Meta to Pay Texas $1.4 Billion to Settle Facial Recognition Lawsuit

Meta has agreed to pay $1.4 billion to Texas over five years following a lawsuit concerning the use of facial recognition software in its "Tag Suggestions" feature. The settlement resolves claims that Meta’s past practices violated Texas privacy laws, including the state’s Capture or Use of Biometric Identifier (CUBI) Act and Deceptive Trade Practices Act. This is prepared by SSP.

Texas Attorney General Ken Paxton initiated the lawsuit in 2022, alleging that Meta’s facial recognition technology, which automatically tagged photos of users without consent, infringed on millions of residents' privacy. "This is the largest settlement ever obtained from a single state action," Paxton remarked, emphasizing the importance of protecting citizens’ biometric data.

The contentious "Tag Suggestions" feature, introduced by Facebook in 2011, automatically identified persons in uploaded photos. Facebook did not make this feature opt-in until 2019, nearly a decade later, and finally shut it down in 2021. At the time, Meta’s Vice President of artificial intelligence, Jerome Pesenti, recognized the power of facial recognition but also acknowledged rising concerns over its use.

Despite reaching this settlement, Meta denied any wrongdoing. The lawsuit had initially sought substantial penalties that could have amounted to hundreds of billions of dollars. "We are pleased to resolve this matter and look forward to furthering our business investments in Texas," said Meta spokesperson Christopher Sgro.

The deal marks a significant precedent under the newly enforced CUBI regulations and underscores legal expectations for companies handling biometric information. Meta's first payment of $500 million is due within the next month, with the remaining amount to be disbursed over the following years. Additionally, the company is exploring future investments in Texas, potentially developing new data centers as part of its commitment.