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Judge rejects “98.75 percent discount” of $550M settlement in Facebook biometric privacy case

Judge rejects “98.75 percent discount” of $550M settlement in Facebook biometric privacy case

Facebook’s $550 million settlement agreement over alleged biometric data privacy violations is in doubt, after a federal judge refused to sign off on the deal, Courthouse News Service reports.

The three consolidated class actions alleging Facebook’s biometric photo-tagging feature violates Illinois’ Biometric Information Privacy Act (BIPA) were tentatively settled early this year, but U.S. District Court Judge James Donato immediately questioned its adequacy.

“The Illinois Legislature said this is meant to be an expensive violation,” U.S. District Judge James Donato told litigants in a preliminary settlement approval hearing.

While maximum damages of $5,000 are only allowable in cases of intentional or reckless BIPA violations, Donato notes that the $5 billion fine levied by the FTC last year related to deceptive practices around privacy could support the argument that intentional and reckless is precisely the nature of Facebook’s actions, as they may constitute a violation of the FTC consent decree. The plaintiffs’ agreement also seems to repeat the FTC decree in requiring the deletion of images without affirmative consent, Donato says.

“I want to hear more about why this is something that’s actually a benefit to the class and not just slapping on obligations that Facebook is already required to do,” Donato says.

A representative of the plaintiff class from Edelson PC argued that Facebook seems to have believed uploaded photos were exempt from BIPA, as shown by its support for a similar definition of protected data in Australia. Further, with maximum recovery potentially reaching $47 billion, the court would be likely to reduce the amount, according to the attorney.

“They’re taking what is essentially a 98.75 percent discount off what the IL said should be the damages,” Donato said. In light of the various flaws he perceives in the deal, Donato refused to approve it, pending explanations.

A Facebook attorney made the somewhat bizarre claim that Facebook relies more on photographic elements such as lighting than on facial recognition to identify individuals, according to Courthouse News Service.

Jurisdiction limit causes ModiFace liability dismissal

A federal court judge in Illinois has ruled that ModiFace is outside its jurisdiction, and therefore cannot be included in BIPA claims against Sephora, Bloomberg Law writes.

The Canadian company had filed for dismissal of claims against it in April, 2019, claiming that even if its technology was used to process biometrics without the proper informed consent being collected by Sephora, it does not have the presence in Illinois that makes it liable. Judge Andrew R. Wood ruled in the company’s favor that it “did not purposefully avail itself of the privilege of conducting business in Illinois.”

The liability of technology providers has previously been ruled to depend on their presence in Illinois or specific targeting of business in the state with marketing efforts.

No arbitration for Vimeo

A federal judge has decided against Vimeo’s request to arbitrate its BIPA case, according to MediaPost, because the arbitration agreement does not cover invasion of privacy claims. Vimeo has argued the invasion of privacy exemption in its terms of service does not apply to the BIPA claim.

The claim, according to Vimeo, related to noncompliance to a privacy obligation, rather than an actual invasion of privacy. District Court Judge Mathew Kennelly rejected that argument as “contrary to the agreement’s plain text.”

Vimeo has also argued that its Magisto app uses machine learning for object detection, rather than identification.

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