The class action case alleged that Facebook’s photo-scanning technology violated an Illinois law by gathering and storing biometric data without user permission.

Facebook to pay 500 mn to settle lawsuit claiming it stored user data without consent
Atom Legal Friday, January 31, 2020 - 11:13

Mark Zuckerberg-led Facebook is trying to settle a legal claim on it by making a payment of $550 million. This is in a class action suit in which the social media platform has been accused of collecting biometric data of users without consent. If the settlement is agreed to by the opposing party, then it will be executed with the approval of a judge to give it the shape of finality. This is possibly one of the largest consumer privacy settlements even in US history. Facebook is reported to have chosen this route since going for a trial would have meant the payout could run into billions of dollars.

At the centre of the allegation against Facebook is a law in the US state of Illinois that prohibits gathering and storing biometric data of citizens without their consent. This was done through the photo-scanning technology that is included in Facebook.

Meanwhile the company’s shares were quoted 7% lower in the bourses following the news that the company has posted fourth quarter revenue of $21.1 billion. Interestingly, this figure is 25% more than the revenue for the same quarter in 2018, but such is the high expectation of the market that the shares traded at lower levels. The analysts had predicted a revenue figure of $20.9 billion and Facebook topped this in reality.

The company has said it has 2.89 billion monthly active users of its products, meaning Facebook, WhatsApp, Instagram and Facebook Messenger all put together. But there has been a bit of a stagnation in terms of ad revenues from territories like the US and Canada, its main revenue yielding markets.

Facebook had already issued warnings to the market that having reached a certain level of customer base internationally, the same growth rates are difficult to maintain as saturation levels are reached. Facebook has to keep a watch on its expenses as well, as the company posted expense figures of $12.2 billion, 34% higher that the previous comparable period.

There has been a lot of negativity also associated with the company with federal antitrust probes and congressional hearings where Zuckerberg himself had to appear and testify.

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