Facebook Losses Escalate as Judge Orders Additional Funding for Claimants
Facebook has agreed to a larger settlement for the landmark Facial Recognition lawsuit. So far, Facebook has decided to pay an additional $100 million to settle claims. This is an addition to the $550 million already authorized as a payout. A federal judge considered the previous settlement as inadequate since it did not properly punish Facebook for its misdeeds.
Claimants can expect to receive a payout between $200 and $400. Any Facebook user in Illinois whose picture appeared on Facebook between 2011 and 2015 are included in the lawsuit.
Class members will receive settlement optional notifications in the mail within the next few weeks. For specific questions, claimants can call (312) 874-7180.
The Facebook lawsuit is unique in that it as one of the most massive payouts in history for privacy violations. You could compare this case to the mishaps of Equifax.
A hacker exposed the security weaknesses in the Equifax system and used the data to open fraudulent credit card accounts and make fraudulent unemployment claims. The code breakers have made off with millions of dollars in rich consumer data and executive compensation.
In contrast, Equifax consumers received less in financial compensation compared to the privacy violations of the Facebook lawsuit. Equifax customers have received almost nothing for the hassle of undoing the damage caused by the Equifax security breach. Equifax only had to pay out $380.5 million for a class-action lawsuit that had more claimants.
Illinois state law required companies like Facebook to obtain permission to use facial recognition software. The law caught Facebook off guard. Facebook was not alone, as Google, through its photo services Shutterfly, used consumer data without permission.
The companies have since lobbied in Illinois state courts that the laws did not apply to them. Their organizations should be exempt, but the lawmakers felt different concerning the matter, and the statute continues to stand.
However, parties are still hammering out the full final Facebook deal, which is most likely to accepted by the courts later this year. Residents of Illinois should not expect to receive funds for 2020. Since the agreement is still under final review, claimants should expect compensation payouts in 2021.
A judge currently reviewing the case wants Facebook to pay more money. Penalties for privacy violations are generally in the range of $5,000. This means that Facebook would have to pay $47 billion which is a staggering amount.
Of course, Facebook never agreed to pay this amount. A Facebook representative said, “We are focused on settling as it is in the best interest of our community and our shareholders to move past this matter.”
The Facebook Biometric Information Privacy Litigation lawsuit has many technology companies set on edge — as they also could be sued. The case number is 15-CV- 03747-JD. Facebook used facial data for its “Tag Suggestions” without telling users how their data was going to be used for advertising etc. Since then, Facebook has cried foul to these allegations.
The “Tag Suggestions” can tell onlookers the names of people based upon their online photos. The lawsuit will not have too much bearing on Facebook’s bottom line. Facebook’s profits average about $7 billion per quarter, from revenues of $25 billion.
The chief financial officer for Facebook, David Wehner, said that “we decided to pursue settlement as it was in the best interest of our community and our shareholders to move past this matter.”
Facial Recognition Laws
Technology firms want to change privacy facial recognition laws. The lawyer for Facebook, Jay Edelson, said the settlement negotiations emphasizes the need to update the privacy laws. Society understands the value of gun rights and women’s reproductive rights. The right to participate in “society anonymously is something we cannot afford to lose.”
The American Civil Liberties Union is arguing for consumer rights. People should feel anonymous while in public. But this onslaught of new facial software in general society is hampering upon these ideas. More technology companies like Amazon and Clearview AI are selling their facial software to federal and state law enforcement agencies.
Facial recognition software will be a powerful surveillance tool used in the FBI database, on the street, and at the airport. This new level of surveillance will feel like a police state or an invasion of privacy in public and secluded spaces.
Other states are getting on board to stop the use of gross privacy violations. According to Illinois state law, consumers can file lawsuits requesting at least $5,000 in damages for biometric privacy violations. Because of the trial, Facebook has updated its privacy user settings for facial recognition. Now, this technology is widely in use for Facebook in Europe without the complications of espionage.
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