Facebook faces $650M payout in privacy case

A $550-million US settlement was not enough for Illinois Facebook users who allegedly had their privacy rights violated. Instead, the social media giant has agreed to pay $650 million.

Illinois Facebook users could be eligible for up to $400 each as part of the new settlement in the class action suit, depending on how many people file claims, according to court documents filed this week in a California federal court.

The settlement stems from a federal lawsuit filed in Illinois five years ago that alleges the social-media giant violated a state law protecting residents’ biometric information. Biometric information can include data from facial, fingerprint and iris scans.

Illinois has one of the strictest biometric privacy laws in the United States, mandating that companies collecting such information obtain prior consent from consumers, detail how they’ll use it and specify how long the information will be kept. The law also allows private citizens, rather than just government entities, to file lawsuits over the issue.

Facebook agreed to pay the $550-million settlement in January, but lawyers representing both sides filed a new settlement on Wednesday upping the figure by $100 million. U.S. District Judge James Donato rejected the initial settlement at a court hearing June 4. Donato expressed concerns about whether the estimated payout range of $150 to $300 per eligible Facebook user would be adequate. Lawyers attempted to address those concerns with the $650-million settlement, which Donato must approve.

He must also approve plans for how to notify eligible Facebook users. According to plans detailed in the new settlement, class members will be notified via email and on Facebook. A notice will appear in eligible users’ profiles and a notification will pop up in their Facebook news feeds.

The class is defined as Facebook users in Illinois over age 18 whose images the company used to create a stored face template after June 7, 2011, the date Facebook said its tag suggestion feature was available in most countries. Users must have also lived in the state for at least six months.

The amount each eligible user receives will depend on how many make a claim.

“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.

Lawyers from Edelson, a Chicago law firm representing Facebook users, declined to comment.