back to article Supremes asked to mull legality of Silicon Valley privacy 'slush funds'

Nothing expresses Silicon Valley's cynicism about privacy like its fondness for rewarding its friends from privacy class-action settlements – while class members get nothing. Now the US Supreme Court has been invited to consider whether such settlements are fair. These so-called cy pres settlements exploit a legal quirk, ("as …

  1. JohnFen Silver badge

    Color me unsurprised

    "Google was the first to pioneer a new use for this."


    1. Charlie Clark Silver badge

      Re: Color me unsurprised

      Should be rephrased as "the first that was smart enough to use this". Like them or hate them, you've got to give them their due when it comes to running the business.

      1. Eddy Ito Silver badge

        Re: Color me unsurprised

        Not exactly first. It was actually the Cali Supreme Court endorsed cy pres settlements for class action suits as far back as the mid '80s and it's since spread rather nicely. Think of it as a legal analog to monkeys -> typewriters -> Shakespeare only in this case it's lawyers -> digging -> loophole.

      2. JohnFen Silver badge

        Re: Color me unsurprised

        " you've got to give them their due when it comes to running the business."

        No, I don't. Running a business in an unethical fashion doesn't earn any praise.

      3. Anonymous Coward
        Anonymous Coward

        Re: Color me unsurprised

        Like them or hate them, you've got to give them their due when it comes to running the business breaking the law.

        Fixed it for you. Yet another example of how they are IMHO following Microsoft's playbook to the letter (and have been pretty much from day one).

    2. Mark 65 Silver badge

      Re: Color me unsurprised

      Goes to highlight, for me at least, just how fucked up the USA is as a society. No wonder they ended up electing an unstable wiggy orange muppet in a last gasp act of desperation.

      Is the constitution just a token veneer over a turd sandwich?

      1. Eddy Ito Silver badge

        Re: Color me unsurprised

        Is the constitution just a token veneer over a turd sandwich?

        It has been since at least the Volstead Act.

  2. frank ly Silver badge

    Good choice of picture

    With more than one interpretation.

  3. israel_hands

    Good article. Nice to see that the author can occasionally produce something that shines a light on truly dubious practices without resorting to badly-targeted snark and nonsensical arguments. I also noted the lack of axe-grinding and reporting something that does very well at highlighting something most people are probably unaware of (myself included).

    As to the actual report, while I've always known that participants in a class-action get approximately fuck all of the eventual payout, I wasn't aware that it was literally fuck all. I shouldn't really be surprised that the American legal system has invented even more ways of fucking over plaintiffs in order to enrich lawyers but this really does take the piss all the way to the bank.

    The only way something like this would be even vaguely justifiable is if a) the amount of the settlement actually hurt the company involved and made it cost more than it earns (otherwise it just becomes another cost of doing business)*, b) any money received by groups like the EFF is immediately reinvested in monitoring them for further infractions and funding further action against privacy infringing companies and c) there is a legal ruling which involves the abusive companies admitting wrongdoing and explicitly banning anyone from such actions in future (after all, things like this should be seen as a test case and therefore set a precedent).

    Without all 3 of those stipulations in place it's a complete joke that achieves nothing for those that have been wronged and also allows large companies to exert more undue influence over the very groups that are supposedly working to hold them accountable. If they were going to be providing some funding to those groups anyway (as I gather they often do) it's like a Buy One Get One Free deal, they get to brush a legal action under the carpet and economically undermine groups that could prove to be a thorn in their side.

    * I've always been a proponent of the idea that fines for activity like this should equal something along the lines of: (total revenue during period of infringement) + (some amount determined by egregiousness of the activity). That may seem quite harsh but it would go some ways to restoring the balance of power between citizens and corporations and drastically reduce the number of times companies decide to do something dubious because the benefit will easily outweigh the eventual legal costs. An example of what this should target is when Google was stealing people's wi-fi data "accidentally" and got away with nothing more than a mealy-mouthed apology.

    1. Anonymous Coward
      Anonymous Coward

      Good article. Nice to see that the author can occasionally produce something that shines a light on truly dubious practices without resorting to badly-targeted snark and nonsensical arguments.

      Occasionally? Orlowski is one of the few journalists I respect. He may not be particularly popular with the audience here because he says things they don't want to hear (yet). He was one of the first journalists to criticize Google, and EFF, when they were the darlings of the technorati. And history has proven him right.

  4. Rich 2


    OK, I admit it - I'm realy stupid, but I don't get it.

    How can A sue B, and win, resulting in B paying damages to C? How can the court allow this? Why doesn't A go back to court and say "Oi, WTF???"

    Indeed, WTF??? Bamboozled.

    1. Yet Another Anonymous coward Silver badge

      Re: Eh?

      Because in a class action you normally can't identify all of A, so the court lets a law firm represent all of A and choose how to distribute the payout to them. In this case they claim that giving the payout to C is just as good.

      Say birdwatchers sue a pesticide maker because its product kills birds. You can't prove which individual birdwatchers were harmed so everyone agree to give the money to the RSPB = a good result.

