Facebook has agreed to pay $550 million to settle a class-action lawsuit over its use of facial recognition technology in Illinois. According to the complaint, Facebook’s photo-labeling service called Tag Suggestions, violated the Illinois Biometric Information Privacy Act by harvesting biometric from the photos of millions of Illinois users without their permission and without telling them how long Facebook would store the data. The case proceeded to settlement after a federal appellate court rejected Facebook’s attempt to have the case dismissed and ruled that the case could go to trial. We previously wrote about that decision here.
Under the terms of the settlement, Facebook will pay $550 million to eligible Illinois users and cover the plaintiffs’ legal fees. The firms representing the plaintiffs called it the largest cash settlement ever to resolve a privacy related lawsuit. The settlement dwarfs the $380.5 million that Equifax recently agreed to pay to settle a class-action suit over its 2017 data breach.
Facebook disclosed the settlement as part of its quarterly financial results, in which it took a charge on the case. The sum, while appearing large at first blush, barely amounts to more than a rounding error for Facebook, which reported $21 billion in revenue in the fourth quarter of 2019 alone. This represents a 25% increase in revenue over the same quarter in 2018.
In an interview with The New York Times, Jay Edelson, a lawyer whose firm was one of the firms that represented the plaintiffs, said the settlement underscored the importance of strong privacy legislation.
Illinois is one of three states that have stand-alone biometric privacy laws. The Illinois law is considered to be the most comprehensive in the country and could act as a blueprint for other states considering passing a similar law in the absence of national privacy legislation akin to the European Union’s GDPR. Under Illinois law, a company must obtain written permission before collecting a person’s fingerprints, facial scans or other identifying biological characteristics. The law provides for statutory damages of up to $5,000 per violation, which could have added up to billions of dollars in damages had Facebook decided to go to trial.
Although the law was enacted in 2008, up until last year it was uncertain whether or not the law would have a deterrent effect on companies. Last January, the Illinois Supreme Court gave teeth to the law by ruling that violating a person’s biometric privacy could constitute a harm in and of itself, giving consumers standing to pursue claims for violations of the law. The Ninth Circuit relied on the Illinois Supreme Court’s holding when it rebuffed Facebook’s efforts to dismiss the case. Facebook filed a petition in December asking the United States Supreme Court to take up the case, which the Supreme Court denied last week. Although agreeing to settle the case, Facebook still denies that it engaged in any wrongdoing.
Our Chicago, Illinois business dispute and class-action law firm handles individual and class action gift card, data breach, privacy rights, deceptive advertising, predatory lending, unfair debt collection, lemon law, and other consumer fraud cases that government agencies and public interest law firms such as the Illinois Attorney General may not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totaling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. The Chicago class action lawyers at Lubin Austermuehle are proud of our achievements in assisting national and local consumer rights organizations to obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers’ rights are protected from consumer rip-offs and unscrupulous or dishonest practices.
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