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Facebook settles $9.5 million suit on Beacon privacy complaint

Facebook won approval for its $9.5 million settlement of a class action lawsuit related to its controversial Beacon program, which let users track one another’s online purchases.

The company dropped Beacon last November after a dust-up over privacy concerns related to the use of the program. It continues to deny wrongdoing.

On Wednesday, a U.S. District Court judge in San Jose approved the settlement, despite objections by privacy advocates.

As part of the settlement, Facebook will create a "digital trust fund.” Facebook public policy director Tim Sparapani will sit on the board of the fund, which some privacy advocates say is a conflict of interest. Here's a recent interview of Sparapani on C-Span's The Communicators program discussing privacy and other issues. The company will also fund $6 million in grants for online privacy research.

"The independent foundation will fund worthy projects helping protect and improve Internet users' privacy, safety and security," Facebook said in a statement. "We look to providing additional details on the foundation in the weeks and months ahead."

The move comes amid increasing concern by federal regulators and privacy groups over how social networking sites are handling personal data of users. Last December, Facebook changed its privacy settings for its 400 million users, a move that allowed more options for users on how broadly their information could be accessed. But in some cases, it made personal profile information more accessible to the general Internet audience, which caught some users off guard.

Google faced strong criticism last month with the launch of its social networking tool, Google Buzz, which tied user’s profiles to their Gmail account. In some cases, the contacts in a user's address book autmatically became followers of that user on the social networking program.

By by Cecilia Kang  |  March 18, 2010; 7:42 AM ET
Categories:  FTC , Facebook  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: FCC broadband plan heads for congressional scrutiny next week
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