Google's $8.5 Million Data Leakage Settlement Clears First Hurdle

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A federal judge has tentatively approved Google's controversial $8.5 million settlement of a class-action lawsuit alleging that the company violated its privacy policy by transmitting users' search queries -- which sometimes include their names -- to publishers.

“On balance, the factors favoring approval of the settlement outweigh those that could support a finding to the contrary,” U.S. District Court Judge Edward Davila in San Jose, Calif., wrote this week in a 14-page order granting the deal preliminary approval. He added that the deal's terms are “fair, reasonable and adequate.”

Davila will decide whether to grant the deal final approval after a hearing in August

The settlement requires Google to donate around $6 million to the World Privacy Foundation, Carnegie-Mellon, Chicago-Kent College of Law Center for Internet, Society & Policy, Berkman Center for Internet and Society at Harvard University, Stanford Center for Internet and Society, and the AARP. Those schools and organizations will only receive a share of the settlement if they promise to devote the money to protecting online privacy.

The deal doesn't call for Google to pay anything to consumers. The agreement also doesn't require to change its practices, but does call for the company to tweak its privacy policy. (As a practical matter, Google recently revised its practices regarding the information it transmits to publishers when people click on organic search links.)

When the deal was initially announced last September, some privacy advocates objected on the ground that it didn't require Google to change the data-transmission practices that spurred the lawsuit. The Electronic Privacy Information Center, Consumer Watchdog, Center for Digital Democracy, Patient Privacy Rights and Privacy Rights Clearinghouse argued in court papers that the settlement would allow the company to continue leaking users' names and other personal information to publishers.

Davila acknowledged those concerns, but said in his order that “class action settlements do not need to embody the best result for preliminary approval.”

The settlement resolves a 2010 class-action lawsuit accusing Google of violating its privacy policy by including search queries in "referrer headers" -- the information that is automatically transmitted to sites that users click on when they leave Google. Some queries, like people's vanity searches on their own names, can provide clues to their identities.

The user who initially sued -- Paloma Gaos -- alleged that she conducted searches for her own name, as well as her family members' names, and clicked on links on the Google search results. The result was that Google disclosed her "sensitive personal information" to third parties when it transmitted her queries in the referrer headers, she alleged.

After Gaos filed suit, Google revised its policy on the information it includes in referrer headers. Now, when users visit a site after clicking on a link in the non-paid results, Google doesn't send the search queries to the destination site.

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