Settlements of privacy-based legal challenges to practices of big tech companies often include as one component a contribution by the offending tech giant (e.g. Facebook) to various privacy groups. This thought-provoking article from gigaom asks: is that money well-used, well-planned for? Do these settlements do any good?
The article explains:
In [several prominent privacy cases], the class action system appeared, on the
surface, to be doing its job: punishing companies through a legal
process more powerful than what a single citizen could muster on his or
her own. In theory, every user who suffered a privacy violation received
a bit of compensation while the tech companies learned to be more
careful about privacy.
Unfortunately, it hasn’t worked out that way. As with the first
version of the “Sponsored Stories” settlement, users in the other
privacy cases didn’t get any of the millions paid out in their name;
instead, the deals paid money to lawyers and to privacy groups for
Make sure to check out the chart at the bottom, in which the reporter documents what he learned when he asked some of the recipients of one recent such award (in the Facebook Sponsored Stories case, which we've been litigating here at Public Citizen and have now appealed) what they are going to do with the money. Some eye opening responses there, including one foundation that says it did not ask for the money and will decline it.