Facebook to settle Canadian class-action by paying lawyer’s fees

Editor’s Note: Read an updated version of this story here.

Facebook will pay $76,000 to a Winnipeg-based law firm representing nearly half of all Canadians in a class-action lawsuit stemming from privacy concerns.

Merchant Law Group LLP issued a notice today that Facebook will pay the lawyers who handled the suit $75,000 and class representative Patrice St. Arnaud $1,000 to settle the case. The suit includes all Canadians who were members of Facebook between December 2009 and January 2010, except for those who opted out of the suit.

The law firm launched litigation against Canada’s most widely-used social networking site charging that Facebook’s users were deceived by Facebook’s misrepresentation of its updated privacy settings at the time. Users were prompted to review their privacy settings by Facebook at the time, but anything left unchanged from the default setting allowed Facebook to share information with third parties, according to the firm, which was not the default before the settings change.

“We see it as a process of bait and switch where they tell people that their privacy is being improved, but for almost all of their customers, those customers rely on a traditional level of privacy,” said Tony Merchant, head of Merchant Law Group. “When changes were made, the default position allowed Facebook to harvest and mine their personal information for Facebook’s commercial purposes.”

The settlement will be brought to a Montreal court room Feb. 9, 2012 to be approved by a judge. Any member of the class defined in the suit has 45 days from Dec. 5, the publication of the Notice of Settlement, to opt out and seek other legal options.

Merchant’s class-action suit against Facebook may be the largest in Canadian history in terms of the number of claimants involved. In addition to the class action litigation, Facebook is under an ongoing investigation by the Privacy Commissioner of Canada due to a complaint lodged in January 2010.

Merchant is known for representing high profile class-action suits in Canada, including acting as representation for the native residential school students, and taking action against HSBC Mutural Funds and Winners/Homesense.

Facebook also agrees to keep its privacy policy substantially the same for three years since publishing the updated policy, the settlement says.

A Facebook spokesperson could not be reached at time of publication.

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