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Facebook agrees to pay $550m settlement in facial recognition case

By Yana Berman

Lawsuit claimed that the site illegally collected and stored biometric data

AP Photo/Andrew Harnik AP Photo/Andrew Harnik

Facebook has agreed to pay a $550m (£423m, €499m) settlement in a facial recognition lawsuit that accused the company of illegally collecting biometric data

The claim against Facebook was initially filed in 2015. Illinois users accused the social media of violating the Biometric Information Privacy Act.

The lawsuit claimed that the biometric data was collected via Facebook's feature called “Tag Suggestions”, that allows users to tag their friends on previously uploaded pictures. The algorithm uses facial recognition to compare the images.

According to Reuters, law companies that represent the plaintiffs will now ask the court to give preliminary approval for the settlement.

The total amount that Facebook agreed to pay adds another stroke to the list of settlements the company has been forced to make in recent years. The quarterly report of the company shows that these notable fines have affected the company's business.

The report shows the company announced higher expenses in Q4 - a surge to $12bn. Increased costs were attributed to higher research and development spending.

The revenue of $21bn exceeded the analysts' expectations ($20.89bn). The average revenue per user was also higher than the initial prediction ($8.52 against the $8.38 forecast).

However, considerable revenue did not prevent Facebook stock from falling. Its shares nosedived 7 per cent to $208.5 in pre-market trading.

FURTHER READING: Facebook sued for anti-competitive conduct

FURTHER READING: Facebook share price forecast 2020 and beyond

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