A sign is posted outside of the Google headquarters January 2010 in Mountain View, California. Google has agreed to pay 8.5 million dollars (US) to settle a privacy lawsuit over a Buzz social networking tool added to free email service Gmail in February, according to court documents.

Google has agreed to pay 8.5 million dollars (US) to settle a privacy lawsuit over a Buzz social networking tool added to free email service Gmail in February, according to court documents.

Legal paperwork made available online Friday detailed the proposed settlement, which awaits approval by the federal court judge in San Francisco presiding over the case.

Lawyers that filed the class-action suit staked out 30 percent of the settlement money and the seven named plaintiffs were to get no more than 2,500 dollars each, according to court documents.

The rest of the money, which Google is to deposit in a fund, was earmarked for organizations devoted to Internet privacy policy or education.

The settlement also called on the California-based Internet giant to do more to educate people about privacy at Buzz.

Facing a slew of privacy complaints in the wake of the Buzz launch, Google has made changes to the new social networking tool.

"Google has made changes to the Google Buzz user interface that clarify Google Buzz's operation and users' options regarding Google Buzz," the settlement maintained.

Among the concerns aired in technology blogs and elsewhere was that Google Buzz was taking a user's Gmail contacts and automatically adding them to their public Buzz social network.

Gmail users now have to create a Google Buzz public profile and can view, edit or hide lists of people in their online circles.

Google also gave users the ability to block anyone following their account.

Buzz allows Gmail users to get updates about what friends are doing online and offers ways to share video, photos and other digitized snippets.

Buzz has been described by some technology analysts as a direct challenge by Google to social networking stars Facebook and Twitter.

The court filing came as Google updated its privacy policy.

"We're simplifying and updating Google's privacy policies," Google associate general counsel Mike Yang said Friday in a blog post.

"To be clear, we aren't changing any of our privacy practices; we want to make our policies more transparent and understandable."

On Thursday, a nonprofit consumer group that has been hounding Google about privacy released a satirical video cartoon featuring the Internet firm's chief giving away ice cream to snoop on children.

Google noted that information about its privacy tools can be found online at google.com/privacy.

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(c) 2010 AFP