Carrier IQ $9 Million Privacy Settlement Moves Forward

A judge has granted preliminary approval to a deal calling for software developer Carrier IQ and several mobile phone manufacturers to pay $9 million to settle a class-action privacy lawsuit.

"The settlement agreement is fair, reasonable, adequate, and in the best interests of the settlement class," U.S. District Court Judge Edward Chen in San Francisco wrote in an order issued Tuesday. He added that the deal "substantially fulfills the purposes and objectives of the class action and provides beneficial relief to the settlement class."

Chen is expected to decide later this year whether to grant the deal final approval.

If ultimately approved, the settlement will resolve a lengthy legal battle over whether Carrier IQ's software violated smartphone users' privacy. The company shuttered last year, but some of its assets were acquired by AT&T; the telecom carrier also hired some of Carrier IQ's employees.

Allegations of a privacy breach first surfaced in November 2011, when a researcher posted a video that appeared to show keystroke logging. The report led to numerous lawsuits against Carrier IQ as well as Motorola, Pantech, Samsung, LG Electronics, HTC, and Huawai. The cases were consolidated in front of Chen in 2012.

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Carrier IQ acknowledged that its software sometimes logs the contents of messages, but said the data isn't readable. The company also said its software was intended to help mobile carriers to discover the source of network problems, like dropped calls.

The class-action settlement provides for consumers to receive a portion of the $9 million fund, contingent on how many of the estimated 79 million class members submit claims. If so many people submit claims that the payout would be less than $4 per person, no class members will receive any money. Instead, the fund will go to three outside organizations -- the Electronic Frontier Foundation, the Center for Democracy and Technology, and CyLab Usable Privacy and Security Laboratory at Carnegie Mellon University.

The deal also calls for the attorneys who brought the case to receive around $2.25 million.

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