Appeals Judge Approves $9.5 Billion Facebook Settlement to Privacy Trust Fund

Settlement being paid to charity instead of class members because there are so many; dissenting judges pointed to charity's lack of a track record

Internet privacy lawsuits, especially of the class-action variety, have been sprouting up everywhere in the past few years. Some of them have been settled for considerable sums, especially when companies are sued over publicly acknowledged privacy screw-ups that they've already taken heatfor. One of the most notable was the $9.5 million Facebook settlement over its Beacon program, which broadcast users' activities from other websites—including what they bought on various shopping sites—in their Facebook news feed.

The number of Facebook users affected by that class-action case was huge—the class was determined to be 3.6 million users at the end of the day. In part due to the large class, the judge allowed a so-called cy pres award, which is when a payment is made to a charity related to the issues in the case rather than to the actual class members. The Facebook settlement will go to a newly created Digital Trust Foundation (DTF), which will fund initiatives related to Internet privacy. $2.3 million of the settlement money will go to fees for the plaintiffs' attorneys.