Meta's Facebook to pay $120 million to settle decade-old privacy lawsuit over user tracking

Users say the Meta Platforms unit used plug-ins to store cookies that tracked when they visited outside websites containing Facebook "like" buttons. PHOTO: REUTERS

NEW YORK (REUTERS) - Facebook agreed to pay US$90 million (S$121 million) to settle a decade-old privacy lawsuit accusing it of tracking users' Internet activity even after they logged out of the social media website.

A proposed preliminary settlement was filed on Monday night (Feb 14) with the United States District Court in San Jose, California, and requires a judge's approval. The accord also requires Facebook to delete data it collected improperly.

Users accused the Meta Platforms unit of violating federal and state privacy and wiretapping laws by using plug-ins to store cookies that tracked when they visited outside websites containing Facebook "like" buttons.

Facebook then allegedly compiled users' browsing histories into profiles that it sold to advertisers.

The case had been dismissed in June 2017, but was revived in April 2020 by a federal appeals court, which said users could try to prove that the Menlo Park, California-based company profited unjustly and violated their privacy.

Facebook's subsequent effort to persuade the US Supreme Court to take up the case was unsuccessful.

The company denied wrongdoing but settled to avoid the costs and risks of a trial, according to settlement papers.

Settling "is in the best interest of our community and our shareholders and we're glad to move past this issue", Meta spokesman Drew Pusateri said in an e-mail.

The settlement covers Facebook users in the US who between April 22, 2010 and Sept. 26, 2011 visited non-Facebook websites that displayed Facebook's "like" button.

Lawyers for the plaintiffs plan to seek legal fees of up to US$26.1 million, or 29 per cent, from the settlement fund. The lawsuit began in February 2012.

Facebook has faced other privacy complaints.

In July 2019, it agreed to bolster privacy safeguards in a US Federal Trade Commission settlement that also included a US$5 billion fine.

Texas sues Facebook

On Monday, Texas' attorney general's office sued Meta's Facebook, alleging that the social media giant violated state privacy protections with facial-recognition technology that collected the biometric data of millions of Texans without their consent.

The lawsuit accuses Facebook of capturing biometric information from photos and videos that users uploaded without consent, disclosing the information to others and failing to destroy it within a reasonable time.

"This is yet another example of Big Tech's deceitful business practices and it must stop. I will continue to fight for Texans' privacy and security," Attorney General Ken Paxton said in a statement.

The lawsuit was first reported by the Wall Street Journal, which cited a person familiar with the matter as saying that the state was seeking hundreds of billions of dollars in civil penalties.

Asked about the lawsuit, a Meta spokesman said: "These claims are without merit and we will defend ourselves vigorously."

The company said in a blog post in November that it was shutting down a facial recognition system and would delete more than a billion people's information. It cited concerns about use of the technology and uncertainty over what the rules are regarding its use.

It also agreed to pay US$650 million in 2020 to settle an Illinois state lawsuit that dealt with similar concerns.

The new lawsuit, which was filed in a state court in Marshall, Texas, says that 20.5 million Texans have a Facebook account.

"The scope of Facebook's misconduct is staggering," the lawsuit said. "Facebook repeatedly captured Texans' biometric identifiers without consent not hundreds, or thousands, or millions of times - but billions of times," the lawsuit said.

Join ST's Telegram channel and get the latest breaking news delivered to you.