After much controversy, a U.S. District Court judge has approved a settlement in the class action suit against Google over its Buzz social networking service.

Promoted as a competitor to Facebook when it launched in February 2010, Buzz faced immediate criticism after Google automatically added the service to all users of its e-mail system, Gmail. The program also turned Gmail users’ frequent e-mail contacts into followers, and made photos and information public by default.

Just weeks after its launch, consumers filed a class action on behalf of the roughly 31.2 million Gmail users alleging that Google violated the Electronic Communications Privacy Act, the Stored Communications Act, the Computer Fraud and Abuse Act, and publicly disclosed private facts.

After reaching a preliminary settlement, Google agreed to create an $8.5 million settlement fund to be paid to “existing organizations focused on Internet privacy policy or privacy education” after fees and costs. Class counsel reported that they received 77 applications from potential recipients seeking more than $35 million.

On May 31, U.S. District Court Judge James Ware granted final approval to the settlement fund to be split among the plaintiffs’ attorneys ($2.125 million) and 14 privacy-related advocacy groups, nonprofits, and education organizations.

Google also agreed to independent privacy audits for the next 20 years.

Under the settlement, Google will make payments to organizations like the Electronic Frontier Foundation ($1,000,000), as well as education programs like Harvard’s Berkman Center for Internet & Society and Berkeley’s Center for Law & Technology ($500,000 each).

After filing an objection to the settlement, the Electronic Privacy Information Center also received a piece of the settlement totaling $500,000. EPIC argued that it had tipped the Federal Trade Commission off to Google’s indiscretion when it filed a complaint with the agency, which in turn led to the class action lawsuit.

The court modified the list of recipients by adding EPIC as well as the Markkula Center for Applied Ethics at Santa Clara University ($500,000), a program dedicated to research and dialogue on issues of practical ethics.

To read the court’s order approving the settlement in In Re Google Buzz User Privacy Litigation, click here.

Why it matters: With settlement approval for its civil suit, Google can now move forward from its Buzz debacle, having settled similar charges with the FTC in April. Under the terms of that settlement, Google avoided monetary penalties, but agreed to implement a comprehensive privacy program and undergo regular audits for allegedly using deceptive tactics and violating its own privacy policy, according to the agency.