Facebook could pay $550 million to Illinois users in privacy settlement

Facebook is settling allegations that its facial recognition practices violate Illinois privacy rights by paying $550 million to users in the state.

The lawsuit was filed in Illinois in 2015, alleging that Facebook violated Illinois privacy regulations with a feature that suggested to users other people to tag in their photos. Facebook replaced the tag suggestion tool with a broader facial recognition setting last year.

According to a report from the Chicago Tribune, each user that is part of the class action settlement could receive a couple of hundred dollars from Facebook.

But the lawsuit was moved to San Francisco, so a federal court judge there must approve the settlement. Anyone eligible to claim a portion of it will be notified later, Jay Edelson, founder of and CEO of Edelson PC, one of the firms representing the plaintiffs, told the Tribune.

Representatives from Edelson PC did not immediately respond to a Chicago Sun-Times request for comment.

Abe Scarr, director of the Illinois Public Research Group, which filed an amicus brief supporting the plaintiffs, said in a statement that the settlement is “a victory for consumer privacy rights and a victory for strong, enforceable state privacy laws.”

“Biometric information is uniquely sensitive. You can cancel your credit card. You can’t cancel your face,” Scarr said. “We should know who is collecting and commercializing information created from the stuff our lives are made of.”

Scarr said people should be able to opt into or opt out of any programs using “pervasive, intrusive surveillance.”

Facebook is undergoing regulatory scrutiny around the world. In the U.S., it faces several government investigations for alleged anti-competitive behavior. Last August, it was fined $5 billion by the Federal Trade Commission for privacy violations, the largest FTC fine ever for a tech company.

Amid ongoing criticism about how Facebook handles the private data of its users, CEO Mark Zuckerberg has announced that the company was shifting course for a more “privacy-focused” future. This includes emphasizing small-group and private communication, though details are still scant.

It’s not clear if this privacy focus will mean anything for how ads on Facebook are targeted, which has always been among the chief concerns for privacy advocates.

And Facebook continues to face challenges over election interference. After Russian actors used social media platforms like Facebook to interfere in the 2016 U.S. elections, the companies have tried to clamp down on fake accounts, misinformation and other forms of misuse. This Election Day will be a test of whether they’ve done enough.

In reporting fourth-quarter results Wednesday, Facebook said it earned $7.35 billion, or $2.56 per share, up 7% from $6.88 billion, or $2.38 per share, a year earlier. Revenue rose 25% to $21.1 billion from $16.9 billion, the bulk of that from ads. Analysts were expecting earnings of $2.52 per share and revenue of $20.9 billion, according to FactSet.

Facebook’s stock dropped more than 6% in after-hours trading after the results came out. Some investors may be concerned about the company’s growing expenses, while others could simply be cashing out following a record high for the stock earlier in the day.

Contributing: Sun-Times staff