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    Bloomberg: Facebook Wins Approval to Create Privacy Group

    Bloomberg reports on a court settlement for social-networking site Facebook:

    A federal judge approved Facebook Inc.’s settlement of a lawsuit that provides $9.5 million for a privacy foundation created by the company and lawyer fees, with no money for users who sued.

    U.S. District Court Judge Richard Seeborg in San Jose, California, said the foundation is a better use of the settlement money than splitting it among the 3.7 million consumers represented in the group, or class action, lawsuit, according to court papers filed today. Most of the consumers in the lawsuit, which alleged privacy violations, approve the accord, he said in ruling that the settlement was fair.

    Seeborg also ruled that there’s no evidence that the foundation will be “under Facebook’s direct control.” Two- thirds of the settlement will fund a nonprofit foundation that finances projects to promote online privacy, court records say. Facebook will provide the initial foundation bylaws with lawyers for customers and one of three foundation directors may be chosen by Facebook, according to court filings. [...]

    The lawsuit, filed in 2008, involved a program started by Facebook in 2007 called Beacon, which collected information about users’ online activities, including purchases. The complaint alleged that Facebook obtained the information without users’ informed consent. Facebook denied wrongdoing. The company terminated Beacon after Seeborg granted preliminary approval of the settlement in October, Kamber said.

    Mark Chavez, an attorney for one of four members of the plaintiffs’ group to file an objection to the settlement, said he was considering whether to appeal the judge’s ruling. [...]

    The case is Lane v. Facebook, 08-3845, U.S. District Court, Northern District of California (San Jose).

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