Privacy Class Action Lawsuit: Social Media Companies Reach $5.3M Settlement

A number of major tech companies have agreed to a $5.3m settlement in a privacy class action lawsuit. The suit accused the company of gaining access to the address book of iOS users without consent.

If the court grants its approval, Foursquare, Gowalla, Instagram, Foodspotting, Kik, Path, Twitter, and Yelp will create a fund which will pay about 0.53 per user. The number of affected users is about 7 million.

The companies will make the settlement via Amazon accounts. Unless users request a payment in form of a check. Any unclaimed funds from the settlement will go to the Electronic Frontier Foundation.

When Did It All Start?

The privacy class action lawsuit was filed back in 2012. It claimed that the mentioned social media companies used “unconscionable, illegal practices” to access the contacts. According to the suit, such actions are equivalent to contacts being “accessed and stolen.”

The same privacy lawsuit was concerned with social media and messaging companies including Apple over the use of an iOS tool called “Find Friends.”

The Federal Trade Commission also participated in the investigation. It resulted in an $800,000 settlement for Path for its illegal practices. A settlement hearing with U.S. District Judge Jon Tigar of the Northern District of California will take place at 2 p.m. local time on May 25. If the court approves, it would apply to iOS users whose contacts social media companies viewed without permission between 2010 and February 2012.

How Did the Companies Respond?

The companies reacted saying that storing contact lists on their services is necessary for “Find Friends” to function properly. They also claim that they had received a permission to do so. However, U.S. District Judge Jon Tigar did not agree. Last year in September Tigar ruled that the companies failed to convey the reasons behind contact storage explicitly to users.

Tiger also dismissed the argument that when users agree to privacy policy they do give consent for the data transfer. Moreover, privacy terms were not available on screen in the apps. Instead, a user could access those with a link to an informational web page.

The eight companies will be out of the privacy class action lawsuit if the judge approves the settlement. However, the class action will still be active. While 18 defendants participated in the beginning, now only Apple and LinkedIn will continue the fight.

The settlement urges the companies to inform affected users by email, or in the case of Twitter with a promoted tweet with the handle of “@settlementnews.”

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