Facebook to pay Illinois users $650m to settle privacy case

The case between Facebook and users in the state of Illinois represents the biggest consumer privacy settlement in US history.

Facebook will be making payouts to only about a quarter of the six million Illinois residents eligible for the biggest consumer privacy settlement in US history [File: Gabby Jones/Bloomberg]
Facebook will be making payouts to only about a quarter of the six million Illinois residents eligible for the biggest consumer privacy settlement in US history [File: Gabby Jones/Bloomberg]

Facebook Inc. will be making payouts to only about a quarter of the 6 million Illinois residents eligible for the biggest consumer privacy settlement in U.S. history.

Based on a tally filed in court after Monday’s claims deadline, some 1.57 million people will probably pocket more than $300 each — after about a third of the $650 million settlement fund is set aside for their attorneys and administrative costs — from a lawsuit in which the social network was accused of collecting biometric images from its photo-tagging feature without consent.

As class actions go, with nickel-and-dime payouts often not worth the effort of filing a claim, a case that ends up with a 25% buy-in from consumers is a success story. Frequently, fewer than 10% of eligible people file claims.

In Facebook’s case, the judge was initially skeptical if a settlement of less than $1 billion was fair, considering that if users had taken the company to trial they could have sought damages of as much as $5,000 for each violation of the Illinois Biometric Privacy Information Act.

To get U.S. District Judge James Donato on board, the company and the lawyers for consumers added an extra $100 million to what was originally a $550 million accord, and they promised an extra-aggressive outreach effort, which included pinging Facebook users directly through their accounts to alert them to the cash jackpot. Final approval of the deal is scheduled for early in 2021.

 

Source : Bloomberg

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