Google settles class-action lawsuit over Buzz

Search giant to donate $8.5 million to help promote privacy education

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Sometimes Google adheres to its policy of getting "right up to the creepy line" but not crossing it. And sometimes it crosses that line, as the online search giant did with Google Buzz, its privacy-challenged social networking tool.

On Tuesday Google announced a settlement in a class-action lawsuit brought against it by Gmail users who said their privacy was violated because of security flaws in Buzz.

As part of the settlement agreement, the search giant said in a statement, "Google will create an $8.5 million fund, the majority of which will go to organizations focused on Internet privacy education and policy, and will make additional efforts to educate users about the privacy aspects of Buzz."

I wonder if that would include the Electronic Privacy Information Center, which filed a complaint with the Federal Trade Commission over Buzz. The Electronic Frontier Foundation also was critical of Google.

Google acknowledged the flaws in Buzz immediately after last February's launch. "Google moved quickly to make significant product improvements including increased visibility, an updated start up process featuring auto-suggestions, and adding Buzz to the Google Dashboard. In April, Google rolled out a 'second chance' encouraging Buzz users to check and verify their privacy settings," the company said.

Gary E. Mason, counsel for the plaintiffs in the litigation, said in a statement, "We feel this settlement has many benefits to class members, including providing a significant amount of money to non-profit groups committed to educating users about Internet privacy and ensuring that Buzz users can join this on-line community without compromising their privacy."

Here's a website with details of the settlement, which is scheduled to be reviewed in court for approval on Jan. 31, 2011.

Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.

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