• by Wendy Davis  @wendyndavis, December 16, 2022

Meta Platforms' proposed $37.5 million settlement of a privacy class-action hit a snag on Thursday, when a federal judge refused to grant the deal preliminary approval.

The tentative deal would have resolved a lawsuit alleging that Meta collected users' IP addresses, which reveal general information about location, in violation of a prior privacy policy.

The settlement would have allowed people used Facebook between January 30, 2015 and April 18, 2018, and who turned off location services on Android or Apple mobile devices, to submit claims for a portion of the settlement fund.

Class counsel estimated that around 70 million people would be eligible to submit claims, and that around 1 million would do so. Counsel said in motion papers filed in August that the 70 million figure was “subject to certain limitations,” because Meta was “unable to identify the class members with the available data.”

U.S. District Court Judge James Donato said Thursday that he was denying preliminary approval for several reasons, including that the lawyers didn't provide enough information about how they determined 70 million people would be eligible to make claims.

He said he was also concerned that the $37.5 million wasn't reasonable, given the estimated 70 million people who were affected.

Donato gave the lawyers until February 15 to revise their request for settlement approval, and also directed them to address whether it would be appropriate to require Meta to make payments to public interest organizations, instead of individual users.

The litigation dates to 2018, when users including Brendan Lundy and Myriah Watkins alleged that Facebook collected their IP addresses, which provided estimated locations, then deployed “enhanced tracking methodologies” to more precisely pinpoint geolocation.

The Facebook users raised several claims, including that the company allegedly violated a privacy policy in effect between 2015 and April of 2018. That policy said Facebook wouldn't collect location data without users' consent.

In April of 2018, Facebook revised its policy to disclose that it collects IP addresses, which can offer broad information about users' locations, such as which cities people are in when they access the web.