Over two years ago, Facebook launched a tracking initiative called Beacon, designed to monitor users' online activities and share that data with advertising partners without explicit user consent. This covert approach to behavioral advertising faced immediate backlash, leading to a class-action lawsuit against the company once it removed most of Beacon from its platform.

Last September, Facebook proposed a settlement in which it would allocate approximately $9.5 million of its own funds to establish a foundation aimed at educating the public about digital privacy and online safety. This arrangement is a classic example of a cy près settlement, a legal concept originating from French that means "the next best thing," intended to benefit the class members indirectly.

However, advocacy groups have voiced strong opposition to this proposal. Public Knowledge, in a court statement filed recently, criticized the settlement as an inadequate remedy. They questioned why Facebook should fund its own foundation when established organizations already work tirelessly to promote online privacy awareness. According to Public Citizen, the proposed foundation is unnecessary and improperly influenced by Facebook's leadership, including its founder and CEO, who have expressed skepticism about the importance of privacy rights.

The groups argue that Facebook's payment effectively amounts to the company paying itself to settle legal claims—an abuse of the cy près mechanism—while retaining significant control over the foundation. They also point out that this arrangement grants Facebook unwarranted influence over a project meant to serve the public interest, rather than merely compensating users for privacy violations.

Public Citizen has demanded at least $2,500 in compensation for each person affected by Facebook's practices, citing the precedent set by the Video Privacy Protection Act, which was enacted to prevent misuse of consumer viewing data. Notably, advocacy groups are not requesting the creation of additional policy organizations urging social media platforms to be more transparent or cautious, as they believe existing entities like the Electronic Privacy Information Center, Electronic Frontier Foundation, Privacy Rights Clearinghouse, Center for Digital Democracy, and the World Privacy Forum are already fulfilling that role effectively and independently of Facebook.

Furthermore, several organizations, including the Electronic Privacy Information Center and the Center for Digital Democracy, submitted joint objections, emphasizing that Facebook's core issue is its illegal disclosure of personal data, not a lack of user education. They contend that establishing a foundation primarily focused on educating users about business practices does little to address the harm caused by actual privacy breaches.

Legal experts have also voiced skepticism. David Johnson, a digital media attorney from Jeffer Mangels Butler & Marmaro LLP, criticized the settlement, arguing that Facebook is already legally obligated to protect user privacy and security. He observed that the proposed fund would simply redirect money that Facebook should be using to comply with existing laws—effectively allowing the company to fund initiatives it is already required to undertake, without meaningful accountability or additional protections for users.

Since the proposed settlement, Facebook has maintained a silent stance, declaring the matter closed last September. The court in San Jose granted preliminary approval to the deal in October, with final approval pending the court’s review of public comments received during the interim period.

(Note: An earlier version of this report incorrectly identified the intervening organization as Public Knowledge, when it was actually Public Citizen. The mistake has been corrected, and apologies issued to both groups.)

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