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Facebook to Pay $550 Million to Settle Facial Recognition Suit

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  • Facebook agreed to pay $550 million to settle a class-action lawsuit in Illinois that claimed its “Tag Suggestions” feature illegally harvested facial data from millions of users in Illinois without their permission.
  • Facebook disclosed the settlement while also announcing it made $21 billion last quarter.
  • Some championed the settlement as a victory for consumer privacy rights.
  • Others argued that no matter how much Facebook pays in lawsuits and settlements, the company has continued to grow and has not fundamentally changed its business practices.

Facebook Announces Settlement

Facebook announced Wednesday that it had agreed to pay $550 million to settle a class-action lawsuit involving facial recognition technology.

The lawsuit was filed in Illinois in 2015 and claimed that Facebook’s “Tag Suggestions” feature violated the state’s 2008 Biometric Information Privacy Act (BIPA).

The “Tag Suggestion” tool uses facial recognition software to scan users’ faces and then suggest the names of other users who might be in the picture. 

The lawsuit alleged that Facebook used it to illegally harvest facial data from millions of users in Illinois without their permission or without telling them how the data was kept.

Illinois is one of three states that has its own biometric privacy laws, and BIPA is arguably the strongest of all three. 

Under BIPA, companies that collect biometric data, which includes data from finger, face, and iris scans, must get prior consent from consumers and detail how the data will be used and how long the company will keep it. BIPA also allows private citizens to sue.

The lawsuit accused Facebook of failing to comply with those restrictions. 

Facebook, for its part, argued that the people who it collected data from without consent could not prove that they experienced any concrete harm, like financial losses. However, the company still ultimately decided to settle.

Once the federal judge overseeing the case approves the settlement, people eligible to claim money are expected to receive a couple hundred dollars.

Other Settlements & Controversies

Many privacy experts and advocates applauded the settlement and said it was a victory for consumer privacy rights.

But others argued that the settlement does not really change anything, because it is not a big deal for Facebook. While $550 million might seem like a lot, for Facebook, its basically pocket change.

Even the way Facebook announced the settlement seemed to emphasize that point. The tech giant disclosed the settlement while announcing its financial results for 2019, reporting that revenue rose 25% to $21 billion in the last quarter alone.

Not only did that indicate how minor the Illinois settlement was for the company financially, it also showcased their incredible ability to weather scandals and controversy.

Over the last few years, Facebook has received a lot of backlash, largely over privacy concerns and the spread of misinformation on the platform.

Most recently Facebook has been under fire for its decision to essentially let politicians lie in political ads.

In July, the Federal Trade Commission (FTC) fined Facebook $5 billion over privacy violations— the largest fine the FTC has ever imposed on a tech company by far.

Facebook’s Continued Growth

But even in the face of massive financial costs and prominent controversies, Facebook still continues to grow.

In an article published by Axios, writer Sara Fischer described Facebook’s ability for continued growth despite those obstacles.

“Facebook closed out the second decade of the millennium stronger than ever,” she wrote. “Facebook’s continued ability to post double-digit revenue growth every year speaks to how well it has been able to innovate and adapt, even in the face of regulatory headwinds and increased competition.”

Fischer gave the example of North America and Europe where Facebook has gotten more money per user each year despite the fact that its user growth in those regions has stayed relatively stagnant.

Source: Axios

She also mentioned the Illinois case, FTC fine, and other growing concerns over privacy and advertizing Facebook has warned its investors about.

“So far these fines have proven moot in getting the tech giant to fundamentally change its business, which continues to grow substantially,” she said.

While Facebook did agree to be more transparent about how it uses facial recognition technology as part of the FTC settlement, many are skeptical that the Illinois case will bring about any substantive change.

However, in an investor call following the release of Facebook’s earnings report Wednesday, CEO and founder Mark Zuckerberg said that he wanted to be more transparent about the company’s values.

“One critique of our approach for much of the last decade is that because we wanted to be liked, we didn’t want to communicate our views as clearly, because we worried about offending people,” he said.

“Our goal for the next decade isn’t to be liked, but understood. In order to be trusted, people need to know what we stand for.”

See what others are saying: (Axios) (The Verge) (The New York Times)

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Key Takeaways From the Explosive “Facebook Papers”

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Among the most startling revelations, The Washington Post reported that CEO Mark Zuckerberg personally agreed to silence dissident users in Vietnam after the country’s ruling Communist Party threatened to block access to Facebook.


“The Facebook Papers” 

A coalition of 17 major news organizations published a series of articles known as “The Facebook Papers” on Monday in what some are now calling Facebook’s biggest crisis ever. 

The papers are a collection of thousands of redacted internal documents that were originally turned over to the U.S. Securities and Exchanges Commission by former product manager Francis Haugen earlier this year. 

The outlets that published pieces Monday reportedly first obtained the documents at the beginning of October and spent weeks sifting through their contents. Below is a breakdown of many of their findings.

Facebook Is Hemorrhaging Teens 

Both Bloomberg and The Verge reported that Facebook is struggling to retain its hold over teens.  

