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Facebook Privacy Violation Lawsuit Reaches $650M Settlement

A class-action lawsuit against the company claimed that the social media giant violated privacy laws by storing biometric data, like facial scans, without getting user approval first.

the Facebook logo on a screen
Shutterstock/klevo
(TNS) — A federal judge in San Francisco approved a $650 million class-action settlement to be paid by Facebook, settling claims it violated privacy laws by storing biometric data, like facial scans, without getting users' sign-off first.

"By any measure, the $650 million settlement in this biometric privacy class action is a landmark result," District Judge James Donato wrote in approving the settlement. "It is one of the largest settlements ever for a privacy violation, and it will put at least $345 into the hands of every class member interested in being compensated."
 
"This settlement is a big win for consumer privacy, in line with global regulatory scrutiny over privacy-invasive practices and consumer sentiment in favor of privacy," Lourdes Turrecha, a professor who studies privacy technology and law at Santa Clara University School of Law, wrote in an email to The Chronicle.
 
Donato characterized the settlement as a win for consumers in the "hotly contested" area of digital privacy.
 
Facebook did not immediately respond to The Chronicle's request for comment. The case stems from a lawsuit filed in Illinois in 2015 that claimed the social media giant violated that state's law around collecting and storage of biometric data through the use of a software it uses to tag and identify people's faces in photos. Facebook previously appealed the case to the U.S. Circuit Court of Appeals and ultimately failed to have it heard by the Supreme Court.
 
The settlement also includes changes that Facebook must make to how it collects that kind of data. The company will automatically set it's facial recognition scans on people's profiles to "off" unless the users first decide to opt in. The company will also have to delete any stored face templates for the more than 1.5 million class members, who have so far claimed the payments as of December.
The company initially agreed to settle the claims for $550 million but another $100 million was added when Donato raised doubts that it was enough.
 
In 2019, the company was hit with a $5 billion penalty from the Federal Trade Commission over consumer privacy violations, the highest penalty paid over that kind of infraction at the time. That case accused the company of deceiving users into disclosing information through its privacy settings.
The company, with headquarters in Menlo Park, is currently embroiled in a public battle with another tech giant, Apple, over its advertising business. Facebook derives billions in revenue from targeted ads by tracking user behavior in its and other sites. Apple is planning to make that kind of data sharing optional on apps like Facebook in an upcoming software release which could threaten the social media company's revenue.
 
The company reported more than $28 billion in revenue during its most recent quarterly report, released last month.
 
©2021 the San Francisco Chronicle, Distributed by Tribune Content Agency, LLC.
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