February 04, 2010, 9:02 PM — A consumer advocacy group that is critical of Facebook's privacy practices has filed court documents objecting to a proposed settlement in which Facebook agreed to pay $9.5 million to set up a privacy foundation.
Public Citizen, a nonprofit in Washington, D.C., filed an objection to the class action settlement Monday, arguing that it creates an unnecessary privacy organization while providing no benefit to most users affected by Facebook's privacy practices.
"The settlement provides no damages or other relief for class members other than Facebook's promise to disband a program that it voluntarily shut down long ago," the Public Citizen objection states. "Rather than providing actual relief, the settlement would create an unneeded foundation over which Facebook retains unwarranted influence."
The proposed settlement stems from Facebook's Beacon program, which was launched in November 2007 and let third-party Web sites distribute "stories" about users to Facebook news feeds. A class action lawsuit was filed against Facebook, claiming that users were not given adequate information about the use of Beacon and collection of personal information. Facebook subsequently shut down the Beacon program and agreed to pay $9.5 million to set up a nonprofit foundation that will support online privacy, safety and security.
The proposed settlement is pending in U.S. District Court in San Jose, with a hearing scheduled for Feb. 26.
Public Citizen argued that Facebook will exert excessive control over the privacy foundation, and that there is no need for it because several nonprofit organizations dedicated to online privacy already exist. Public Citizen claimed that up to a third of the $9.5 million would go toward paying attorneys.
The settlement agreement includes $41,500 for the 19 individuals who filed the lawsuit, but no other compensation for Facebook's general population of users. Facebook users were allowed to opt out of the proposed settlement, if they wished to pursue further legal action against Facebook. But the deadline for opting out passed on Monday.
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