31 August 2017
The United States Court of Appeals for the Ninth Circuit (‘the Court of Appeals’) issued, on 22 August 2017, its ruling in Paloma Gaos et. al. v. Google, Inc., in which it held that the District Court for the Northern District of California had not abused its discretion by approving a class action settlement brought by users of the search engine, on grounds that Google had violated their privacy by disclosing their search terms to third parties. The settlement requires Google to pay a total of $8.5 million, of which $5.3 million will be allocated to six cy pres recipients, and to provide information on its website disclosing how users’ search terms are shared with third parties.
Joan Antokol, Managing Partner at Park Legal LLC, told DataGuidance, “This case is surprising for a number of reasons. First, the Court of Appeals noted that the claimed privacy violations were attributable to ‘browser architecture.’ In doing so, it left the inference that Google wasn’t to blame for sharing the search terms with third parties […] Second, the Court of Appeals approved a settlement of $8.5 million while acknowledging that the potential privacy violations affected 129 million Americans. If the proceeds of the settlement were distributed evenly to the 129 million affected Americans, it would amount to four cents per individual. Rather than acknowledge how grossly insufficient a four cent per person settlement would be, the Court of Appeals agreed to a cy pres equitable settlement and disbursed the proceeds to six non-profit organisations that will help promote privacy on the internet. They justified that distribution on the basis that they weren’t able to identify the actual affected individuals.”
Companies that fail to make disclosures in their website privacy statements, or do so in a deceptive or unfair way, can be subject to FTC enforcement as well as enforcement under certain state laws
In this regard Antokol highlighted, “Companies that fail to make disclosures in their website privacy statements, or do so in a deceptive or unfair way, can be subject to Federal Trade Commission (‘FTC’) enforcement as well as enforcement under certain state laws […] California courts generally go out of their way to support individuals who claim that their rights have been violated, but in this case maybe they also took into consideration that Google is headquartered in California.”
FELICITY TURTON | Privacy Analyst