Facebook, regarding a program that monitored what the site’s users were buying and renting on online services including Blockbuster and Overstock.
The suit alleged that Facebook’s Beacon program breached federal wiretap and video-rental privacy laws, according to Wired’s Threatlevel security blog. According to the terms of the settlement, in which Facebook denies any wrongdoing, the social networking company will finance a “digital trust fund” that will issue grants totaling more than $6 million to groups studying privacy online.
US District Judge Richard Seeborg in San Jose, California gave final approval to the settlement Wednesday after hearing objections – he gave his preliminary approval last year. One of the major objections to the settlement, coming from the privacy community, was the fact that Facebook will have a seat on the three-member board charged with issuing the trust money. Seeborg, however, said the concerns were unnecessary, and that there was no evidence the fund would serve as a publicity took for the company.
According to Wired, the attorneys for the plaintiffs in the case will receive about $3 million of the settlement. Only a few of the approximately 3.6 million members of the class action suit are set to receive damages.
The Beacon program first launched in 2007. It would sometimes post notice of Facebook users’ Blockbuster movie rentals or Overstock.com purchase in their news streams. Wired reports that lead plaintiff Sean Lane’s wife found out about a gift of jewelry he had purchased for her via Facebook. As part of the settlement, Facebook shut down the Beacon program in November of last year.
The board of the privacy center funded by the settlement will reportedly include Facebook public policy director Tim Sparapani; Chris Jay Hoofnagle, head of the Berkely Center for Law & Technology; and former ACLU attorney and privacy advocate Larry Magid.
Last time we reported on the conclusion of a legal matter involving Facebook, the company was on the receiving end of a ruling that ordered $711 million in damages paid to the company in a spam case. At the time, the company said it didn’t expect to receive much of the money it was awarded, but that it hoped the case’s outcome would serve as a deterrent against spammers in the future.
About Liam Eagle
Liam Eagle has worked as a contributor to the Web Host Industry Review since its inception in 2000, and as editor since 2003. He has been editor of the WHIR's print magazine since its launch. His daily involvement in the gathering and reporting of Web hosting news and his regular interaction with Web hosting leaders gives him an uncommonly broad appreciation of the issues and tends facing the business. Through his WHIR blog, Liam spots Web hosting trends and offers opinions on the industry-wide impacts of major developments and the motivation behind big announcements. Follow him on Twitter @liameagle
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