Meta to pay $1.4 billion to settle lawsuit over illegal use of facial recognition data: Explained

Meta has a long-standing history of violating users’ privacy and privacy laws in countries across the globe. In the past, it has been fined several times for these violating. Now, in another such case, the Mark Zuckerberg-owned company has agreed to pay a fine of $1.4 billion in order to settle a lawsuit, which claimed that the company illegally recorded and used users’ biometric data and in doing so, it violated the state’s law that governs the use of such information. Also Read: Meta’s AI Can Now Dub And Translate Instagram And Facebook Reels In Hindi, Portuguese, And More

“We are pleased to resolve this matter and look forward to exploring future opportunities to deepen our business investments in Texas, including potentially developing data centers,” a Meta spokesperson said in a statement to the media. Also Read: WhatsApp Status Sharing On Facebook And Instagram Coming Soon: Here Is How It Will Work

The history of Meta’s latest privacy lawsuit

The matter dates back to 2011 when the company rolled out a feature called ‘Tag Suggestions’. This feature used face-recognition software to suggest names to people to tag in their pictures with taking their permission before doing so. Simply put, the feature enabled users to tag their friends in their photos without their permission. This happened whether or not these friends were Facebook users or not. In the background, the company used advanced facial recognition software to identify people. Also Read: Instagram And Facebook Will Soon Use Your Meta AI Chats To Shape Ads And Content

“When you or a friend upload new photos, we use face recognition software—similar to that found in many photo editing tools—to match your new photos to other photos you’re tagged in. We group similar photos together and, whenever possible, suggest the name of the friend in the photos,” Facebook had written in a blog while originally announcing the feature in December 2010. It was rolled out globally in June 2011.

To mitigate concerns around privacy, Meta (then Facebook) introduced an ‘on/off’ switch that enabled users to opt out of being tagged in photos by others in 2017. Two years later in 2019, the company introduced new settings to let users select if they wanted to use the company’s face recognition technology. It also stopped suggesting photo tags to people automatically.

“We’ve made the steps to update your settings clearer and you can opt to leave your setting off right in the notice, as opposed to having to go to a separate screen. If you do nothing, face recognition will remain off for you,” the company had written in its blog post at the time.

Why is Meta getting fined then?

Meta is getting fined as the Tag Suggestions features and its controls were introduced almost a year after US’ state Texas introduced ‘Capture or Use of Biometric Identifier Act and the Deceptive Trade Practices Act.’

What does Texas’ biometric privacy law say?

The law states that the biometric data of an individual, which includes retina or iris scan, fingerprint, voiceprint, or record of hand or face geometry, cannot be used for commercial purposes without the individual’s explicit consent. The law also prohibits selling, leasing, or disclosing the biometric data unless it has been consented to by the individual or requested by the government. Additionally, the law mandates the individual or the company collecting this data to destroy it within one year of collecting it. You can read more about the law here.

Simply put, Meta was violating Texas’ local laws right from the time it first introduced its Tag Suggestion feature.

When was the lawsuit against Meta filed and what did it say?

In the lawsuit the Attorney General claimed that Facebook collected users’ biometric data without users’ consent and that it disclosed this sensitive information and users’ personal information to ‘other entities who further exploited it’.

“Moreover, Facebook often failed to destroy collected biometric identifiers within a reasonable amount of time…For Texans who did not use Facebook’s social-media services, Facebook was still capturing hundreds of millions of biometric identifiers from photos and videos innocently uploaded by friends and family who did not use Facebook,” the Attorney General wrote in the lawsuit. You can read more about it here.

What judgement did the court pass in the Meta privacy lawsuit?

As mentioned before, Meta agreed to pay a sum of $1.4 billion dollars in order to settle the lawsuit. While that is a lot of money, but it is more like a slap on the wrist for the company that has been fined several times over violating privacy laws in the past.

Meta isn’t required to pay the entire amount in a single go. Instead, the court has ordered it to pay the fine in installments. Here’s a breakdown for you:

— $500,000,000 to be paid within 30 days

— $225,000,000 as the second installment date of which will be determined by the Attorney General

— $275,000,000 as the third installment date of which will be determined by the Attorney General

— Four remaining installments of $225,000,000 each to be paid in 2025, 2026, 2027, and 2028.

Notably, this fine is a fraction of the company’s revenue. For the unversed, Meta’s overall revenue for the year 2023 stood at $134.90 billion. In 2022, its total revenue stood at $116.61 billion.

However, this is not Meta’s first violation

That said, this is not Meta’s first privacy violation. In 2023, the European Union levied a fine of 1.2 billion euros on Facebook. This is the largest fined EU has issued since GDPR was imposed. The fine was imposed for violating the EU’s data privacy rules.

More recently (February 2024), the European Consumer Organisation (BEUC) filed a lawsuit against Meta over allegedly collecting unnecessary amount of information on its users, such as their emotional state or their susceptibility to addition, things that they are unable to consent to.

Prior to that, the company agreed to pay $90 million to settle a 2012 lawsuit that accused the company of tracking users even after they logged out of their accounts. The company has been a part of the Cambridge Analytica scandal among others.