01/21/2021
Key takeaway: Illinois was one of the first states to pass biometric privacy laws and others have followed suit now that they see how much companies profit from this data. Facebook settled for $650M and we wonder how long before Instagram faces the music and settles?
The Illinois State Legislature passed the Biometric Information Privacy Act (BIPA) in 2008 to protect against the unlawful collection and storage of a person’s biometric information in Illinois. In 2020 plaintiff’s counsel filed a class action lawsuit against Facebook alleging that Facebook violated BIPA by illegally storing the biometric face templates of users who were tagged in photos without their consent. Facebook settled the class action lawsuit for $650 million after being scolded by the Judge that an earlier offer to settle for $500 million was not enough given a $1,000 minimum penalty per violation if proven guilty.
Remarkably, in early 2020, Facebook reported 2.47 billion daily active users and 3.14 billion monthly active users across all of its offerings—e.g., Facebook, Instagram, Facebook Messenger, WhatsApp, and Oculus. Given that user volume, it is not surprising that Facebook settled instead of potentially facing a multibillion-dollar penalty if proven guilty in court.
It is also now clear just how much data Facebook stores and all for the purpose of profiting from its sale. Facebook, in particular, recognized early on how much their user data was worth, so they tried to expand their market share by hiring, Onavo, a web analytics firm, to assist with the surveillance of Facebook’s competitors and eventually relied on Onavo to work through the process of acquiring Instagram for $1B.
The purchase of Instagram in 2012 was natural for Facebook to do as it saw its users transition more of their time and attention away from Facebook to Instagram. More importantly the acquisition was a way for Facebook to gain market share and user data in the social media space. Like all high-profile corporate transactions, Facebook had to overcome antitrust concerns, but now they are facing another BIPA class action accusing them of once again illegally collecting biometric face templates. This time it relates to Instagram users. Given how much Facebook values data, it is easy to imagine they knew exactly what information Instagram was collecting when analyzing photos or video content. Generally speaking, Facebook should continue to strengthen its privacy policies given the behemoth it is today but doing so could potentially cost them dearly in bottom line profit. I leave you with a short quote from the Judge in the Facebook BIPA case commenting on the companies involved:
“The other thing I'm concerned about is the scope of the parties released. It includes all of… 'Facebook's sister and affiliated companies.' I mean, you know, that's Instagram. That's Oculus. That's WhatsApp...I am not willing to let those companies off the hook in this case, where they weren't defendants, claims against them were not articulated, and the amount that the aggrieved people are going to get is $150. That just doesn't seem right to me."
https://legiscan.com/NY/text/A00027/2021?fbclid=IwAR2vX5kOMgTS2NKpBRwXctkYZU2OWUnWAw4NcI1Mq6r_fKfR_nl_JiUPK24