Tech giant Meta has agreed to pay a $1.4 billion fine to the state of Texas to settle a lawsuit filed by the state prosecutor’s office. The lawsuit accused Meta of unauthorized use of Facebook account holders’ biometric data.
This settlement marks a significant milestone, as it is the largest of its kind between a US state and a tech company. Meta will disburse the payment in installments over the next five years.
Texas Attorney General Ken Paxton hailed the settlement as “historic,” declaring it a “reflection of his commitment to holding accountable the world’s largest companies for violating state law.”
Lawsuit filed in 2022 took two years to settle in Texas
The original lawsuit which has now been settled was submitted by the state of Texas. State prosecutors alleged that Meta was illegally compiling user data from Facebook users without their consent, and the company was therefore in violation of state law.
Specifically, prosecutors determined that Meta misused the “suggested tags” feature on Facebook photos to gather biometric information. This data was then employed to enhance the platform’s targeted advertising system.
Texas law, enacted in 2009, mandates that companies secure user consent before collecting biometric information. The substantial fine imposed on Meta underscores the company’s disregard for this legal requirement.
In recent times, Mark Zuckerberg’s company has faced intense scrutiny over its data practices, resulting in additional lawsuits from other states.
33 states filed a lawsuit against Meta
Precisely 33 state attorney generals filed a lawsuit against Meta on October 24, 2023 in a San Francisco federal court. This lawsuit includes the states of California, Colorado, New York, Arizona, and Illinois.
The states allege that Facebook and Instagram, both owned by Meta, are designed to be addictive and harm children’s mental health. Additionally, they claim Meta violated federal and state consumer protection laws.
Moreover, they argue that by making its products deliberately addictive and lying about their effects on children’s mental health, Meta disregarded federal children’s online privacy law and state consumer protection laws.
If the lawsuit concludes in their favor, states could force Meta into changing the way they design their platforms, much like the EU has done with video game companies such as EA.
The suit could also lead to hefty fines for Meta, such as the one just settled in Texas. The legal strategy used by states for this case has drawn comparisons with that used against tobacco conglomerates in the 1990s.
The strategy proved to be successful given that it changed how the industry operated. It introduced black labels on cigarette boxes and led to billions of dollars in fines for tobacco corporations.
