$135M settlement over Google data transfers nears final approval

SAN JOSE, Calif. (CN) — A federal judge deliberated final approval of a $135 million settlement Tuesday for a class of Android users that sued Google over claims the tech giant surreptitiously performed passive data transfers over its Android operating system.

U.S. Magistrate Judge Virginia DeMarchi questioned attorney fees, class definition and details of injunctive relief for Android phone users in the final approval hearing.

On March 5, DeMarchi granted preliminary approval to the class of Android users claiming Google — without informing or getting users’ consent — transmitted large amounts of information between Android devices and its own servers. The transfers reportedly occurred when the devices were idle, untouched and with all apps closed. They also used people’s cellular data and didn’t compensate users for the data consumed.

In DeMarchi’s preliminary approval, the class is defined as people in the United States who used the Android operating system to access the internet from Nov. 12, 2017, to the date a final order is signed. Class members of a similar, California state suit are excluded from the federal class.

However, on Tuesday, DeMarchi brought up a possible oversight of potential class members. Californians who opted out of membership in the state action would technically qualify under the national class, but the current class definition excludes California residents.

Class attorney Glen Summers said the possible gap could be fewer than 26 people — those Californians who opted out of the state case but choose to be a member in the national class — and it was likely that they would also opt out again.

DeMarchi wasn’t convinced that it didn’t need to be addressed.

“We need to deal with it, even if it is a really small discrepancy,” she said. “It’s bothering me.”

Since preliminary approval, Summers said, notice by email was sent to over 130 million email addresses associated with active Android accounts during the class period. Only 51 objections to the settlement were filed, he said, an extremely low percentage of the overall potential class.

Settlement funds will go into an interest-bearing trust once final approval is granted. Class attorneys requested almost $40 million from the fund in fees, with another $700,000 in costs and expenses, and administrative fees estimated around $12.6 million.

The amount of the settlement for each class member depends on the number of those included in the class, but class attorneys believe it will be a nominal amount around $1. The named plaintiffs could receive up to $10,000.

DeMarchi questioned Summers about which law should be applied to calculating attorney fees, which ends up around 29.5% of the total of the settlement. Ninth Circuit precedents find 25% a reasonable benchmark for attorney fees for similar kinds of class actions, but fees from successful class actions in California can garner up to one-third of overall funds.

Summers and class attorney Karma Giulianelli said they put in 15,000 hours on a contingency case that may not have worked out and believe the upward adjustment from the Ninth Circuit standard was warranted.

And the interest on top of the fees, Summers said, is a tactic to stop some bad-acting objectors who would like to keep the settlement tied up in court, saying they are trying the “subvert the process.”

“This cottage industry, its bad,” he said.

In addition to the payment, Google must make certain disclosures to Android users.

The injunctive relief would entail scenarios such as when someone sets up a new Android phone, Google must disclose the conduct that spawned the legal action.

Additionally, Google Play’s terms of service must include the information that its system services often require internet connectivity, which could use their cellular data. Also, Google would need to disclose network communications could occur when someone isn’t directly using their device.

A help page available to users must also state that the information exchange would tap into someone’s mobile data, if a Wi-Fi network wasn’t available.

Google attorney Whitty Somvichian said the company was already “in the process” of implementing the disclosures and noted that both parties agreed it was the best possible injunctive relief given the amount of injury the class incurred.

“The magnitude of cellular data usage here was minuscule,” he said. “It is more than adequate and reasonable.”

DeMarchi listened to a few objectors’ arguments via Zoom, both of whom believed Google was transferring personal, private data to sell.

DeMarchi made clear that those assertions were not a part of the class action, as the cellular data transfers instigated by Google didn’t contain data that was “medical, personal or anything like that.”

The class action reached the Ninth Circuit before returning to the lower court and attaining preliminary approval.

Class members filed the action in 2020, making claims of conversion and quantum meruit — the latter being a legal path to gain restitution for improper enrichment.

A judge granted Google’s motion to dismiss, giving no leave to amend. The Ninth Circuit affirmed dismissal of the quantum meruit claim, but remanded the conversion issue to the lower court.

The other California state suit led class members to request a stay of the federal case, pending the state suit’s resolution. A judge in November denied the stay and two days later the parties announced they’d reached a settlement.