Facebook Sweetens Biometric Privacy Accord to $650 Million

Facebook Inc. bowed to a judge’s concerns and proposed increasing its settlement offer to $650 million to resolve claims by users that the company illegally gathered biometric data through a photo-tagging tool.

A federal judge had voiced skepticism about whether $550 million was enough to compensate millions of Illinois users on the social network who are covered by the class-action privacy case.

U.S. District Judge James Donato in San Francisco said during a virtual hearing Thursday that the new proposal seemed “incrementally better,” though he hasn’t approved it yet.

“I would say it looks like, it looks, pending further review, that most of my concerns were addressed,” Donato said.

Class members will be paid $200 to $400, compared with $150 to $300 under the original proposal. If forced to go to trial, Facebook would face a demand for billions of dollars in damages under the Biometric Information Privacy Act in Illinois.

Donato called for a robust outreach to ensure Facebook users come forward to make claims.

“You are all fond of telling me this is a record-breaking settlement and that may be,” he told attorneys for Facebook and class members. “But I want to see a record-breaking claims rate as well.”

A legal expert said the judge’s refusal to rubber-stamp the settlement sends a message that could reverberate in other cases.

“Although the Facebook litigation is unique in several respects, the court’s initial rejection of a half-billion settlement and demand for a ‘record-breaking’ settlement will almost certainly lead to other courts applying significantly increased scrutiny to data-privacy settlements or settlements for claims with statutory damages,” said Rusty Perdew, a Chicago-based partner at Locke Lord.

Gary McCoy, a Facebook product manager, told the judge the company is working on notifications and posts at the top of users’ news feeds to notify class members, in addition to newspaper ads, Facebook banner ads and emails.

“We are using the most aggressive methods that we use to reach users in the way that we best can at Facebook,” said McCoy, who’s been working with Facebook’s facial recognition program since 2017.

Facebook plans to do away with “turgent” legal language in claims notifications and will design them to be more user friendly, said Michael Rhodes, an attorney for Facebook.

The case is In re Facebook Biometric Information Privacy Litigation, 3:15-cv-03747, U.S. District Court, Northern District of California (San Francisco).