Google will shell out $8.5 million to settle a class-action lawsuit with seven people who argued the Google Buzz social service violated users' privacy.
Google appeared to launch Buzz Feb. 9 with good intentions, allowing users to opt in to a service that lets users share and discuss links, photos and videos with their Gmail contacts.
However, the company quickly ran afoul of users who realized their e-mail contacts were being exposed to users of Buzz with whom they did not want to share their contacts.
The lack of explicit permissions irked people who felt Google was taking too much license with their data.
Google scrambled to close these privacy holes and add more user controls, but the damage had been done.
Seven individuals filed a class-action suit in San Francisco court, arguing that Google violated privacy law in with Buzz.
Google Buzz was the first of two major privacy snafus on Google's part this year. The search engine in May admitted its Street View cars has accidentally collected 600 gigabytes of user data from WiFi networks in countries all over the world.
Google is working with those companies to give back the data or destroy it. Privacy regulators in Germany and attorneys general in the U.S. are hounding the company hard over this. Consumer Watchdog made this video mocking the company over this.
The company Sept. 3 also took steps to streamline its privacy policies, which tend to be long winded for most Internet companies where users' digital data is at stake.