      Only in this case you give the money back to the pesticide maker if it claims it will do some bird watching one day.

      1. Anonymous Coward
        Anonymous Coward

        Re: Eh?

        "so everyone agree to give the money to the RSPB" ... and pesticide make can remind RSPB where all their money has come from if they start to investigate too hard again ,,,, "= good result"

    2. SImon Hobson Silver badge

      Re: Eh?

      How can A sue B, and win, resulting in B paying damages to C?

      Indeed, WTF !

      As I read it, it sounds like something that was intended for a situation where the court awards a payout to a class of people and the cash is put into trust to be paid out to the class of plaintiffs - so far, so good. Of course, where "class of persons" runs to hundred, thousands, ... then some won't come forward to collect - and that means there will be some money left in the kitty when the trustees decide that they've paid out to everyone they can.

      So this rule allows that residual small amount can be given to charity. Which when used for it's original purpose seems perfectly sensible.

      What's happened here though is that they're obviously taking the urine - paying out only to the named plaintiffs (to shut them up), paying out a token (null) amount to everyone else, and then declaring the rest as this "small residual amount" and giving it to "charity". Totally taking the urine.

    3. Youngone Silver badge

      Re: Eh?

      Dear Rich 2,

      You may have been under the mistaken impression that the courts are there to ensure justice.

      They are not.

      1. Anonymous Coward
        Anonymous Coward

        Re: Eh?

        The courts ARE there to serve justice, they're ultimately the best hope for it, and they often succeed - though less than hoped for.

        If this saga ends with 'cy pres awards' deprecated in favor of plain old government fines, that's justice enough for me.

    4. G Olson

      Re: Eh?

      In the article it specifically states this problem is created by the 9th Circuit Appeals Court in San Francisco. All other Appeals Courts routinely throw these cases out. The 9th Circuit is the most reversed federal appeals court in the USA. Once again corruption, lawlessness, and ignorance from the San Francisco government mafia.

  5. bombastic bob Silver badge

    EFF appearance of impropriety

    Considering what the article said about the EFF, I have to wonder if the appearance of impropriety, i.e. taking money from Google (and maybe Facebook), and then declaring that there are no privacy violations with either of these [both known to hoover up our information and track us], even though it's always "opt out" and never "opt in". And in some cases I suspect there _IS_ no 'opt out'. Youtube is apparently NOT complying with privacy settings when you select "do not track", as one example, so when I look at embedded youtube on a web page, I often see a 'privacy settings' warning [I didn't want autoplay videos anyway, so it's just as well].

    The message I typically see looks like this (in lieu of the embedded video):

    "This embedded content is from a site (,, etc) that does not comply with the Do Not Track (DNT) setting now enabled on your browser." And there is a button to view the embedded content.

    (this was on a site that apparently serves up that particular warning if it detects you selected "do not track" options in the browser)

    OK, so _HOW_ can Google (owner of youtube) get any kind of FAVORABLE acclaim from EFF regarding privacy, when they (allegedly) do NOT comply with the 'do not track' policy you select in the browser???

    Or, the site that serves up that particular warning ought to stop misleading people... assuming they're NOT correct (and I suspect they _ARE_ correct).

    Methinks there is a foul smell in the air, and it's not a good one for privacy for the individual.

    I like a lot of what the EFF does and stands for. Some of it irritates me. If sending them money could sway their position on a few things, then I might consider it, if I _HAD_ that kind of money, at any rate...

  6. Doctor Syntax Silver badge

    A nice outcome from the supremes would be a retrospective judgement that the class member should also get a payout - hands back in the pocket to find a bit more change.

    If the prospect of a reasonable payout isn't that good why join the class action instead of just going to the small claims court?

    1. I ain't Spartacus Gold badge

      One of my favourite judgements in the US was in California. Starbucks had been stealing taking a portion of the money from the tips jar and assigning it as part of the store managers' bonuses. I presume the rationale was that more tips = happier customers = better manager. Though we all know it was really about being low-paying slave-drivers.

      So the judge ruled it illegal and made them stop. Then because they'd got records of the missing money, he made them find all 45,000-odd people they'd employed in California over the last 15 years - work out how much they'd lost (it was probably only going to be a few dollars each for most), track them down and pay them back.

      I don't think it was all that expensive in terms of money paid out - but the admin cost and hassle must have been a right bastard. So a nice disincentive.

  7. Anonymous Coward
    Anonymous Coward

    The US 'Justice' system in corrupt shocker

    Also lawyers are sharks, and billion dollar US megacorps have no ethics.

    News at 10.

  8. Nocroman

    Only the greedy win

    I Think that the awards by the court should come out of the pockets of the CEO and Board members of the company the class action lawsuit was filed against and won by the people that had to take that company to court to make them follow the laws be a responsible and honest business. The lawyers of the defending company when it loses should only be allowed to collect it's fee's from the company. The lawyer fee's for the class action participants should also be assed to the company that lost so all the money awarded goes to the victims that had to take a dishonest company to courts to get justice.

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