Meta Platforms has reached a monumental agreement valued at $1.4 billion with the state of Texas to resolve a lawsuit concerning the company's use of facial recognition technology to collect biometric data. Texas Attorney General Ken Paxton announced the settlement on Tuesday, emphasizing the implications of consumer privacy. The contentious issue at hand revolves around a feature introduced by Meta in 2011, designed to enhance user experience by assisting individuals in tagging their photos with the names of those appearing in the images.
However, the Texas Attorney General's office pointed out that the feature was automatically enabled for Texans without clear communication regarding its functionality or the underlying data collection processes involved. "Unbeknownst to most Texans, for over a decade, Meta has employed facial recognition software on nearly every face depicted in photographs uploaded to Facebook, amassing records of the facial geometry of individuals captured in those images," stated the Attorney General's office in their announcement. This alarming revelation highlighted a potential violation of Texas's Capture or Use of Biometric Identifier Act, which explicitly prohibits companies from collecting personal biometric identifiers without obtaining informed consent from users.
In response to this breach of privacy rights, Attorney General Paxton initiated legal proceedings against Meta in February 2022. In discussing the resolution, Paxton remarked, "After vigorously pursuing justice for our citizens whose privacy rights were infringed upon by Meta's facial recognition practices, I am proud to reveal that we have secured the largest settlement ever obtained from an individual state lawsuit." The settlement is structured as a payment plan over five years, marking a significant financial arrangement for Meta.
In an official response to MT Newswires, a spokesperson for Meta expressed satisfaction in resolving the matter and expressed intentions to further invest in Texas, including the potential development of new data centers in the state. Despite the settlement, the agreement stipulates that Meta has not admitted any wrongdoing in connection with the case. As part of a broader response to growing scrutiny over privacy issues related to facial recognition technologies, Meta announced in late 2021 its decision to discontinue its facial recognition system on Facebook. Looking ahead, Meta is expected to release its financial results for the second quarter on Wednesday, with analysts surveyed by Capital IQ anticipating earnings of $4.76 per share on a revenue forecast of $38.31 billion.
In the preceding second quarter of 2023, Meta reported earnings per share of $2.98 with a revenue of $32 billion, showcasing a significant year-on-year increase in their fiscal profile. Price: 464.06, Change: -1.65, Percent Change: -0.35.