Internet giant, Google has agreed to pay an amount of $8.5 million to settle a class-action lawsuit filed over its social networking site ‘Google Buzz’ which made users' Gmail contacts public mostly without their knowledge.

The settlement was filed on Friday in federal court in San Jose, California and is subject to judge’s approval. The fee is to cover attorney fees and will be used for funding groups focused on Internet privacy.

The settlement could close a legal case against Google’s own social networking service. Google had addressed the issue of user’s Gmail contacts appearing public but some groups had filed a case against the company.

Google expressed in a statement that it was glad to move forward and "satisfied with the agreement". "We have always been committed to offering users transparency and choice in Buzz and all our products, and will continue to work together with users to provide the best user experience possible," it said.

Meanwhile, Google has also said that it will simplify its privacy setting and make them easier to understand for the users. The company will not change its material changes to its policy but will remove redundant sections and introduce new privacy tools page.