For example, The Verge said the internal documents it reviewed showed that since 2019, teen users on Facebook’s app have fallen by 13%, with the company expecting another staggering falloff of 45% over the next two years. Meanwhile, the company reportedly expects its app usage among 20- to 30-year-olds to decline by 4% in the same timeframe.

Facebook also found that fewer teens are signing up for new accounts. Similarly, the age group is moving away from using Facebook Messenger.

In an internal presentation, Facebook data scientists directly told executives that the “aging up issue is real”  and warned that if the app’s average age continues to increase as it’s doing right now, it could disengage younger users “even more.”

“Most young adults perceive Facebook as a place for people in their 40s and 50s,” they explained. “Young adults perceive content as boring, misleading, and negative. They often have to get past irrelevant content to get to what matters.” 

The researcher added that users under 18 additionally seem to be migrating from the platform because of concerns related to privacy and its impact on their wellbeing.

Facebook Opted Not To Remove “Like” and “Share” Buttons

In its article, The New York Times cited documents that indicated Facebook wrestled with whether or not it should remove the “like” and “share” buttons.

The original argument behind getting rid of the buttons was multi-faceted. There was a belief that their removal could decrease the anxiety teens feel since social media pressures many to want to achieve a certain number of likes per post. There was also the hope that a decrease in this pressure could lead to teens posting more. Away from that, Facebook additionally needed to tackle growing concerns about the lightning-quick spread of misinformation.

Ultimately, its hypotheses failed. According to the documents reviewed by The Times, hiding the “like” button didn’t alleviate the social anxiety teens feel. It also didn’t lead them to post more. 

In fact, it actually led to users engaging with posts and ads less, and as a result, Facebook decided to keep the buttons. 

Despite that, in 2019, researchers for Facebook still asserted that the platform’s “core product mechanics” were allowing misinformation and hate to flourish.

“The mechanics of our platform are not neutral,” they said in the internal documents.

Facebook Isn’t Really Regulating International Hate

The Atlantic, WIRED, and The Associated Press all reported that terrorist content and hate speech continue to spread with ease on Facebook.

That’s largely because Facebook does not employ a significant number of moderators who speak the languages of many countries where the platform is popular. As a result, its current moderators are widely unable to understand cultural contexts. 

Theoretically, Facebook could solidify an AI-driven solution to catching harmful content spreading among different languages, but it still hasn’t been able to perfect that technology. 

“The root problem is that the platform was never built with the intention it would one day mediate the political speech of everyone in the world,” Eliza Campbell, director of the Middle East Institute’s Cyber Program, told the AP. “But for the amount of political importance and resources that Facebook has, moderation is a bafflingly under-resourced project.”

According to The Atlantic, as little as 6% of Arabic-language hate content on Instagram was detected by Facebook’s systems as recently as late last year. Another document detailed by the outlet found that “of material posted in Afghanistan that was classified as hate speech within a 30-day range, only 0.23 percent was taken down automatically by Facebook’s tools.”

According to The Atlantic, “employees blamed company leadership for insufficient investment” in both instances.

Facebook Was Lackluster on Human Trafficking Crackdowns Until Revenue Threats

In another major revelation, The Atlantic reported that these documents appear to confirm that the company only took strong action against human trafficking after Apple threatened to pull Facebook and Instagram from its App Store. 

Initially, the outlet said employees participated in a concerted and successful effort to identify and remove sex trafficking-related content; however, the company did not disable or take down associated profiles. 

Because of that, the BBC in 2019 later uncovered a broad network of human traffickers operating an active ring on the platform. In response, Facebook took some additional action, but according to the internal documents, “domestic servitude content remained on the platform.”

Later in 2019, Apple finally issued its threat. After reviewing the documents, The Atlantic said that threat alone — and not any new information — is what finally motivated Facebook to “[kick it] into high gear.” 

“Was this issue known to Facebook before BBC enquiry and Apple escalation? Yes,” one internal message reportedly reads. 

Zuckerberg Personally Made Vietnam Decision

According to The Washington Post, CEO Mark Zuckerberg personally called a decision last year to have Facebook agree to demands set forth by Vietnam’s ruling Communist Party.

The party had previously threatened to disconnect Facebook in the country if it didn’t silence anti-government posts.

“In America, the tech CEO is a champion of free speech, reluctant to remove even malicious and misleading content from the platform,” the article’s authors wrote. “But in Vietnam, upholding the free speech rights of people who question government leaders could have come with a significant cost in a country where the social network earns more than $1 billion in annual revenue.” 

“Zuckerberg’s role in the Vietnam decision, which has not been previously reported, exemplifies his relentless determination to ensure Facebook’s dominance, sometimes at the expense of his stated values,” they added.

In the coming days and weeks, there will likely be more questions regarding Zuckerberg’s role in the decision, as well as inquiries into whether the SEC will take action against him directly. 

Still, Facebook has already started defending its reasoning for making the decision. It told The Post that the choice to censor was justified “to ensure our services remain available for millions of people who rely on them every day.”

In the U.S., Zuckerberg has repeatedly claimed to champion free speech while testifying before lawmakers.

