Facebook Proposes $650M Privacy Class Action Settlement

UPDATE: A judge granted final approval to this settlement Jan. 14, 2021, according to the settlement website. Distribution of settlement checks will begin once appeals are resolved, which sometimes can take over a year. Top Class Actions will keep you informed of the progress on this settlement.

A California judge appeared ready Thursday to give a preliminary go-ahead to a revised $650 million Facebook privacy class action settlement.

The social media giant increased its settlement amount from $550 million after U.S. District Judge James Donato expressed concern that the lower figure might not be enough to compensate the millions of Illinois Facebook users covered by the class action, Bloomberg reported.

At the root of the Facebook privacy class action lawsuit was a claim that the social media company was gathering facial data for a feature that offers suggestions as to the identity of people in other Facebook users’ photos, USA Today explained.

Facebook’s original offer would have netted payouts of $150 to $300 for each Class Member.

“It’s $550 million,” Judge Donato told lawyers at a June hearing. “That’s a lot. But the question is, is it really a lot?”

However, during a Zoom hearing Thursday, Judge Donato reportedly said the new settlement deal in the Facebook privacy class action appeared to address most of his concerns.

Under the revised settlement, Class Members are expected to receive $200 to $400. If the case had gone to trial, Facebook would have faced a potential payout of billions of dollars under Illinois’ Biometric Information Privacy Act.

“You are all fond of telling me this is a record-breaking settlement and that may be,” Judge Donato told both parties’ attorneys. “But I want to see a record-breaking claims rate as well.”

The revised filing states that the plaintiffs and Class counsel believe their Facebook privacy claims have merit and that they would be successful at trial and on any appeals that may arise. However, they also recognize “Facebook has raised relevant factual and legal defenses that pose risks to the Class.”

Specifically, the filing continues, they run the risk of “obstacles to an aggregate recovery” for the Class, and that issues of law would be reviewed on appeal after the plaintiffs won their case.

“Class Counsel believe that this Agreement eliminates uncertainty in the outcome and presents an exceptional result for the Class, and one that will be provided without delay,” the document states, and therefore the plaintiffs accept the settlement.

Facebook has denied all alleged wrongdoing and liability and also believes it would prevail in any trial on the merits; however, the company has concluded the settlement was acceptable to “avoid the time, risk, and expense of defending protracted litigation, and to avoid the risk posed by the Class’s claims for substantial damages,” the filing says.

In addition to the $650 million figure, Facebook users in the Class can also expect the company to take other steps to ensure their privacy under the terms of the settlement.

Facebook will set Class Members’ facial recognition setting to “off” within 90 days of the effective date and delete any existing face templates unless the company obtains express consent from the user within 180 days.

In obtaining said consent, Facebook will disclose to users in a separate document how it will use the templates that may be created.

Facebook also will delete the face templates of any Class Members with no activity on the platform for three years as of the effective date without going through the same approval process. 

Those requirements do not apply for Facebook users who signed up for the social media site after Sept. 3, 2019, or who manually enable the facial recognition setting themselves after Facebook had disabled it for those Class Members. 

“We are focused on settling as it is in the best interest of our community and our shareholders to move past this matter,” Facebook said in a statement.

Settlement payments are expected to be sent within 60 days of the effective date to Class Members who submit a claim form.

What do you think of the new terms of the Facebook privacy settlement? Let us know in the comments.

The plaintiffs and Class are represented by Shawn A. Williams, John H. George, Patrick J. Coughlin, Ellen Gusikoff Stewart, Lucas F. Olts, Randi D. Bandman, Paul J. Geller, Stuart A. Davidson and Christopher C. Gold of Robbins Geller Rudman & Dowd LLP; Michael P. Canty and Corban S. Rhodes of Labaton Sucharow LLP; Jay Edelson, Benjamin Richman, Alexander G. Tievsky, Rafey Balabanian and Lily Hough of Edelson PC; and Michael G. Rhodes and Whitty Somvichian of Cooley LLP.

The Facebook Biometric Privacy Class Action Lawsuit is Nimesh Patel, et al. v. Facebook Inc., Case No. 3:15-cv-03747-JD, in the U.S. District Court for the Northern District of California, San Francisco Division.

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