Facebook will pay the largest cash settlement ever for a privacy lawsuit after settling a facial recognition suit in Illinois over its photo-matching technology.
Facebook agreed Wednesday to pay $550 million to settle a class-action lawsuit in Illinois that accused the social media giant of violating a state biometric privacy law.
In 2008, Illinois passed the Biometric Information Privacy Act (BIPA), which outlawed the unlawful collection or storing of biometric information, including fingerprints and facial recognition. The law requires companies to get consent from users before collecting such information.
Facebook, through its Tag Suggestions feature, uses face-matching technology to suggest the names of people in users' photos. The settlement now requires Facebook to obtain consent from Illinois users before using the Tag Suggestions feature.
Facebook disclosed the settlement in its quarterly earnings report Wednesday, with CFO Dave Wehner noting on the earnings call that it caused Facebook's general and administrative costs to grow 87%.
While a certainly a hefty price (Equifax, for example paid just $380 million in the recent class-action lawsuit over its data breach), the amount is a drop in the bucket for Facebook. The company did $21 billion in revenue last quarter and $70 billion for the 2019 calendar year.
Facebook users between 2011 and 2015 could get as much as $200 as a result of the settlement.
“Biometrics is one of the two primary battlegrounds, along with geolocation, that will define our privacy rights for the next generation," Jay Edelson, a lawyer for Edelson PC, the firm that represented Facebook users in the case, said in a statement. "We are proud of the strong team we had in place that had the resolve to fight this critically important case over the last five years. We hope and expect that other companies will follow Facebook’s lead and pay significant attention to the importance of our biometric information.”
Illinois is one of three states that has biometric privacy laws, including Washington and Texas. However, Illinois' law is the only one that allows people to file a suit for monetary damages if their rights are violated. Illinois first filed its lawsuit against Facebook in 2015.
The case could also have ramifications for other high-tech companies that use facial recognition in Illinois. Startup Clearview AI, for example, is using facial recognition technology to match people's faces with photos of them already on the internet. The technology, according to the New York Times, could allow someone with augmented reality glasses to identify someone they see in the real world, in real time. Clearview sells its services to law enfacement agencies, and it's currently being used by the Chicago Police Department, according to the Chicago Sun-Times.
