Meta, formerly known as Facebook, has reached a $1.4 billion settlement with the state of Texas over its use of biometric data. This settlement, announced by Texas Attorney General Ken Paxton, is the largest ever obtained from an action brought by a single state and marks a significant victory in the enforcement of privacy laws.
Background and Legal Context
The lawsuit, initiated in February 2022, stemmed from Meta's "Tag Suggestions" feature introduced in 2011. This feature, which used facial recognition software to suggest tags for individuals in photos, was automatically enabled for all Texas users without explicit consent. This practice violated Texas’s Capture or Use of Biometric Identifier (CUBI) law, enacted in 2009, which mandates that companies must inform individuals and obtain their consent before capturing biometric data.
Attorney General Paxton emphasized the magnitude of the settlement, comparing it to the $390 million settlement reached with Google in late 2022 by a coalition of 40 states over similar privacy violations. Paxton stated, “This historic settlement demonstrates our commitment to standing up to the world’s biggest technology companies and holding them accountable for breaking the law and violating Texans’ privacy rights" (USA Today).
Details of the Settlement
Meta will pay Texas the $1.4 billion over five years. Despite the settlement, Meta did not admit to any wrongdoing. A spokesperson for the company stated, "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" (USA Today).
This settlement is particularly noteworthy as it is the first lawsuit and settlement under Texas’s CUBI law, setting a precedent for future enforcement actions. The law allows the state to impose damages of up to $25,000 per violation, highlighting the significant financial risks tech companies face when failing to comply with biometric privacy regulations.
Implications for the Tech Industry
The settlement with Meta underscores the increasing scrutiny and legal challenges that major technology companies face regarding their data collection practices. Privacy advocates have praised the settlement as a critical step in addressing the unauthorized collection and use of sensitive biometric data, such as facial, fingerprint, voice, and retina identification.
Alan Butler, executive director of the Electronic Privacy Information Center, remarked, "It is a recognition of the growing risks and threats posed by breaches and by unauthorized collection and use of sensitive data" (USA Today).
Ongoing Legal Challenges
Meta is not alone in facing legal challenges over biometric data usage. The company previously settled a similar lawsuit with Illinois for $550 million in 2020. Additionally, Texas has also sued Google for allegedly violating the same biometric privacy law through products like its Nest home device. In 2022, Google agreed to pay $391 million to settle a lawsuit brought by a coalition of 40 states over misleading users about location tracking practices.
The $1.4 billion settlement between Meta and Texas represents a significant milestone in the enforcement of biometric privacy laws. It serves as a potent reminder to tech companies about the importance of obtaining explicit consent before collecting sensitive biometric data. As legal scrutiny intensifies, technology firms must prioritize compliance with privacy regulations to avoid substantial financial penalties and protect user privacy.
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