Judge Refuses to Sign Off on $550 Million Facebook Facial Privacy Deal

During a preliminary settlement approval hearing held on Thursday via video call, US District Judge James Donato refused to sign off on Facebook’s $550 million data privacy settlement with a class of Illinois users, saying that lawyers must first explain why the deal only provides 1.25% of the compensation to which class members could be entitled under the state’s biometric privacy law.

Nimesh Patel, the lead plaintiff, sued Facebook in 2015, claiming that the social media company mapped users’ faces for its “Photo Tag Suggest” function in 2011 without those users consent, while also failing to inform them about how long their data would be stored, breaching the 2008 Illinois Biometric Information Privacy Act (BIPA).

BIPA specifies a $1,000 penalty for each negligent violation of this statute and $5,000 for each knowing violation. As the class comprises around seven million Illinois Facebook users, the penalty could been as much as $35 billion.

Judge Donado remarked on this during the hearing, asking why the greater damages amount of $5,000 was not pushed for in the settlement. As Facebook paid a $5 billion fine to the Federal Trade Commission last year to settle a claim that it had deliberately deceived its users about their ability to control their private information, Donado argued that this could be counted as sufficient evidence that they knowingly violated BIPA in this case.

“It looks to me that what Facebook did to violate the BIPA may also have been a violation of that prior FTC consent decree, in which case you have a pretty good argument that this is an intentional or reckless violation of BIPA that would warrant $5,000,” he said. “They’re taking what is essentially a 98.75% discount off what the IL said should be the damages.”

Donato ordered lawyers on both sides to address his concerns within the next few weeks.