Facebook's Lame Settlement Offer for Privacy Violations

| by Public Citizen

By Joe Newman

The folks at Facebook would like you to know that they’re concerned about your privacy. So much that they’re willing to create a nonprofit foundation dedicated to online privacy, while at the same time profiting hugely from their business of allowing you to make your most private thoughts and moments available to anyone you’ve ever met. Facebook’s offer to create the foundation is part of its proposal to settle a class-action lawsuit brought against it for violating the privacy of its users.

If you recall, the case involves Facebook’s Beacon marketing program, which back in 2007 and 2008 let all of your Facebook friends know about stuff you bought online. Well, on Monday, Public Citizen filed an objection to the proposed settlement, saying that it did a lot for Facebook and the lawyers in the case but very little for Facebook users.

From the Public Citizen news release:

WASHINGTON -- 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 today 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 chooseone 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.