Facebook to Pay $550M to Settle Class Action Case Over Facial Recognition

The settlement in a case over the social network’s Tag Suggestions feature is the latest financial blow the company has taken over its handling of user privacy.

Facebook has agreed to pay $550 million to Illinois users to settle a class action lawsuit filed over the use of its face-tagging technology to collect facial-recognition data on its social media platform.

The company unveiled the settlement on a quarterly financial call Wednesday, in which it attributed the settlement to the company’s general and administrative costs, which increased 87 percent from a year ago, according to a published report.

“We decided to pursue a settlement as it was in the best interest of our community and our shareholders to move past this matter,” according to a statement from Facebook.

The suit stems from a class-action proceeding from Facebook users in Illinois over a feature called Tag Suggestions, which identifies Facebook users in photos based on biometric identification technology and suggests that they be “tagged” in photos on someone else’s profile based on that info.

Users in Illinois claimed the feature violates a state biometric privacy law because it does not ask user permission to collect facial-recognition data, nor does it inform users how long the biometric data will be kept, according to the suit. The suit was certified as a class action in 2018 in the United States District Court for the Northern District of California.

Facebook tried to get the U.S. Circuit Court of Appeals in San Francisco to quash the suit; however, the court decided unanimously to allow the suit to proceed in an August decision. The company had vowed to appeal that decision before announcing this week’s settlement in the case.

The payout is not the first Facebook has made over its use of technology and consumer privacy issues, and it likely won’t be the last. The company already was fined $5 billion by the Federal Trade Commission for privacy violations stemming from the company’s role in the Cambridge Analytica scandal, the largest ever levied by the agency. Facebook also faced fines in Italy and the United Kingdom over data privacy.

Many believe the fines won’t do much to change the company’s technology agenda and how it uses data collected by its social-media network, as they are merely a drop in the bucket to a company that announced $21 billion in its latest quarterly earnings.

However, the class-action suit has already shown some impact on the Facebook’s privacy policies. The company made changes to its facial recognition feature in September in response to the proceeding, allowing users to opt out of the Tag Suggestions feature.

At the time Facebook said it was replacing its platform’s default Tag Suggestions setting–which automatically offered suggestions for users to be tagged in friends’ photos–with a new privacy button, called Face Recognition. The change allowed users to manually turn off the button they don’t want their biometrics to be used in suggested photo tags.

Indeed, biometrics and their use in both the public and private sector has been a highly controversial topic, with citizens and critics pushing back on the technology based on privacy issues after some high-profile leaks of biometric data.

The U.S. Customs and Border Protection faced criticism in June after the agency unveiled a data breach exposed photos of the faces and license plates for more than 100,000 travelers driving in and out of the country.

In August, it was biometric security company Suprema that came under fire after researchers discovered the personal and biometrics data of more than a million people left publicly exposed on a database owned by the company.

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