The 2008 ‘Beacon’ class action lawsuit against Facebook that claimed violation of consumer privacy has now been settled by a federal judge. The Beacon program, which Facebook terminated in late 2009, publish information about consumer purchases — such as movie rentals, which is contrary to law — to the Facebook Wall of the purchaser and to their friends’ feeds. In one instance, a to-be-surprise gift of jewelry was broadcast to one user’s Facebook network, obviously ruining the surprise for his wife.

There were claims that the US$9.5M settlement was overly generous, especially since supposedly most of the intended claimants of the suit would receive little or no compensation. The settlement has now been approved by the judge residing over the objection launched by consumer rights group Public Citizen.  One of the points of objection was not that the $6.5M of the settlement would be given to a new digital privacy group, but that Facebook would have a hand in its inception, including assigning one of the three board members.

Part of the settlement amount is based on the Video Privacy Protection Act‘s fine of at least $2500 per infraction. Approximately $3M will go to the lawyers handling the case. The rest will go to the group, whose main purpose is give out monies to organizations studying online privacy. The group’s board has already been selected and include Chris Jay Hoofnagle, Tim Sparapani (Facebook), and writer Larry Magid. Sparapani is a former ACLU attorney.