Risk & Compliance

Facebook Settlement May Trigger More Privacy Laws

The social media giant's $550 million settlement of a class-action case alleging that it violated an Illinois privacy statute could have a ripple e...
David McCannFebruary 11, 2020
Facebook Settlement May Trigger More Privacy Laws

Facebook’s recent $550 million settlement of a class-action lawsuit in Illinois over alleged privacy violations may lead to a wave of privacy legislation across the country.

The largest-ever cash settlement resolving a privacy-related issue will establish a fund to be shared by Illinois Facebook users. In the case, Patel v. Facebook Inc., plaintiffs alleged that the social media giant violated the state’s Biometric Information Privacy Act (BIPA) by its use of facial recognition software without users’ consent.

Michael Canty, a partner at law firm Labaton Sucharow who served as plaintiffs’ co-lead counsel, predicts that the settlement will be a point of reference for lawmakers in many other states as well as Congress, where laws similar to Illinois’ BIPA are under consideration.

Currently, in addition to Illinois, only California, Texas, and Washington have biometric privacy laws, which are intended to regulate the collection of computer data based on people’s identifying physical characteristics.

The Illinois law, enacted in 2008, is the oldest among them and the most stringent, according to Canty. It has stirred controversy because it’s the only biometric privacy statute that allows consumers to bring suit for monetary damages if their rights are violated.

“States are looking hard at the Illinois statute and now also will be looking at the Facebook settlement in developing similar laws,” Canty says.

Hundreds of lawsuits have been brought in the state under BIPA. In fact, some observers have argued that the law has unleashed excessive litigation and may have a chilling effect on technology innovation. However, it’s working as intended, according to Canty, a former Assistant U.S. Attorney for the Eastern District of New York.

“Illinois wanted a private right of action and has gotten results,” he says. “We all want to move forward with innovative technology, but consumers need to have protections with teeth.” He adds, “As technology advances, corporations must be mindful of the privacy of their customers.”

The Facebook litigation in Illinois was brought in 2015, when three separate class actions alleged that Facebook violated BIPA with its “Tag Suggestions” feature. Facebook moved the cases to the U.S. District Court for the Northern District of California, where they were consolidated.

The Ninth Circuit approved the class certification last August, after which Facebook asked the U.S. Supreme Court to review the case. The high court rejected the petition without comment. Canty says the district court is expected to rule on the settlement agreement by mid-summer.

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