• by Wendy Davis  @wendyndavis, November 23, 2011

Web video company Metacafe has settled a class-action privacy lawsuit by agreeing that it won't use Flash cookies to recreate users' deleted HTTP cookies. The company also promised to stop transmitting data about users' video-viewing history to Scorecard Research.

Also, Metacafe said it would reimburse users up to $250 for any expenses incurred in removing the cookies -- although few users are likely to be in a position to claim any money. The lawyers who brought the case will receive up to $400,000 in attorneys' fees. U.S. District Court Judge Roslynn Mauskopf in federal court in the Eastern District of New York still must decide whether to accept the settlement.

Flash cookies were originally designed to remember users' preferences for online video players and other applications, but some companies use such cookies to store the same type of information that is normally found on HTTP cookies.

Flash cookies are stored in a different place in people's browsers than HTTP cookies, and until recently, were more difficult to delete. 

At least four other companies have resolved civil lawsuits stemming from their alleged use of Flash cookies. Quantcast, Clearspring and Say Media's VideoEgg agreed to pay a total of $3.4 million to settle class-action lawsuits; Specific Media also settled a civil lawsuit for an undisclosed sum.

Video ad network ScanScout, owned by Tremor Media, also recently agreed to settle a Federal Trade Commission complaint by promising to refrain from using Flash cookies for tracking.

The lawsuit against Metacafe was filed by Brooklyn resident Joseph Garvey -- who also is suing analytics company Kissmetrics for allegedly violating his privacy. He is represented by New York attorney Scott Kamber, who has brought privacy cases against Web companies like Facebook, Google and Apple.

The proposed Metacafe settlement was filed with the court last Friday, just two days after Garvey filed suit.

Kamber says that he entered into settlement talks with Metacafe shortly after sending the company a letter complaining about potential privacy violations, but before officially suing.

The letter accused Metacafe of using Flash cookies for tracking, and of sending information about users' video viewing to the company Scorecard Research. “Our clients demand that Metacafe cease and desist its injurious practices forthwith,” reads the Aug. 23 letter. “In addition, our clients demand compensatory relief for their injuries and on behalf of the class.”

Although Metacafe is settling the case, the company denies that it used Flash cookies for tracking, according to the court papers.

Kamber says the settlement is “consistent with our resolutions in the other Flash cookie cases that we've resolved.” He adds that the ban on using Flash for tracking “provides a real benefit to the class.”

Court papers filed by Kamber say that Metacafe has demonstrated that “it does not have the financial wherewithal to withstand a judgment, to fund a settlement having a financial cost greater than that provided for in the settlement agreement, or to litigate this case through trial.”

If approved, the settlement also would cover a separate lawsuit against Metacafe pending in Arkansas state court. That case was brought by other attorneys, and it is not yet known whether they intend to object to the settlement negotiated by Kamber.