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Feb. 2 - Facebook Fails to Address Privacy Concerns in Proposed Class-Action Lawsuit Settlement

Facebook and Lawyers Will Benefit But Not Social Network’s Users

Facebook’s solution to complaints that it violated the privacy rights of potentially millions of its users is no solution at all, Public Citizen said in opposing the settlement of a class-action lawsuit that was filed against the social networking giant.

The central piece of the proposed settlement is the creation of a nonprofit foundation that would largely be controlled by Facebook. The foundation would be charged with funding projects and initiatives that "promote the cause of online privacy, safety, and security," which Public Citizen attorney Greg Beck likens to putting the fox in charge of the henhouse.

Under the proposed settlement, Facebook would pay $9.5 million into a settlement fund, with as much as a third of that money going to pay the class-action attorneys. The remaining money would go toward the creation of the new privacy foundation. Facebook would choose one of the foundation’s three directors and have an equal say in the selection of a second. Facebook has already selected its own chief lobbyist to sit on the foundation’s board.

At the heart of the class action lawsuit is Facebook’s Beacon marketing program. Facebook users complained that online purchases they made from merchandisers participating in the Beacon program were published on Facebook without their permission. Although under the settlement Facebook would terminate Beacon, Facebook had already essentially ended the program before the lawsuit was filed in response to widespread negative publicity.

"Facebook and the lawyers in this case will benefit from this proposed settlement, but it is virtually worthless to Facebook users who are part of this class action," said Beck, who, along with D.C. lawyer Philip Friedman and Mark Chavez of Chavez & Gertler in San Francisco, represents D.C. resident Ginger McCall in her objection to the proposed settlement. McCall was shocked when she learned that Facebook had published on her profile the titles of movies she rented from Blockbuster’s Web site in 2007 and 2008.

There is no need for an online privacy foundation when several nonprofit organizations dedicated to the issue already exist, Beck said. It’s also troubling that Facebook, a site whose very mission is to make private details of its users readily available to the world at large, would be involved in managing such a foundation, he said. Additionally, closing the essentially defunct Beacon program is a token gesture of no value to class members, Beck said.

Public Citizen is asking the court to reject the proposed settlement.

To view Public Citizen’s objections, go to http://www.citizen.org/litigation/forms/cases/CaseDetails.cfm?cID=597. 

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