Facebook Nears $650 Million Settlement Over Biometric Privacy

The judge overseeing a privacy lawsuit against Facebook over “faceprints” signaled Thursday he's inclined to approve a settlement requiring the company to pay a record-breaking $650 million.

Facebook previously agreed to shell out $550 million to resolve claims that it violated an Illinois privacy law by compiling a database of people's facial templates. That amount would have allowed Illinois residents whose facial templates were stored by Facebook to receive between $150 and $300 each.

But the deal hit a roadblock last month, when U.S. District Court Judge James Donato in the Northern District of California refused to grant it preliminary approval. He suggested the settlement figure was too low, given that the Illinois law at the center of the case called for damages of up to $5,000 per violation.

“The Illinois Legislature said this is meant to be an expensive violation,” Donato reportedly said.

Facebook then upped the settlement figure by $100 million -- an amount that appeared to meet with Donato's approval.

“Pending further review, it looks like most of my concerns were addressed,” he said at a hearing conducted via Zoom Thursday afternoon.

If approved, the settlement will resolve a 2015 lawsuit alleging Facebook's photo-tagging function violated an Illinois biometric privacy law that prohibits companies from collecting or storing people's biometric data without their consent.

Facebook's photo-tagging, rolled out in 2011, allegedly draws on the social networking platform's vast trove of photos to recognize users' faces, and suggest their names when they appear in photos uploaded by their friends.

Facebook initially fought the lawsuit, arguing the case should be dismissed on the grounds that Illinois users weren't injured by any alleged violations of the state law. Donato rejected Facebook's argument and ruled that the case could proceed as a class-action on behalf of Illinois users who have had their faceprints stored by the company since 2011.

Last year, the 9th Circuit Court of Appeals upheld Donato's decision. Those judges suggested in a written opinion that creating faceprints could have vast and far-reaching privacy implications.

"Taking into account the future development of such technology ... it seems likely that a face-mapped individual could be identified from a surveillance photo taken on the streets or in an office building,” the appellate judges wrote. “Or a biometric face template could be used to unlock the face recognition lock on that individual’s cell phone.”

Facebook attempted to appeal to the Supreme Court, but was turned away in January. The company then announced it had reached a settlement.

In addition to the monetary payouts, Facebook agreed to turn its face recognition settings to “off” for Illinois residents, and to delete existing faceprints, unless people affirmatively opt in to the feature.

Facebook separately said it would delete all existing facial templates for U.S. users, unless they affirmatively agree to allow their faceprints to remain in Facebook's database, as part of the company's $5 billion privacy settlement with the Federal Trade Commission.

At Thursday's hearing, Donato questioned lawyers over how they planned to tell Illinois residents about the settlement.

“You all are fond of telling me this is a record-breaking settlement,” the judge said. “I want to see a record-breaking claims rate as well.”

Facebook plans to notify eligible Illinois users through their news feeds, and also via “jewel” notifications -- meaning an icon in the notification bar at the top of Facebook's screen.

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