A relatively easy solution to a lawsuit against Google for alleged privacy violations has been torpedoed by an appeals court.

The 3rd U.S. Circuit Court of Appeals refused to endorse a proposal that would have ended a case over an internet browser “cookie” that tracks an internet user’s data.

“For some Safari or Internet Explorer browser users, the cookie may have operated even if the user configured privacy settings to prevent it from tracking data,” the court explained.

“The class plaintiffs claim Google invaded users’ privacy under the California constitution and the state tort of intrusion upon seclusion (meaning the intrusion into a private place, conversation, or matter in a highly offensive manner).”

The court said Google sought to resolve the class action case with a payment of just $5.5 million to select plaintiffs in lieu of payments to those who are members of the class.

The court affirmed the proposal gave absolutely nothing to “any class members.”

The organizations chosen to be beneficiaries are data privacy groups.

In return, Google would obtain permission to ban any class member from suing over privacy violations.

One man objected, arguing that that money should go to the class members.

“He asks us to vacate the settlement as unfair and require direct distributions to class members,” the court said.

The judges agreed he had valid concerns.

“The settlement agreement’s broad release of claims for money damages and its designation of cy pres recipients are particularly concerning,” the 3rd Circuit said. “We thus vacate the order approving the settlement and remand for further proceedings consistent with this opinion.”

The Electronic Privacy Information Center had urged the court to do just that.

The organization said: “The court was particularly ‘troubled’ by the prior relationships between Google, class counsel, and the organizations selected to receive funds in the settlement. The court found that ‘if challenged by an objector, a district court must review the selected cy pres recipients to determine whether they have a significant prior affiliation with any party, counsel, or the court.'”

EPIC said it had urged the court to reject the deal.

“Google is allowed to continue its unlawful conduct and the class members receive no monetary relief,” it argued.

EPIC said the selection of organizations awarded in the settlement “raise significant conflicts of interest concerns.”

The court’s opinion pointed out that the plaintiffs and Google had agreed on the recipients of the money. But one of the lawyers bringing the case was on the board of one of the recipients, and Google already was a “regular donor” to four others.

The lower court has been told to investigate and “consider whether these cy pres recipients have significant prior affiliations with Google, class counsel, or the court, and, if so, whether the selection process failed to satisfy [the law].”

“The vista view of this case is not pretty. According to the complaint, an internet behemoth with unprecedented tools for monitoring private conduct told millions of Americans it would not track their personal browser history, and then it did so anyway to profit from the data,” the court scolded.

“Through the proposed class-action settlement, the purported wrongdoer promises to pay a couple millions dollars to class counsel and make a cy pres contribution to organizations it was already donating to otherwise (at least one of which has an affiliation with class counsel).”

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