FILE- In this March 29, 2018, file photo, the logo for Facebook appears on screens at the Nasdaq MarketSite in New York’s Times Square. Newly released court documents reveal that Facebook allowed children playing digital games on its social network to ring up huge bills on their parents’ credit cards while rejecting recommendations on how it could address a problem that the company dubbed “friendly fraud.” The internal Facebook memos and other records were unsealed late Thursday, Jan. 24, 2019, to comply with a judge’s order issued in a federal court case settled in 2016. The lawsuit centered on allegations that Facebook knowingly gouged teenage children by permitting them to spend hundreds of dollars buying additional features on games such as “Angry Birds” and “Barn Buddy.” (AP Photo/Richard Drew, File)
Facebook will pay over half a billion dollars to settle a class-action lawsuit that alleged systematic violation of an Illinois consumer privacy law. The settlement amount is large indeed, but a small fraction of the $35 billion maximum the company could have faced.
Class members — basically Illinois Facebook users from mid-2011 to mid-2015 — may expect as much as $200 each, but that depends on several factors. If you’re one of them you should receive some notification once the settlement is approved by the court and the formalities are worked out.
The proposed settlement would require Facebook to obtain consent in the future from Illinois users for such purposes as face analysis for automatic tagging.
This is the second major settlement from Facebook in six months; a seemingly enormous $5 billion settlement of FTC violations was announced over the summer, but it’s actually a bit of a joke.
9 reasons the Facebook FTC settlement is a joke
The Illinois suit was filed in 2015, alleging that Facebook collected facial recognition data on images of users in the state without disclosure, in contravention of the state’s 2008 Biometric Information Privacy Act (BIPA). Similar suits were filed against Shutterfly, Snapchat, and Google.
Facebook pushed back in 2016, saying that facial recognition processing didn’t count as biometric data, and that anyway Illinois law didn’t apply to it, a California company. The judge rejected these arguments with flair, saying the definition of biometric was “cramped” and the assertion of Facebook’s immunity would be “a complete negation” of Illinois law in this context.
Facebook stalls in lawsuit alleging its facial recognition tech violates Illinois law
Facebook was also suspected at the time of heavy lobbying efforts towards defanging BIPA. One state senator proposed an amendment after the lawsuit was filed that would exclude digital images from BIPA coverage, which would, of course, have completely destroyed the case. It’s hard to imagine such a ridiculous proposal was the suggestion of anyone but the industry, which tends to regard the strong protections of the law in Illinois as quite superfluous.
As I noted in 2018, the Illinois Chamber of Commerce proposed the amendment, and a tech council there was chaired by Facebook’s own Manager of State Policy at the time. Facebook told me then that it had not taken any position on the amendment or spoken to any legislators about it.
2019 took the case to the 9th U.S. Circuit Court of Appeals, where Facebook was again rebuffed; the court concluded that “the development of face template using facial-recognition technology without consent (as alleged here) invades an individual’s private affairs and concrete interests. Similar conduct is actionable at common law.”
Facebook’s request for a rehearing en banc, which is to say with the full complement of judges there present, was unanimously denied two months later.
At last, after some 5 years of this, Facebook decided to settle, a representative told TechCrunch, “as it was in the best interest of our community and our shareholders to move past this matter.” Obviously it admits to no wrongdoing.
The $550 million amount negotiated is “the largest all-cash privacy class action settlement to date,” according to law firm Edelson PC, one of three that represented the plaintiffs in the suit.
“Biometrics is one of the two primary battlegrounds, along with geolocation, that will define our privacy rights for the next generation,” said Edelson PC founder and CEO Jay Edelson in a press release. “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.”
