Facebook Faces Trial as Court Rejects Bid to Block $35 Billion Lawsuit
A federal appeals court denies Facebook's request to halt a massive class action lawsuit over its facial recognition practices. The case now moves toward trial, threatening the company with up to $35 billion in penalties.
A federal appeals court denies Facebook's request for a full panel hearing to stop a massive $35 billion class action lawsuit. The case alleges that Facebook scans user photos for facial recognition without proper consent from Illinois citizens. With this latest legal defeat, the lawsuit proceeds to trial unless the Supreme Court decides to intervene.
The legal battle centers on a feature that suggests photo tags by mapping faces, a practice the plaintiffs argue violates Illinois privacy laws. If Facebook loses, it faces potential penalties of $1,000 to $5,000 per user for approximately 7 million people. One judge notes that this biometric data potentially allows the identification of individuals in surveillance footage or the unlocking of secured phones.
Facebook strongly disputes the claims, insisting that it always informs users about its face recognition technology and provides controls to manage it. Despite these defenses and various legal maneuvers to derail the case since 2015, the looming threat of this penalty causes a 2.25% drop in the company's share price. This potential financial hit easily dwarfs the recent record-breaking $5 billion settlement Facebook reaches with the FTC.