If the avalanche of recent stories is any indication, the world’s tech giants have failed to fully respect and protect our personal privacy choices. In response, my office, the Arizona Attorney General’s Office, as well as other law enforcement agencies, are taking action to protect consumers. Last month, I joined a bipartisan coalition of states that inked a settlement with Uber over privacy failings, which will provide eligible Uber drivers with $100 each, providing restitution to millions whose privacy was violated.
But there are also other key aspects of protecting consumers from privacy predations. One example is a case the United States Supreme Court is going to hear on Halloween, which could be a major step forward not only in ensuring that tech giants start taking privacy issues more seriously but also in protecting consumers from class action settlement abuse, which is especially rampant in privacy cases. {mosads}
The case is called Frank v. Gaos. At the core of the case is an aspect of class action settlements — especially popular in privacy cases — in which big tech companies settle and extinguish the privacy claims of tens (or hundreds) of millions of consumers in exchange for multi-million dollar payments to class action lawyers and major tech-friendly universities, with no money going to consumers. Indeed, in Frank v. Gaos, the settlement would release over a hundred million consumers’ claims, but none of the $8.5 million or so from Google will go to everyday consumers. Instead, over $2 million will go to class action attorneys, and once costs and fees are covered, the remainder will go to Google’s handpicked “charities” in academia, which are completely unrelated to the litigation.
What this all really means is the harmed consumer gets nothing.
My office has led a bipartisan push against these settlements (which are called cy pres-only settlements) because these deals leave consumers out in the cold and are a quintessential example of class action settlement abuse, where class action lawyers and defendant companies craft deals to benefit themselves at the expense of consumers.
While it is certainly true that not every case has merit, it seems obvious that sleight-of-hand settlement arrangements like the one in Frank v. Gaos aren’t part of the solution; they leave consumers without a leg to stand on, and help propagate an ongoing trend of tech giants taking our privacy concerns for granted.
Instead of letting big tech companies send money to the universities they already donate to and recruit from, I urge the courts to demand that settlements be designed to directly benefit the class members who give up their claims as part of the settlement. Not only would this help stop class action settlement abuse, it would also help ensure these tech giants take privacy more seriously.
The accountability for these large tech companies seems to be lacking when they are capable of settling massive, hundred-million-person privacy cases by paying the lawyers a few million dollars and donating several million more to universities that already have strong ties to big tech companies.
Stopping class action settlement abuse, protecting consumer privacy, and holding tech giants to account for their privacy practices are huge, complex issues. But the United States Supreme Court this term has a rare chance in Frank v. Gaos to strike a dual blow on behalf of consumers by shutting down a particularly pernicious type of class action settlement abuse while also indirectly pushing the world’s tech giants to take personal privacy issues more seriously. Let’s hope the Supreme Court seizes this opportunity and comes through for everyday consumers. I know I will be watching closely.
Mark Brnovich is the Arizona attorney general.