Google settles Buzz privacy lawsuit

Buzz has been a PR disaster for Google

Google has agreed to pay $8.5m (£5.5m) to settle a class action lawsuit over the Buzz social networking client launched in February, according to widespread reports.

Under the terms of the proposed agreement, seven named claimants will get $2,500 (£1,630) each, and the rest will be deposited into a fund for internet privacy policy improvements and educational organisations.

This is a qualified victory for privacy campaigners, according to Robin Fry, media law partner at Beachcroft LLP.

"In truth the amount payable to each individual shows that the courts don't really place much value on privacy concerns. There are data protection laws but few countries have any strong sanctions," Fry said.

"The commercial message for Google is to keep on innovating, and leveraging the data it collects - but to be ready to pay the occasional fine and have a good PR firm, if anyone squeals."

V3.co.uk contacted Google to discuss the settlement, but the firm had not responded at the time of writing.

Google also announced that it is simplifying its privacy policies to make them "more transparent and understandable".

The search engine firm was widely criticised within hours of launching Buzz earlier this year. Users complained that their privacy had been breached, and the Electronic Privacy Information Centre asked the US Federal Trade Commission to investigate.

Many users were irked that Google had already selected the Gmail accounts they would follow based on their most frequent contacts, and had made all this information public.

Google addressed the concerns, providing the ability to hide Buzz from Gmail or disable it completely, but the damage had been done.