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In what the plaintiffs’ lawyers are calling the largest cash settlement ever resolving a privacy related lawsuit, Facebook has agreed to establish a fund of $550 million to pay Facebook users in Illinois claiming the social media giant’s facial recognition feature violated their privacy under Illinois law.
The plaintiffs alleged that Facebook collected biometric information in the form of face prints, for the purpose of supporting its “face tagging” feature, without their permission in violation of the Illinois Biometric Information Privacy Act.
Facebook has denied any wrongdoing and argued that users could opt out of the feature. However, during a quarterly earnings call yesterday, Facebook Chief Financial Officer David Wehner confirmed the settlement and cited the settlement one driver behind the firm’s higher legal expenses.
The settlement must still be approved by the U.S. District Court in San Francisco presiding over the case.
While Texas and Connecticut also have laws regulating biometrics, Illinois has a one-of-a-kind biometric privacy statute under which consumers may sue for monetary damages. The law allows for $1,000 in damages for each negligent violation and $5,000 for each intentional or reckless violation.
Google is facing similar suits under the Illinois law.
Last July, Facebook paid a record-breaking $5 billion fine levied by the Federal Trade Commission to end a probe into its privacy practices. The company promised to revamp its approach to privacy. “We currently have more than 1,000 engineers working on privacy-related projects and helping to build out this program,” Facebook CEO Mark Zuckerberg told analysts yesterday.
Facebook reached the settlement with three law firms representing the plaintiffs: Chicago-based Edelson, the first to allege potential violations of the Illinois Biometrics law by Facebook and other companies, along with Labaton Sucharow and Robbins Geller Rudman & Dowd. The cases were consolidated and transferred to the U.S. District Court in San Francisco. The three firms have been jointly litigating the case for nearly five years.
In August, in a 3-0 decision, the Ninth U.S. Circuit Court of Appeals in San Francisco rejected Facebook’s effort to undo the class action suit. The case was then returned to U.S. District Judge James Donato in San Francisco for a trial.
Attorney Jay Edelson said battles over biometrics along with geolocation will define privacy rights for the next generation. “We hope and expect that other companies will follow Facebook’s lead and pay significant attention to the importance of our biometric information,” he said.
“This is a tremendous victory for the class,” said Michael Canty, with the law firm Labaton Sucharow. “Here, Illinois enacted a statute not to thwart innovation, but to protect individuals’ privacy. As technology advances, corporations must be mindful of the privacy of their customers and more importantly, comply with the law.”
“This case should serve as a clarion call to companies that consumers care deeply about their privacy rights and, if pushed, will fight for those rights all the way to the Supreme Court and back until they are justly compensated,” added Paul Geller of Robbins Geller law firm.
The case is In re Facebook Biometric Information Privacy Litigation, 15-cv-03747, U.S. District Court, Northern District of California (San Francisco).