Flash Cookie Class Action Lawsuit Settles

In a series of class action lawsuits filed in California this year, the popular third party advertising service providers Quantcast Corp. and Clearspring Technologies Inc. were accused of violating various privacy laws.  In particular, the complaints filed against the companies alleged that they used Flash cookies, which would regenerate even if a user deleted all cookies, and that the regeneration was without the user's knowledge.  While admitting no liability, the companies promised that they had stopped using cookie technology and would not use it in the future.  The companies also agreed to set up a $2.4 million settlement fund, and to work with the Network Advertising Initiative to include a prohibition in the NIA Guidelines against use of Flash cookies.

TIP: Companies should assess whether they – or their third party service providers – use Flash cookies, and if so, consider ceasing use of such cookies.  While the settlement terms are not binding on others, this lawsuit suggests that we may start to see an industry shift away from the use of Flash cookies.