Google And Digital Rights Groups Ask Court To Uphold Privacy Settlement

Google is urging the Supreme Court to uphold an agreement requiring the company to donate around $5 million to various nonprofits in order to settle a privacy class-action lawsuit.

The nonprofits "are of the highest quality and submitted detailed, grant-like proposals for projects closely targeted to the Internet privacy issues raised by plaintiffs’ claims," Google writes in papers filed recently with the Supreme Court.

The company adds that attempts to distribute the settlement funds directly to Google users whose privacy was allegedly violated would not be feasible.

Google's papers come in response to a challenge to the settlement by Ted Frank, founder of the Center for Class Action Fairness. He argues Google shouldn't have been allowed to settle the privacy lawsuit by making donations to outside organizations -- some of which have previously received money from the company.

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The settlement resolved a 2010 class-action complaint alleging that Google violated users' privacy by including their search queries in "referer headers" -- the information that is automatically transmitted to sites users click on when they leave Google. Some queries, like people's searches for their own names, can offer clues to users' identities. (Google no longer transmits search queries when people click on links in the results.)

The deal calls on Google to donate $5.3 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. The settlement also requires Google to pay more than $2.1 million to the attorneys who brought the lawsuit.

A trial judge and the 9th Circuit Court of Appeals rejected Frank's challenge to the settlement. Frank then asked the Supreme Court to consider his arguments.

"All the money went to class counsel and to favored nonprofit organizations affiliated with class counsel and the defendant," Frank argued in a brief asking the Supreme Court to vacate the settlement. "It is not fair or reasonable ... for class attorneys to arrogate millions for themselves and nothing for their clients."

The White House recently weighed in, arguing that Google (and other companies) shouldn't be able to resolve class-actions by making donations to charity unless trial judges have conducted a "rigorous" scrutiny of the deal. The administration asked the Supreme Court to send Google's settlement back to a trial judge for reconsideration.

Google counters that it wasn't practical to distribute the settlement funds directly to users, noting that the settlement would have provided only four cents per class member.

"The costs of identifying, verifying, processing, and paying claims would exceed available funds unless the claims rate was substantially under 1%," Google wrote. "Confirming the claims rate would siphon off still more of the settlement to the claims administrator."

The company added that the fund recipients plan to use the money to advance online privacy. The Stanford Center for Internet and Society's proposal included projects like studying the best way to provide privacy notices on mobile devices, Google wrote.

Several outside organizations, including the Electronic Frontier Foundation and Center for Democracy & Technology, weighed in on Google's side. They argue in a friend-of-the-court brief that a settlement involving charitable donations can benefit web users more than minute monetary awards.

"Awarding funds to an organization that furthers the interests of the class also impacts all class members -- not just the relatively few who would actually receive and cash their checks," the groups wrote in papers filed last week.

The Supreme Court is scheduled to hear arguments in the case on Oct. 31.

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