What do you do when a global corporation pays out millions to the watchdogs that we expect to protect us against it? It’s a fair question to ask in light of the Chocolate Factory’s legal settlement this week, over Google Buzz. The privacy class action suit has landed a windfall of millions of dollars to “privacy” groups – but not a cent to ordinary citizens, users of Google Gmail’s service whose privacy was compromised.

The Washington Legal Foundation’s chairman Dan Popeo, a pro-business organisation, is one critic who has raised an eyebrow.

Google offered $8.5m to settle several class action suits last September. The Court made a preliminary settlement late last year and decided on the dispersal of money in February. The lawyers took a cut of just over $2m, leaving $6m to be spread around some 77 organisations. Only 12 made the cut.

Amongst the groups that failed to squeeze its snouts into the trough was EPIC, which complained that the selection process favored “organizations that are currently paid by [Defendant] to lobby for or to consult for the company”.

To say the least, that’s an interesting description of the ACLU and the Electronic Frontier Foundation, which both hit the jackpot, receiving $1m each.

Judge James Ware approved the payouts,and then he included EPIC and one other recipient too.

“Why were these lucky 14 settlement fund recipients chosen and not others?,” asks Popeo. “What criteria were used to choose them? How will the $6.1 million provide an ‘indirect benefit’ (as the judge put it) to the faceless, nameless plaintiffs in the suit?”

Popeo also notices another curiosity. In addition to EPIC’s ticket on the gravy train, Judge Ware managed to find $500,000 for the Markkula Center for Applied Ethics at Santa Clara University. Why that particular faculty? It’s anyone’s guess, but quite coincidentally, the Honorable Judge Ware is a lecturer at Santa Clara University.

It’s a strange arrangement that sees purportedly independent “citizens groups” come to become recipients of cash from the companies they claim to fight, on citizens’ behalf. A cynic would suggest that they might forget to bite the hand that feeds them.

And $1m is not a trivial amount to the EFF: in 2008/09 the organisation saw gross income of $3.42m, and was left with a shortfall of over $400,000. Google’s cash from this one settlement alone exceeds both individual membership fees, and individual contributions – both under $1m. You could almost describe relying on Google is a kind of business model.

(Former EFF board chairman Brad Templeton is an old pal of fellow Burner Larry Page, as he explained in an unusually generous critique of GMail.]

It’s all quite cosy. Perhaps the groups could nominate Google for one of their many awards: we suggest “Most Munificent Litigant”.

Bootnote

Europeans shouldn’t be so smug. The superstate hands out millions of Euros to environmental groups to lobby the EU. Greenpeace, to its credit, refuses to accept the cash.