Clever: Facebook Funds A Privacy Watchdog Group

Lap dogFerocious, isn’t he?

Photo: Paul L. Nettles

Smart move: Thanks to a legal settlement finalised today, many of the privacy watchdogs watching Facebook will soon seek funding from Facebook.Remember how, in 2007, Facebook got in a hot mess when it launched a product called Beacon? (That was the ad product, which, unless users opted out of it, broadcasted Facebook users’ activity on third-party sites back to Facebook for all those users’ friends to see.)

Because a few of Facebook’s Beacon partners were e-commerce sites, the product ruined a few Christmas surprises and at least one engagement. (We also remember one user being upset that all her friends learned what kind of underwear she bought from

Anyway, today, Facebook finally settled a class action lawsuit over the ordeal. Without admitting any wrong-doing, Facebook agreed to pay litigants who joined the suit $9.5 million in damages.

That’s a nice pay day for the class-action lawyer, but here’s the news that excites us: As a part of the settlement, Facebook also agreed to finance a $6 million “digital trust fund” that will, according to the LA Times, dole out cash to “organisations that study online privacy.”

The foundation will be chaired by UC Berkeley’s Chris Jay Hoofnagle, Facebook’s public policy director Tim Sparapani, and privacy advocate Larry Magid — whose nonprofit organisation counts Facebook as one of its “supporters.”

According to Jeffrey Chester, executive director of the centre for Digital Democracy, that $6 million foundation will make Facebook’s foundation the richest grant-giving online privacy oriented organisation around.

Here’s what’s so very clever about that: The privacy watchdogs who are supposed to be watching Facebook — organisations starved for cash include watchdogs like the Electronic Frontier Foundation — will now find themselves asking for cash from a foundation funded by Facebook and co-chaired by who depend on Facebook for their salaries.

Jeffrey Chester calls this setup “shameful.” We have a better word: genius!

Facebook reached us with the following statement on the settlement:

“We’re pleased that Judge Seeborg has approved the settlement after carefully considering all opinions.  The independent foundation will fund worthy projects helping protect and improve Internet users’ privacy, safety and security. We look forward to providing additional details on the foundation in the weeks and months ahead.”

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