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Arbitration Ordered in ‘Zombie Cookies’ Case

OAKLAND, Calif. (CN) - An online ad company accused of using "zombie cookies" to collect data on smartphone users can settle a class action through arbitration, a federal judge ruled Monday.

A class of Verizon subscribers from New York state sued Turn Inc. in April 2015, claiming the company turned their smartphones into "tracking beacons" to monitor online behavior.

Advertisers use bits of data called cookies to gather web information that can be used for personal targeted-advertising campaigns.

Lead plaintiff Anthony Henson says Turn's "zombie cookies" evaded detection and could not be deleted. When a person deleted Turn's cookie, the company had a process to "respawn" the tracking data, he claims in his lawsuit.

Turn said it would stop using the "zombie cookies" after a ProPublica report in January 2015.

On Monday, U.S. District Judge Jeffery White found the claims against Turn were "inextricably intertwined" with Verizon subscriber agreements that include an arbitration clause.

The plaintiffs argued the judge should deny Turn's motion to compel arbitration because Turn was not a party to that agreement.

But White found arbitration must be compelled when claims "arise directly" from a provision of a contract that requires arbitration to settle disputes.

Turn says the subscriber agreements disclosed Verizon's policy of partnering with companies that provide tailored advertising programs.

"Turn's defense requires an analysis of the contract between Verizon and its subscribers," White stated in his 8-page ruling.

The judge granted Turn's motion to stay the class action pending arbitration and ordered both parties to submit status reports on the arbitration proceedings every 120 days.

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