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The Google Class Action Scam Continues at Scale

September 6, 2014

Here’s the way that some people think Google plays the class action scam, a long con on the grift.  Do something horrendous to a lot of users, say millions of users.  Find some relatively benign lawyers to sue you in a class action.  Agree to a settlement where the lawyers get a bunch of money, the class gets virtually nothing, but you pay out a pile of cash to advocacy groups who do your bidding anyway.  

In one fell swoop Google gets rid of the legal liability from millions of users through the class settlement, it costs the company virtually nothing, and they get to siphon money to their BFFs in academia to pay for more lobbying work or maybe just some money in the tip jar.

And by the way, other Silicon Valley companies such as Facebook are learning from Google, so it’s not just Google.  We developed a chart for the Google Buzz and Facebook Sponsored Stories class action settlements.  Now we have a third settlement to add to the chart, the Google “header referral privacy litigation” involving massive violations by Google of its users privacy.  (In Re Google Referrer Header Privacy Litigation, Case Number 5:10-cv-04809-EJD, U.S. District Court for the Northern District of California, San Jose Division.)

Andrew Orlowski in The Register tells us that:

In 2010 a group of consumers alleged that Google “leaked” personal information about search users to third party marketeers. Their class action lawsuit alleges that Google violated its own privacy policy by including search terms in the referrer header. That information is transmitted to sites listed in Google search results whenever a user clicks a link.

Certain types of searches, therefore – such as the user’s own name – can be argued to comprise personal data, according to the plaintiffs. The alleged breach comes about when that “personal data” is transmitted to the website receiving the user’s click from the search results.

The case is another “cy pres” settlement in a series of privacy cases against Facebook and Google. It’s fascinating for revealing cosy relationships between what should be the poacher and the gamekeeper.


Cy pres
 allows the judge to award payouts to intermediaries, leaving nothing to individuals, and it’s skewed the incentives for all those involved in the litigation in a way critics find disturbing. Far from watching your back, digital rights groups and activist academics have an incentive to make a tame settlement quickly, pocketing a substantial amount of cash, but leaving nothing for the ordinary Jane or Joe whose privacy was violated by the tech giant.

Cy pres awards are usually proposed by the class action lawyers after some negotiation with…well, some kind of negotiation.  Or at least discussion.  Or perhaps instruction.  The other thing to remember is that there really are very few strings attached to the awards.  It looks a lot like…well, you know.  

Money.

Once the class lawyers propose the cy pres award, it becomes part of the class action settlement and that settlement has to be approved by the presiding judge.  U.S. District Judge Edward J. Davila, the judge in the header class action, has rejected–apparently twice–the class lawyers’ proposed cy pres awards in the cozy settlement.  Ted Frank of the Center for Class Action Fairness summed it up nicely:  “Google is paying $2 million to get rid of the case, and the attorneys are taking it all for themselves.”  (Google will make over $2,000,000 before you finish reading this post.)

Judge Davila laid out pretty clearly what his problems were (according to Bloomberg):

“The elephant in the room is that many of [the cy pres recipients] are law schools that you [the lawyers representing the class] attended,” Davila said. The judge said he had expected a wider net to be cast, and that it was exactly the same list of recipients as the lawyers presented to him a year ago.

“I’m disappointed that the usual suspects are still usual,” Davila said. The lack of transparency in the selection process “raises a red flag” and “doesn’t pass the smell test,” he said.

So it sounds like in the courthouse of the Northern District of California, the word is out–you do not want to be the judge who gets overturned by the U.S. Supreme Court for approving a scummy crony-capitalist class action settlement.

Here’s our chart updated with the proposed “Header” cy pres recipients (“Google $$” column are direct payments from Google per the Washington Post:

Cy Pres

  1. David Sanford
    September 6, 2014 at 17:45

    The whole Cy Pres scheme is intrinsically crooked, rips off the actual victims, and rewards the wrongdoer. It is outrageous for the lawyers to even get a penny without serious payment to the class of victims. It is equally outrageous for the money stolen from the class members to be given to 3rd party organizations based on what stinks as nothing but “good old boy” cronyism.

    If the judges showed integrity they would say “no way” to cy pres settlements and “no way in hell” to settlements in which the class members do not receive serious compensation

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