Twitter, Instagram, and 6 other tech companies will contribute around $5.3 million to a payment fund for consumers who used their apps between 2009 and 2012 if a settlement for breaching the privacy of users is approved.
The suit began in 2012 when consumers sued a number of social media and messaging companies, and arises from an issue with the Apple iOS “Find Friends” feature. The feature harnesses the user’s location to inform them when people on their contacts list are in the nearby area. However, the apps failed to inform users that their contact list would then be stored on the app company’s internal databases. Consumers argued this was a privacy violation.
The companies involved fought back against the accusation, arguing that for the feature to function, the internal storage was completely necessary. US District Judge Jon Tigar disagreed, ruling that they needed to be more explicit about their storage of personal data.
The settlement filed in San Francisco federal court on Monday includes eight companies in its remit; Instagram, Foursquare, Kik, Gowalla, Foodspotting, Yelp, Twitter, and Path. If confirmed by the judge, the proceeds would be distributed via Amazon credits or check. Due to the millions of people possibly eligible for payments, individual amounts are expected to be quite small.
If the settlement is approved, Apple and LinkedIn would be the only firms among the original 18 defendants who are still part of the case.
Privacy issues are not limited to the early days of apps. Two consumer privacy watchdogs filed a formal complaint to the FTC in response to Whatsapp’s announcement in August of last year that they would start sharing user data with Facebook, their parent company.