Facebook agrees to pay $ 650 million to end facial recognition lawsuit

Facebook agreed to pay $ 650 million to settle a year-long class action lawsuit for the use of facial recognition in what remains a less than excellent summer for the social media company.

The lawsuit refers to Facebook’s photo tagging feature, which used facial recognition software to identify faces in users’ photos. However, the state of Illinois has a law against companies that collect biometric data, including facial recognition, without first obtaining consent. Illinois argued that Facebook did not obtain that consent before enabling the new feature by default for its millions of Illinois users, and sued the company in 2015.

Facebook has denied that it did anything wrong, but tried to reach a $ 550 million settlement in January. That offer was rejected by a judge for not being enough; As NPR reported, the $ 550 million figure would result in payments of just $ 150 to $ 300 per person. Facebook could have been in trouble for $ 47 billion if it lost its lawsuit and affected users got the full payment of $ 5,000 per person allowed by law.

“It’s $ 550 million,” the judge said at a June 4 hearing, according to court documents obtained by Recode. “That’s a lot. But the question is, is it really a lot?

He continued: “That is a significant reduction from the $ 1,000 that the Illinois legislature established as a basis. … The Illinois legislature established this expectation of privacy and privacy as serious, and they put a high price on it for that reason. “

Therefore, Facebook has now added an additional $ 100 million to its proposal. According to court documents, that will give each affected user $ 200 to $ 400 each. The settlement was agreed by both sides of the lawsuit, but has not yet been approved by a judge.

As it did in January, Facebook told Recode: “We are focused on resolving ourselves, as it is in the best interest of our community and our shareholders to overcome this issue.”

The new deal comes when facial recognition software is more controversial than ever. IBM, Microsoft and Amazon are pausing or limiting law enforcement access to their technology in response to protests against the police, and the New York Times recently reported on the first known false arrest based on facial recognition. At the same time, private companies are increasingly turning to facial recognition software, using it in photo tagging services (like the aforementioned Facebook) or identity verification to unlock devices (like Apple’s iPhone). Bicameral legislation by Democrats has also been proposed that would ban the use of facial recognition technology by federal law enforcement and withhold federal funds from state and local agencies that do not enact similar bans.

It also occurs when Facebook wears through a summer that probably didn’t go as well as I had hoped. The company faces a congressional antitrust investigation (along with Amazon, Apple, and Google), and CEO Mark Zuckerberg will testify before the House Judicial Antitrust Subcommittee on July 27.

In June, Facebook’s own employees protested the company’s decision not to take action on President Trump’s posts that threatened to respond to the protests with gunshots, saying “when the looting begins, the shooting begins.” That incident prompted civil rights groups to call for an advertising boycott of many major companies for their perceived inability (or lack of desire) to stop hateful content proliferating on their platform. And, a few weeks ago, Facebook released the results of a civil rights audit, which largely failed.

Facebook has tried with varying success to respond to these controversies. The company cracked down on some Trump content, for example, by removing campaign ads featuring potential Nazi images. Facebook also recently announced that it would study racial biases on Facebook and Instagram algorithms. And, in late June, Zuckerberg announced that the company would do more to remove or tag posts that incite violence, contain hate speech, or suppress voting. But many still feel that these measures are too small and too late.

A possible bright spot in all of this for Facebook, actually, is that $ 650 million deal. While it’s obviously a lot of money, it’s far less than the $ 47 billion you could have lost if the case went to trial, and if the judge accepts it this time, it means the end of an expensive lawsuit. Facebook’s most recent quarterly earnings report showed revenue of nearly $ 18 billion, almost all from advertising. A loss of $ 650 million will barely register.

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