Meta has agreed to a landmark $1.4 billion settlement with Texas in a high-profile privacy lawsuit concerning the unauthorized use of facial recognition technology. Filed in 2022, the lawsuit accused Meta of violating Texas state laws by collecting and using residents’ biometric data, including facial features, without their explicit consent. This settlement is notable for being the largest ever secured by a single state, significantly surpassing the $650 million settlement reached with Illinois in 2021 over similar issues. Texas Attorney General Ken Paxton highlighted the settlement as a major victory in holding large technology companies accountable for breaching privacy rights.
The legal action against Meta, formerly known as Facebook, stems from allegations that the tech giant’s facial recognition system was used to capture and analyze biometric information of users without proper consent. In response to the lawsuit, Meta has expressed its satisfaction with the resolution and indicated a future focus on expanding its business investments in Texas, potentially including new data centers. The company’s acknowledgment of the settlement reflects its broader strategy of addressing legal challenges while continuing to invest in growth opportunities.
This settlement adds to Meta’s already significant tally of privacy-related financial penalties, bringing the total amount paid in biometric privacy claims to over $2 billion. This substantial financial commitment underscores the severe consequences that tech companies face when mishandling biometric data. Jay Edelson, a class action attorney who previously secured a $650 million settlement with Meta, emphasized that this settlement serves as a strong warning to other companies about the risks associated with trading in personal biometric information.
Despite the settlement, Meta’s financial performance remains robust. The company reported a profit of $12.37 billion for the first quarter of 2024 and a 27% increase in revenue year-over-year. The company’s stock experienced only a minor decline of less than 1% following the announcement. This situation highlights the ongoing challenges and scrutiny faced by tech giants regarding data privacy and the significant legal and financial impacts of privacy violations.
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