Meta agrees to pay Texas $1.4 billion over privacy lawsuit. Here’s what that means
Facebook’s parent company Meta has agreed to pay Texas $1.4 billion to settle a lawsuit that alleges the company was capturing user’s biometric data without authorization.
Texas Attorney General Ken Paxton announced the settlement on Tuesday, which stems from a lawsuit his office filed in February 2022. Meta is a tech company that owns Facebook, Instagram and WhatsApp.
Paxton’s lawsuit alleged that Meta was unlawfully capturing the biometric data of millions of Texans without obtaining their consent, which is required by state law. Specifically, Meta allegedly violated Texas laws on the “capture or use of biometric indentifer” and “deceptive trade practices”.
In 2011, Meta introduced a new feature that made it easier for users to “tag” photographs using the names of the people in the photo. Meta allegedly automatically turned on this feature for Texans, without explaining how the feature worked, Paxton’s office said.
For more than a decade, Meta ran facial recognition software on faces in photographs uploaded to Facebook and captured the records and facial geometry of Texans, Paxton’s office said. Meta shut down the tagging feature in 2021, according to The Verge.
“After vigorously pursuing justice for our citizens whose privacy rights were violated by Meta’s use of facial recognition software, I’m proud to announce that we have reached the largest settlement ever obtained from an action brought by a single state,” Paxton said in a press release.
Texas laws on biometric indentifer and deceptive trade practices were highlighted by Paxton’s office in the lawsuit. Here’s what to know about these two laws:
What is the Texas law on capture of biometric data?
Under Texas Business and Commerce Code section 503.001, a “biometric identifier” means a retina or iris scan, fingerprint, voiceprint or record of hand or face.
A person may not capture a biometric identifier of an individual for a commercial purpose unless the person:
- Informs the individual before capturing the biometric identifier.
- Receives the individual’s consent to capture the biometric identifier.
What is the Texas law on deceptive trade practices?
Under Texas Business and Commerce Code section 17.46, deceptive trade practices are defined as false, misleading or deceptive acts in the conduct of trade or commerce.
According to the law, “false, misleading, or deceptive acts or practices” include, but is not limited to, the following acts:
- Passing off goods or services as those of another.
- Causing confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services.
- Causing confusion or misunderstanding as to affiliation, connection, or association with, or certification by, another.
- Using deceptive representations or designations of geographic origin in connection with goods or services.
- Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which the person does not.
What happens next?
Now, Meta will pay the state of Texas $1.4 billion over five years.
In a statement to Axios, Meta did not admit to any wrongdoing in the settlement and shared the following comment:
“We are pleased to resolve this matter and look forward to exploring future opportunities to deepen our business investments in Texas, including potentially developing data centers,” a Meta spokesperson told Axios.
The settlement is the largest ever obtained by a single state, Paxton’s office said. It also tops the $392 million settlement obtained by 40 states in November 2022 from Google.
“This historic settlement demonstrates our commitment to standing up to the world’s biggest technology companies and holding them accountable for breaking the law and violating Texans’ privacy rights,” Paxton said. “Any abuse of Texans’ sensitive data will be met with the full force of the law.”
