Facebook Agrees to Pay Out $550 Million in Settlement of Facial Recognition Lawsuit

Thanks to an Illinois privacy law, eligible users will soon be able to apply for payments from Facebook for using facial scans without permission.

• By Haley Samsel
• Jan 31, 2020

To settle a class-action lawsuit in Illinois, Facebook announced on Wednesday that it will pay $550 million over its use of facial recognition technology to suggest names of people in users’ photos.

The suit claimed that Facebook had violated an Illinois biometric privacy law when it used facial data for Tag Suggestions, a function that recognized people from across the site in people’s shared photos. The data was taken without permission and without telling residents how long the data would be maintained, according to the lawsuit.

The agreement will be paid out to eligible Illinois users and the plaintiffs for their legal fees. Facebook disclosed the settlement as part of its release of quarterly financial results. When compared with the amount of revenue that Facebook generated in the fourth quarter -- about $21 billion in the last quarter of 2019 -- the payout amounts to a “rounding error for Facebook,” according to The New York Times.

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

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Privacy advocates called the settlement a victory in terms of holding Facebook accountable for the way it handles user data. The company has come under fire since the 2016 presidential election for allowing apps and third-party firms, including the infamous Cambridge Analytica, to mine data and use it to tailor political ads and more toward users.

The case showed the potential power of state laws to police the ways companies can collect and maintain data about their users. Three states have biometric privacy laws, and under the Illinois law, companies have to obtain permission before collecting someone’s fingerprints, facial data or other biological data. Residents can sue companies for up to $5,000 per violation under the law.

“The Illinois law has real teeth. It pretty much stopped Facebook in its tracks,” Marc Rotenberg, the executive director of the Electronic Privacy Information Center, told the Times. “Tech firms and other companies that collect biometric data must be very nervous right now.”

Facebook has discontinued using facial recognition in Europe when regulators questioned the company’s consent system. More recently, in 2018, the use of facial scans was reintroduced as an option for European users. Facebook also updated its facial recognition settings for some users last year and included more information about how that data is collected and used on the platform, according to the Times.