DoubleClick Inc. said Friday that it will pay $1.8 million to settle lawsuits claiming that the largest Internet advertising firm violated privacy laws by gathering marketing information about computer users.
Many of the suits were dismissed last year by a federal judge in New York, but plaintiffs were appealing the ruling of U.S. District Judge Naomi Buchwald. As part of the settlement, the plaintiffs will drop the appeal and their pending suits in state courts in Texas and California.
The suits claim DoubleClick's online profiling--the practice of gathering marketing information on consumers' Web-surfing habits--violates privacy laws. As such, the lawsuits were a threat to DoubleClick's basic business.
Besides the $1.8 million in legal fees that DoubleClick will pay to plaintiffs' lawyers, the company will formalize "privacy-protection" policies it adopted in recent years. "The company's view of the world changed a great deal after the lawsuits were filed," said plaintiffs' lawyer Seth Lesser.
DoubleClick said in a regulatory filing Friday that it's cooperating with several state attorneys general investigating its data collection and ad service practices.
New York-based DoubleClick sells data it collects about computer users to advertising firms so they can target online ads. The company's shares Thursday closed unchanged at $11.99 on Nasdaq. They are up 5.7% this year.
In July 2000, DoubleClick and other companies that amass data on Web surfers agreed to take steps to improve consumer-privacy safeguards. Among other policies, the companies agreed not to combine the names, addresses and other identifiable information about Web site visitors with anonymous marketing data without telling users.
As part of the settlement, DoubleClick said it routinely will purge information collected about computer users' Web-surfing habits.