Privacy Groups Question Beacon Settlement, Facebook's Control Over Foundation

A coalition of privacy organizations are criticizing the proposed $9.5 million settlement of a class-action lawsuit stemming from Facebook's Beacon on the ground that the deal could benefit the social networking site more than its members.

The Electronic Privacy Information Center and five other advocacy groups take issue with the portion of the proposed settlement that calls on Facebook to fund a new privacy foundation with approximately $6 million. The remaining portion of the settlement would go towards attorneys' fees.

"The foundation as proposed is likely to become a public relations organization for Facebook," the groups state in a recent letter to U.S. Magistrate Judge Richard Seeborg in San Jose.

Joining EPIC as signatories are the Center for Digital Democracy, Consumer Action, Consumer Federation of America, Privacy Rights Clearinghouse and Patient Privacy Rights.