Facebook agrees to pay $550 million to Illinois users

Facebook will pay $550 million to Illinois users to settle allegations that its facial tagging feature violated their privacy rights.

The settlement — which could amount to a couple of hundred dollars for each user who is part of the class-action settlement — stems from a federal lawsuit filed in Illinois nearly five years ago that alleges the social media giant violated a state law protecting residents’ biometric information. Biometric information can include data from facial, fingerprint and iris scans.

Illinois has one of the strictest biometric privacy laws in the nation. The 2008 law mandates that companies collecting such information obtain prior consent from consumers, detail how they’ll use it and specify how long the information will be kept. The law also allows private citizens, rather than just governmental entities, to file lawsuits over the issue.

No details have been released regarding who is eligible to claim a portion of the settlement, how much they will receive, or how they will be notified. A federal court judge in San Francisco, where the lawsuit was moved, must approve the settlement.

“We are expecting a record number of claims to be filed,” said attorney Jay Edelson, whose firm represents some of the consumers. “But even with that, we think that the class members are going to get a good amount of money.”

The final payout will depend on how many people file claims. An estimated 5 million to 6 million Illinois Facebook users could be included in the class, said Paul Geller, another of the attorneys representing consumers.

In 2018, a judge defined the class as Facebook users in Illinois from whom the Menlo Park, California-based company created a stored face template after June 7, 2011, the date Facebook said its tag suggestion feature was available in most countries.

The feature uses facial recognition software to match users’ new photos with other photos they’re tagged in. It groups similar photos together and suggests the names of friends in the photos.

Geller said Facebook has altered its platform for Illinois users. The company did not immediately respond to a request for details about what changes it made.

Facebook had argued that its collection of biometric information did not harm individuals, and that they do not have grounds to sue under Illinois’ biometrics law.

“We decided to pursue a settlement as it was in the best interest of our community and our shareholders to move past this matter,” Facebook spokesman Dina El-Kassaby said in a statement.

Facebook executives disclosed the settlement Wednesday during a call with analysts to discuss the company’s quarterly earnings, which rose 7%, to $7.3 billion.

The settlement is a win for privacy advocates who say that protecting biometric information is critical because, unlike a credit card number, it can’t be changed if it’s stolen.

“This pretty firmly establishes the fact that those harms are real and consumers deserve restitution when their rights have been violated,” said Abe Scarr, director of the Illinois Public Interest Research Group, a consumer advocacy organization.

With Illinois’ strict biometric privacy law, the state has become a hotbed for lawsuits surrounding the use of increasingly popular technologies, like facial recognition and fingerprint scans. Facebook hasn’t been the only tech giant involved in such suits.

Google, Snapchat and photo-sharing site Shutterfly also have faced allegations involving biometrics, as have companies outside the tech industry, including hotel chains and grocery stores.

Many have chosen to settle biometric privacy lawsuits filed against them, according to information from law firm Holland and Knight. Settlement amounts have ranged from $80 per class member in a roughly 4,000-person class to $1,300 in a 300-person class.

The Facebook settlement is historic, said Matthew Kugler, an associate professor at Northwestern University’s Pritzker School of Law.

Not only is the promised $550 million payout notable, but Facebook is a company everyone pays attention to, he said. That includes smaller companies dealing with biometric information that have less resources for a lengthy court battle.

“Every company is watching this. Facebook is always the canary in the coal mine when it comes to privacy, because their business so runs on consumer information,” he said. “(And) because they are one of the biggest, they will always be one of the first hit.”

Edelson said that biometrics, which are increasingly used, need to be utilized responsibly.

“In our view Silicon Valley is really sprinting to create a world where we are tracked everywhere we go, and that’s a different world,” Edelson said. “That’s scary to us.”

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