Federal appeal court strikes down Google’s class-action “cookies” lawsuit settlement

A federal appeals court on Tuesday struck down Google’s class-action settlement meant to resolve claims it invaded the privacy of millions of computer users by installing “cookies” in their browsers, but paying those users nothing for their troubles.

In a 3-0 decision, the 3rd U.S. Circuit Court of Appeals in Philadelphia said it could not tell whether the $5.5 million settlement was fair, reasonable and adequate, and said a lower court judge should revisit the case.

Google, a unit of Alphabet Inc, had been accused of exploiting loopholes in Apple Inc’s Safari and Microsoft Corp’s Internet Explorer browsers to help advertisers bypass cookie blockers.

The settlement approved in February 2017 by U.S. District Judge Sue Robinson in Delaware called for Google to stop using cookies for Safari browsers, and pay the $5.5 million mainly to the plaintiffs’ lawyers and six groups, including some with prior Google ties, to research and promote browser privacy.

But in Tuesday’s decision, Circuit Judge Thomas Ambro said the settlement raised a “red flag” and possible due process concerns because it broadly released money damages claims.

He also called the awards to the privacy groups “particularly concerning.” The case was returned to the Delaware court.