Facebook Critic Asks 9th Circuit To Reconsider Beacon Settlement

by , Nov 2, 2012, 5:11 PM
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Facebook must have thought that it had finally put an end to the fallout from its doomed Beacon ad program in September. That's when a three-judge panel of a federal appeals court voted 2-1 to uphold a settlement requiring Facebook to pay $6.5 million to create a new privacy foundation.

But that decision might not be the last word on the matter. Facebook user Ginger McCall, who also works for the Electronic Privacy Information Center, has filed papers asking for further review by a larger panel of the appellate court.

She argues that the two judges who voted to uphold the settlement as "fundamentally fair" weren't skeptical enough about the deal. 

McCall has a point. The settlement calls for Facebook to pay around $6.5 million to create a new privacy foundation. While that in itself might not raise eyebrows, the structure of the foundation will leave Facebook wielding a huge amount of control over it. That's because the new organization is supposed to be directed by a three-person board -- and Facebook will play a key role in selecting those people. (One of the board members was supposed to be Facebook's public policy director, Tim Sparapani, but he left the company last year.)*

The deal also requires Facebook to pay around $2.5 million to the attorneys who brought the case. But individual users who were blindsided by the ad program -- which shared their purchases with their friends -- won't see a dime (except for the 19 who let their names be used in the complaint).

McCall's petition for further review might get some traction, if only because the earlier decision to uphold the settlement wasn't unanimous. Senior Circuit Judge Andrew Kleinfeld dissented, writing that the deal "perverts the class action into a device for depriving victims of remedies for wrongs, while enriching both the wrongdoers and the lawyers purporting to represent the class." He added: "Facebook deprived its users of their privacy. And now they are deprived of a remedy."

*This post has been corrected to reflect that Tim Sparapani no longer works at Facebook

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