Other Revelations

Among other findings, the Financial Times reported that Facebook employees urged management not to exempt notable figures such as politicians and celebrities from moderation rules. 

Meanwhile, reports from Politico, CNN, NBC, and a host of other outlets cover documents related to Facebook’s market dominance, how much it downplayed its role in the insurrection, and more.  

Outside of these documents, similar to Haugen, another whistleblower submitted an affidavit to the SEC on Friday alleging that Facebook allows hate to go unchecked.

As the documents leaked, Haugen spent Monday testifying before a committee of British Parliament.

See what others are saying: (Business Insider) (Axios) (Protocol)

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NFL Reaches Agreement to End Race-Norming, New Testing Formula Remains Unclear

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The practice, which was adopted by the league in the ’90s, assumes that Black players operate with a lower cognitive function than players of other races. 


NFL Ends Race-Norming

The U.S. District Court of Philadelphia uploaded a confidential proposed settlement between the NFL and former players on Wednesday that confirms the league’s plans to abolish race norming. 

The NFL previously halted the use of race-norming in June as part of a$1 billion settlement with retirees Kevin Henry and Najeh Davenport, but details of the deal weren’t supposed to be released until it underwent review from a federal judge. 

In fact, it currently seems as if someone in the court accidentally uploaded the document, as it was deleted hours later. 

Among the details reaped from the settlement, it was revealed that the league plans to modify cognitive tests over the next year as part of a short-term change regarding how it verifies dementia-related brain injury claims. Previously, it used race-norming — the practice of assuming Black players have a lower cognitive function than players of other races — to test whether retirees seeking financial compensation had sustained brain injuries from the sport. 

Black retirees who were denied access to compensation originally will also have their tests automatically re-evaluated over the course of the next year, if the settlement pushes through. 

The NFL has additionally agreed to develop a long-term replacement system with the help of experts and players’ lawyers.

Still, the exact formula behind these new testing metrics, which will be designed as race-neutral per the agreement, is unknown. For example, retirees don’t know how the new changes will affect their scores or if they might potentially need to take additional tests before becoming eligible for compensation.

The Issue With Race-Norming

Race-norming was first adopted by the league back in the ’90s, and in theory, it was meant to help offer better treatment to Black retirees who had developed dementia from brain injuries related to football.

Essentially, the thought process was to take socioeconomic factors into account since Black people come from disadvantaged communities at higher rates; however, that quickly became a major issue since Black players were held to a higher standard of proof than players of other races. 

For example, since the tests assumed Black people have less cognitive skill, Black retirees seeking claims needed to score lower to be granted compensation. That then led to many having their claims denied because they tested too high — even if they would have tested within the range to receive compensation had they been white. 

See what others are saying: (Associated Press) (The Washington Post) (ABC News)

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Facebook Plans Name Change as Part of Rebrand

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News of the alleged rebrand came the same day Facebook was fined nearly $70 million for breaching U.K. orders related to the company’s 2020 acquisition of Giphy, as well as the same day it reached a $14 million discrimination settlement with the U.S. Justice Department.


Facebook Allegedly Plans To Debut New Name

Facebook, Inc. is planning to announce a new company name next week, according to a Tuesday report from The Verge. 

The rebrand would reportedly align with CEO Mark Zuckerberg’s vision to shape the company into a full-fledged “metaverse” — AKA a virtual reality space where users can interact with one another in real-time. 

The new name is currently unknown, but it would likely not affect the social media platform Facebook. Instead, the change would target its parent company, Facebook, Inc. — similar to how Alphabet became the parent company of Google following a 2015 restructure. 

On Monday, Facebook said it is currently planning to hire 10,000 people in the European Union to help make its metaverse goal a reality. 

Still, plans for the metaverse have not gone uncriticized, especially given the recent weeks of increased scrutiny regarding Facebook’s dominance over people’s daily lives. “Metaverse” was first coined in 1992 by American author Neal Stephenson in his novel “Snow Crash,” which depicts a corporate-owned virtual world.

Twitter CEO Jack Dorsey even cited one user who referenced the novel, agreeing that Stephenson was right in his prediction of “a dystopian corporate dictatorship.”

Facebook To Pay Fine and Settlement

Also on Tuesday, regulators in the United Kingdom fined Facebook nearly $70 million for breaching orders related to its 2020 acquisition of Giphy. 

While that’s only a fraction of the $400 million it paid to purchase Giphy, UK regulators warned that they could eventually order Facebook to sell off Giphy if they find proof the acquisition has damaged competition.

In the U.S., the Justice Department said the same day that Facebook has agreed to pay up to $14.25 million to settle discrimination allegations brought by the agency under the Trump administration. 

In December, the department accused the company of favoring foreign workers with temporary work visas over what it described as thousands of qualified U.S. workers. 

“Facebook is not above the law and must comply with our nation’s federal civil rights laws, which prohibit discriminatory recruitment and hiring practices,” Kristen Clarke, an assistant attorney general at the department, said. 

Notably, this settlement is the largest ever collected by the department’s Civil Rights Division.

See what others are saying: (The Verge) (Engadget) (The New York Times)

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