Meta Agrees to Pay $14B to Texas for Data Privacy Settlement

Privacy Regulation | Aug 2, 2024

Image: Freepik/upklyak

Meta's $1.4B Settlement for Biometric Data Violations, the Largest Privacy Settlement by a Single State

Meta Platforms Inc. (parent company of Facebook), has agreed to a $1.4 billion settlement with the state of Texas for allegedly collecting and using biometric data from millions of Texans without their consent (see final order)

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This comes after Meta was fined a record-breaking €1.2 billion ($1.3 billion) by the European Union in May 2023. Given the grave consequences of violating someone's biometric privacy, this compensation is the biggest of its type.  Just another cost of doing business?

Lawsuit and Settlement

• The lawsuit, which was filed in 2022, accused Meta of utilizing facial recognition technology to gather biometric information from users by means of its "Tag Suggestions" tool, which recognized people in Facebook images automatically.
• The office of Texas Attorney General Ken Paxton contended that the Capture or Use of Biometric Identifier Act (CUBI) was breached by this approach. The Act mandates specific user agreement for the gathering of biometric data.​​
• Meta will pay $1.4 billion over the course of five years with the first $500 million installment, due within 30 days of the settlement announcement.
• Additionally, Meta is required to notify the Texas Attorney General's office of any future actions involving biometric data, giving the state sixty days to raise objections.

Implications

• Meta has now removed more than 1 billion unique facial recognition templates and stopped offering Tag Suggestions. According to the firm, talks with Texas authorities over biometric data compliance will be made easier with this settlement.

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• This agreement comes after the European Union fined Meta a record-breaking €1.2 billion ($1.3 billion) in May 2023. Meta was fined by the EU for breaking the General Data Protection Regulation for transferring user data from EU users illegally to the US.
• These penalties highlight the growing international scrutiny and regulatory challenges that tech companies must manage related to user permission and data privacy.  Any improper handling of personal data could result in serious financial and reputational consequences.

Attorney General Paxton:

“After vigorously pursuing justice for our citizens whose privacy rights were violated by Meta’s use of facial recognition software, I’m proud to announce that we have reached the largest settlement ever obtained from an action brought by a single State. 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. Any abuse of Texans’ sensitive data will be met with the full force of the law.”

Conclusion

With the proliferation of advanced data-driven technologies like artificial intelligence, companies must prioritize data privacy compliance or face legal and financial repercussions.  This settlement is a win for protecting consumer data and biometric privacy laws, and sets a precedent in the United States and around the globe.  Learn more:  2023 Data Privacy in North America – Year in Review

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