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Nosy Software Maker|Must Pay $9 Million

SAN FRANCISCO (CN) - A federal judge preliminarily approved telecom Carrier IQ's $9 million agreement to settle claims that it collects personal information and sends it to Sprint, AT&T and other companies.

Carrier IQ and several telecoms were hit in 2011 with a raft of consumer privacy class actions alleging Carrier used a device called IQRD to access smartphones while hiding its presence and subverting standard operating system functions or other applications.

Plaintiffs said the software allowed Carrier IQ to log users' keystrokes, including their private text messages and web searches, in violation of federal and state wiretap laws.

Carrier IQ and the telecoms - including Sprint, AT&T and others - failed to persuade U.S. District Judge Edward Chen to force arbitration based on users' agreements with their wireless providers.

In November 2014, Carrier IQ told Chen that it had "reached an agreement in principle that will resolve plaintiffs' claims against Carrier IQ on a class-wide basis."

On Tuesday, Chen said agreement appeared to be fair, despite his initial reservations about the relatively small settlement fund, which he said was "pennies on the dollar compared to maximum verdict value."

According a January filing from the plaintiffs, if enough members of the proposed class of 79 million consumers make claims to drive the average allotment to less than $4 a person, the whole $9 million pot will be split among the Electronic Frontier Foundation, the Center for Democracy and Technology, and CyLab Usable Privacy and Security Laboratory at Carnegie Mellon University.

"The settlement is a substantial discount, but there are many good, compelling reasons you've set forth to my satisfaction," Chen said.

He set a final approval hearing for July 28.

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