Say Media will pay almost $1 million to settle a class-action lawsuit accusing its predecessor company, ad network VideoEgg, of using Flash cookies to circumvent people's attempts to manage their online privacy.
The company, which did not admit wrongdoing as part of the settlement, also promised to refrain from using Flash cookies to track Web users in the future. U.S. District Court Judge George Wu in the Central District of California approved the agreement last week. Say Media was formed last year as a result of VideoEgg's acquisition of blogging company Six Apart.
The company will pay $850,000 into a settlement fund, which will be distributed to law schools, privacy researchers and advocates including The Center for Democracy & Technology, Carnegie Mellon University and University of California, Berkeley.
The four Web users named in the complaint will receive $1,500 each, but no other consumers will be awarded any money. The consumers' lawyers will receive $206,250.00 in attorneys' fees.
Say Media is now the third company to settle litigation stemming from the alleged use of Flash cookies for tracking. Measurement company Quantcast and widget maker Clearspring agreed to pay $2.4 million to settle similar lawsuits.
A separate case is pending against Specific Media. Although Wu dismissed the lawsuit earlier this year on the grounds that consumers were not injured by the alleged use of Flash cookies, the users revised their complaint and refiled it. Specific Media denies using Flash to track people's Web activity.
Flash cookies historically persisted longer than HTTP cookies because users who deleted HTTP cookies did not necessarily also delete Flash cookies. But Adobe recently made it easier for users to also delete Flash cookies.
A report about Flash cookies published in 2009 by researchers at the University of California, Berkeley and other schools explained how companies could use Flash to circumvent users' privacy controls.
Say Media did not respond to a request for comment.