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US top court as to endanger Google settlement in internet privacy case

WASHINGTON – The US Supreme court on Wednesday put in jeopardy an $8.5 million settlement, Google has agreed to pay to resolve a class-action lawsuit to accuse of violating a federal law by sharing users ‘ searches with other websites.

FILE PHOTO: The Google logo is pictured at the entrance of the Google offices in London, Britain, 18 January 2019. REUTERS/Hannah McKay

The justices, in an unsigned opinion, threw out a ruling of the San Francisco-based 9th U. S. Circuit Court of Appeals that had upheld the settlement, directing a fresh look at the question of whether the plaintiffs had the legal standing necessary to sue and whether or not they were even harmed by the search engine operator.

Google, a part of the Alphabet Inc., was accused in the lawsuit of violating a 1986 law on the privacy of stored electronic communications.

Justice Clarence Thomas dissented, saying that the increasingly common form of settlement in the heart of the case is “unfair and unreasonable” and should not have been approved by the 9th Circuit.

This so-called “cy pres” (pronounced “see pray”) settlements are used in class action cases when it might be practical to cut to a low value of the individual harm to a large number of the plaintiffs. In adherence to the Google settlement in 2017, the 9th Circuit said that each of the 129 million US users of Google, which theoretically would have claimed that part of the would have received, “a paltry 4 cents in the recovery.”

Proponents have said these schemes may otherwise negligible prices per person to good use by the beneficiary groups working for the public cause or support underfunded entities. Critics have said that they encourage frivolous lawsuits and excessive costs of the plaintiffs lawyers.

Google agreed in the settlement to disclose on its website how users’ search terms to be shared, but is not required to change the behavior. The three main plaintiffs received $5,000 for representing the class. Their lawyers received about $2.1 million.

Under the settlement, much of the rest of the money would go to organizations or projects that promote the privacy of the internet, including at Stanford University and AARP, a lobby group for older Americans, but nothing to the millions of Google users, that the plaintiffs would have represented in the class action.

The settlement was challenged by lawyers including Ted Frank of the Hamilton Lincoln Law Institute, which advocates against what it considers abuse class action procedures.

After the ruling, Frank said he expected the lower court to find that the plaintiffs may sue, and that the problem will soon return to the high court. “The decision simply delays the day of reckoning for these unfair practices,” Frank said.

The case began when a resident of California with the name Paloma Gaos filed a proposed class action lawsuit in 2010 in San Jose federal court.

The prosecutors said that their privacy is violated when their search terms were spread by Google to other sites. They searched for her own name, another for the financial and medical data, and a third for information related to his divorce.

The Supreme court can quickly another opportunity to clarify what is required for claimants in order to attain the legal status necessary to sue. The judges are considering whether to hear a pending appeal by the online shoe retailer Zappos, a subsidiary of Amazon.com Inc, on the demand or customers the right to complain about a 2012 data breach.

Reporting by Andrew Chung; Editing by Will Dunham

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