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Monday, November 04, 2013
U.S. Court Wont's Review Facebook 'Beacon' Settlement


The U.S. Supreme Court on Monday denied to review Facebook 's $9.5 million class action settlement over allegations the social networking company's defunct "Beacon" service violated its members' privacy rights.

Chief Justice John Roberts raised concerns about the particular type of settlement in the case and said the Supreme Court might take up another case in the future to clarify the law.

This means the settlement is final.

In November 2007, respondent Facebook, released a program called "Beacon." It worked like this: Whenever someone visited the Web site of a participating company and performed a "trigger" activity, such as posting a comment or buying a product, the program would automatically report the activityand the user's personally identifiable information to Facebook - regardless of whether the user was a Facebook member. If the user was a Facebook member, Facebook would publish the activity on his member profile and broadcast it to everyone in his "friends" network.

Beacon resulted in the dissemination of large amounts of information Facebook members allegedly did not intend to share, provoking a public outcry against Beacon and Facebook.

Facebook responded about a month after Beacon's launch by changing the program's default setting from opt out to opt in, so that any given trigger activity would not appear on a member's profile unless the member explicitly consented. Facebook also allowed its members to disable Beacon altogether.

In August 2008, 19 individuals brought a putative class action lawsuit in the U. S. District Court for the Northern District of California against Facebook and the companies that had participated in Beacon, alleging violations of various federal and state privacy laws. The putative class comprised only those individuals whose personal informa tion had been obtained and disclosed by Beacon during the approximately one-month period in which the program?s default setting was opt out rather than opt in. The complaint sought damages and various forms of equitable relief, including an injunction barring the defendants from continuing the program.

The named plaintiffs reached a settlement agreement with the defendants before class certification. Although Facebook promised to discontinue the "Beacon" program itself, plaintiffs? counsel conceded at the fairness hearing in the District Court that nothing in the settlement would preclude Facebook from reinstituting the same program with a new name.

And while Facebook also agreed to pay $9.5 million. Four users who were part of the class action lawsuit objected to the settlement, which set up a not-for-profit group that addresses online privacy rights. They claimed it gave nothing of value to the approximately 3.5 million plaintiffs.

In his statement on Monday, Justice John Roberts noted that settlements similar to those in the Facebook case, in which the majority of plaintiffs get no damages, with the money put to another use, have become increasingly common in the class action context.

"In a suitable case, this court may need to clarify the limits on the use of such remedies," he said.




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