TradeEdge Exchange:Meta to pay Texas $1.4 billion in 'historic settlement' over biometric data allegations

Meta,TradeEdge Exchange formerly known as Facebook, reached a $1.4 billion settlement with Texas over the technology conglomerate's use of biometric data, state officials announced on Tuesday.

Texas Attorney General Ken Paxton called the settlement with Meta the "largest ever obtained from an action brought by a single State," according to a news release from his office.

Paxton said this is the largest privacy settlement an attorney general has ever obtained, "dwarfing the $390 million settlement a group of 40 states obtained in late 2022 from Google." This is also the first lawsuit and settlement under Texas's “Capture or Use of Biometric Identifier," which was signed into law in 2009 to help regulate the use of biometric data to identify people for commercial purposes, he added.

“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 the release. “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. Any abuse of Texans’ sensitive data will be met with the full force of the law.”

Meta will pay Texas the $1.4 billion over five years, Paxton's office said. A company spokesperson emailed a statement to USA TODAY on Tuesday saying, "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."

Why did Ken Paxton sue Meta?

Paxton sued Meta in February 2022 for "unlawfully capturing the biometric data of millions of Texans without obtaining their informed consent as required by Texas law," according to the release.

"Attorney General Paxton has prioritized holding major technology companies accountable, launching several historic initiatives including antitrust lawsuits and aggressive enforcement of privacy laws," his office said.

The lawsuit stems from a feature introduced in 2011 called "Tag Suggestions," which Meta claimed at the time would improve the user experience by making it easier for users to tag photographs with the names of the people in the photo, according to Paxton's office.

"Meta automatically turned this feature on for all Texans without explaining how the feature worked," according to the release. "Unbeknownst to most Texans, for more than a decade Meta ran facial recognition software on virtually every face contained in the photographs uploaded to Facebook, capturing records of the facial geometry of the people depicted."

"Meta did this despite knowing that CUBI forbids companies from capturing biometric identifiers of Texans, including records of face geometry, unless the business first informs the person and receives their consent to capture the biometric identifier."

What is biometric data?

The Department of Homeland Security defines biometrics as "unique physical characteristics, such as fingerprints, that can be used for automated recognition."

Biometric data can be used for commercial and criminal purposes. While retailers and companies may use the data to recommend products or send personalized emails and notifications, criminals could potentially use it to steal someone's identity or bank account information.

Meta is not the only company that has been sued for using people's biometrics, Amazon, Target and Snapchat have all been sued for collecting the data.

Other Meta lawsuits

Meta is a part of other lawsuits, including a $725 million settlement over claims the company allowed data to be accessible to third parties without users' consent. The company agreed to settle the class action lawsuit in December 2022.

Another lawsuit was filed in federal court by more than 40 states against Meta claiming the company's social media platforms, including Facebook and Instagram, harmed young people's mental health by addicting them.

The lawsuit claims the sites' algorithms "dispense dopamine," which it says is a "pleasure chemical" that induces young users to "engage repeatedly with its Platforms – much like a gambler at a slot machine."