Ninth U.S. Circuit Court Of Appeals Upholds Facebook Beacon Class-Action Settlement

The $9.5 million settlement in a class-action lawsuit over Facebook’s now-defunct Beacon program, initially announced nearly three years ago (March 2010), will stand despite objections from six judges on the Ninth U.S. Circuit Court of Appeals.

Beacon was introduced by the social network in 2007, and it monitored and shared users’ non-Facebook online activity, such as purchases from Overstock.com or rentals from Blockbuster.

The Ninth U.S. Circuit Court of Appeals initially approved the settlement last September, and Reuters reported that the court published an order Tuesday saying it would not reconsider the ruling before a larger 11-judge panel.

Under terms of the settlement, $2.3 million of the money will go toward attorneys’ fees, with the rest earmarked for the creation of a digital trust foundation to “fund and sponsor programs designed to educate users, regulators, and enterprises regarding critical issues relating to protection of identity and personal information online through user control, and to protect users from online threats.”

However, the DTF was not satisfactory to the six dissenting judges, with Judge Milan Smith writing that the DTF has no service record and does not remedy issues identified in the lawsuit, according to Reuters, and adding:

The DTF can teach Facebook users how to create strong passwords, tinker with their privacy settings, and generally be more cautious online, but it can’t teach users how to protect themselves from Facebook’s deliberate misconduct, unless, of course the DTF teaches Facebook users not to use Facebook. That seems unlikely.

Forbes reported that Smith also wrote:

(Plaintiffs’ claims) have nothing to do with users’ lack of “education” or “control.” Instead, they relate to misconduct by Internet companies that wrongfully expose private information in ways that even educated users cannot anticipate, prevent, or direct.

Facebook Manager, Public Policy and Communications Andrew Noyes told Reuters the social network was happy with the decision by the Ninth Circuit, adding:

(The DTF) will fund worthy projects that will help protect and improve Internet users’ privacy, safety, and security.

Readers: Is the Beacon saga finally over?

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