Google's $8.5 Million Privacy Settlement Faces Appeal

An activist who opposed Google's recent $8.5 million settlement of a privacy lawsuit is appealing a judge's approval of the deal.

Theodore Frank, founder of the Washington-based Center for Class Action Fairness, last week set the appellate process in motion by filing papers with the 9th Circuit Court of Appeals. Frank hasn't yet filed his written arguments, but he previously asked U.S. District Court Judge Edward Davila in San Jose, Calif. to reject the deal on the grounds that it wouldn't benefit Google's users.

The settlement resolved a 2010 lawsuit alleging that Google violated the privacy of some search users by “leaking” their names to outside companies. Specifically, Google allegedly violated 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 searches for their own names, can offer clues to users' identities.

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The deal, approved by Davilla in early April, requires Google to pay around $6 million to six nonprofits -- Carnegie Mellon University, World Privacy Forum, Chicago-Kent College of Law, Stanford Law, Harvard's Berkman Center and the AARP Foundation -- and more than $2 million to the attorneys who brought the lawsuit.

When Frank urged Davila to reject the settlement, the activist argued that Google searchers who were affected by the data leaks “will see not one penny” as a result of the case. Frank's organization has opposed several other class-action privacy settlements, including a $9.5 million deal by Facebook that ended litigation stemming from the 2007 Beacon program, which told users about their friends' ecommerce activity.

Frank also questioned the choice of nonprofits slated to receive funds, arguing that some of them had relationships with Google as well as the lawyers representing the consumers. He pointed out that two of the plaintiffs' lawyers were alumni of three schools slated to receive funds (Stanford, Harvard and Chicago-Kent College of Law) and that Google already donates money to Harvard, Stanford, AARP and Chicago-Kent.

Last August, Davila reportedly indicated that he was troubled by some of those points, saying at a hearing that the deal “doesn’t pass the smell test.”

But he ultimately OK-ed the deal, writing that there was “no indication that counsel’s allegiance to a particular alma mater” played a role in selecting fund recipients.

The settlement agreement doesn't require Google to change its practices. Instead, it calls for the company to rework its privacy policy.

As a practical matter, Google revised its policies since the lawsuit was initially filed. The company no longer transmits search queries when people click on organic search links, but still sends queries to AdWords advertisers, when users click on paid-search ads.

Advocacy groups including the Electronic Privacy Information Center and Consumer Watchdog criticized the deal when it was first announced. The organizations argued in a September 2013 letter to Davila that the settlement would allow the company to continue leaking users' names and other personal information to publishers.

Davila rejected those arguments last month, ruling that the deal “falls within a reasonable range of possible settlements.”

He added: “Future users of Google's website will receive something from the injunctive relief: the capability to better understand Google’s disclosure practices before conducting a search on its website.”  

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