Millions of Facebook Users Pass on $650 Million Privacy Jackpot
The website home screen for Facebook is displayed on a smartphone in New Jersey, U.S. (Photographer: Gabby Jones/Bloomberg)

Millions of Facebook Users Pass on $650 Million Privacy Jackpot

Facebook Inc. will be making payouts to only about a quarter of the 6 million Illinois residents eligible for the biggest consumer privacy settlement in U.S. history.

Based on a tally filed in court after Monday’s claims deadline, some 1.57 million people will probably pocket more than $300 each -- after about a third of the $650 million settlement fund is set aside for their attorneys and administrative costs -- from a lawsuit in which the social network was accused of collecting biometric images from its photo-tagging feature without consent.

As class actions go, with nickel-and-dime payouts often not worth the effort of filing a claim, a case that ends up with a 25% buy-in from consumers is a success story. Frequently, fewer than 10% of eligible people file claims.

In Facebook’s case, the judge was initially skeptical if a settlement of less than $1 billion was fair, considering that if users had taken the company to trial they could have sought damages of as much as $5,000 for each violation of the Illinois Biometric Privacy Information Act.

To get U.S. District Judge James Donato on board, the company and the lawyers for consumers added an extra $100 million to what was originally a $550 million accord, and they promised an extra-aggressive outreach effort, which included pinging Facebook users directly through their accounts to alert them to the cash jackpot. Final approval of the deal is scheduled for early in 2021.

©2020 Bloomberg L.P.

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