Facebook Reaches $550 Million Settlement in Facial Recognition Lawsuit

Facebook has been under fierce scrutiny worldwide in recent years over its privacy practices.

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Facebook Reaches $550 Million Settlement in Facial Recognition Lawsuit

Facebook is the world's second-biggest seller of online ads

Highlights
  • Facebook said it reached a $550 million settlement in principle
  • It reported its slowest-ever revenue growth for Q4
  • Facebook has been under fierce scrutiny worldwide

Facebook said on Wednesday it reached a $550 million (roughly Rs. 3,900 crores) settlement in principle related to a lawsuit that claimed it illegally collected and stored biometric data for millions of users without their consent. The lawsuit began in 2015, when Illinois users accused Facebook of violating the state's Biometric Information Privacy Act in collecting biometric data.

Facebook allegedly accomplished this through its "Tag Suggestions" feature, which allowed users to recognise their Facebook friends from previously uploaded photos.

In a statement, law firms Edelson, Robbins Geller and Labaton Sucharow said the plaintiffs will ask the district court to give preliminary approval for the settlement.

Earlier, Facebook reported its slowest-ever revenue growth for the fourth quarter, at 25 percent, and Facebook's chief financial officer, David Wehner, said on a call with investors that the pace of expansion will slow further in the first quarter of 2020. Wehner forecast a percentage point decline in the growth rate in the low- to mid-single digits, citing Facebook's maturing business, the impact of global privacy regulation and concerns about ad targeting.

Facebook, the world's second-biggest seller of online ads, has been under fierce scrutiny worldwide in recent years over its privacy practices. It is also facing heat over how its services have been manipulated to spread misinformation.

The company addressed those issues starting in mid-2018 following repeated scandals, causing growth in expenses to surge by more than 100 percent for several quarters as it hired privacy staff and invested in content moderation.

© Thomson Reuters 2020

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