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According to a report by Yahoo, the plaintiff attorneys in the class action Facebook privacy settlement over the Beacon advertising program are “trying to fend off critics by suggesting…that privacy organizations are raising objections because they didn’t get a piece of the action.”

In September 2009, Facebook reached a settlement regarding its Beacon advertising program. To learn more, check out our earlier post on appslawblog.com.

In the settlement, Facebook agreed to stop the program and give $9.5 million to a new organization to study online privacy. This was a big turnaround for Facebook after the Beacon debacle.

Like the case’s settlement process, the agreement has hit a bit of a snag. Numerous privacy groups have sent a letter to U.S. District Court Judge Richard Seeborg in the Northern District of California. The groups say they are concerned that the organization Facebook is paying will not be independent. The groups prefer the money be used to fund existing nonprofits serving the same purpose.

An official objection to the class action settlement has already been filed. EPIC attorney Ginger McCall claims the settlement would not provide class members with relief aside from Facebook’s promise to disband the Beacon advertising program, which it voluntarily shut down a while ago. Furthermore, the organization that Facebook would be paying is neither independent nor needed.

There is also an issue with attorneys’ fees for the plaintiffs; one attorney mentioned is Scott Kamber. Multiple parties have complained that the fees are egregious.

The fee issues were to be addressed on Feb. 26, 2010, by Judge Seeborg in Kamber’s motion to approve the settlement.

There are clearly internal questions among the lawyers and parties involved over who should control the settlement fund, an important question to that needs to be resolved.

Should EPIC be in control? What about the new privacy organization Facebook would like to give the money to?

Yahoo reports that the organization would have three directors: Larry Magid, an Internet safety advocate; Chris Hoofnagle, an University of California at Berkeley law professor; and Facebook executive Tim Sparapani. Kamber and Rhodes would be on the legal advisory board.

The organization will supposedly become a “public relations organization for Facebook” and will not protect Internet users.

There certainly appear to be conflicts of interest, depending uponwhomo receives control over the settlement funds.


Joel B. Rothman represents clients in intellectual property infringement litigation involving patents, trademarks, copyrights, trade secrets, defamation, trade libel, unfair competition, unfair and deceptive trade practices, and commercial matters. Joel’s litigation practice also includes significant focus on electronic discovery issues such as e-discovery management and motion practice relating to e-discovery.