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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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Hundreds of Businesses and Celebrities Join Growing Fight Against Restrictive Voting Efforts

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  • In a letter published Wednesday, hundreds of major companies, law firms, corporate leaders, and celebrities banded together “to oppose any discriminatory legislation or measures that restrict or prevent any eligible voter from having an equal and fair opportunity to cast a ballot.”
  • The list of signatories includes companies like Facebook, Twitter, and Amazon; celebrities such as Demi Lovato, Katy Perry, and Samuel L. Jackson; and billionaire investor Warren Buffet, among others.
  • Though the letter does not address any specific voting legislation, it was organized by Kenneth Chenault and Kenneth Fraizer, who also organized a letter late last month in which more than 70 Black executives urged companies to take a stand against GOP-led restrictive voting proposals being floated in dozens of states. 

Hundreds of Companies Oppose Restrictive Voting 

The number of companies speaking out against a series of GOP-led voting proposals is growing, despite calls from notable Republicans for boycotts against companies doing so.

In a letter published Wednesday morning, hundreds of major companies, law firms, corporate leaders, and celebrities united behind what journalist David Gelles described as “the biggest show of solidarity to date.”

The letter itself doesn’t specifically call out Republican voting efforts. Instead, the statement reads, “We stand for democracy,” with the signatories also vowing “to oppose any discriminatory legislation or measures that restrict or prevent any eligible voter from having an equal and fair opportunity to cast a ballot.”

Still, the letter comes in the middle of an ongoing battle between corporate America and the GOP, which is backing dozens of state proposals that many have condemned as restrictive and discriminatory against poorer individuals and people of color.

The slew of companies that signed Wednesday’s letter includes Target, Netflix, Bank of America, Facebook, Twitter, Microsoft, Starbucks, Amazon, Mastercard, American Airlines, United Airlines, and others. 

The letter also boasts star-power from celebrities like Demi Lovato, Katy Perry, Gwyneth Paltrow, George Clooney, and Samuel L. Jackson, among others. Notably, billionaire investor Warren Buffet also added his name to this list.

Companies Debate Taking Action Against States That Pass Restrictive Voting Measures

Wednesday’s letter was organized by Kenneth Chenault and Kenneth Frazier, who late last month also organized a similar letter from a group of more than 70 Black executives. That message, which urged companies to speak out against the GOP-led proposals, has largely been credited with helping to catalyze the fight between the GOP and corporate America. 

This past weekend, the two also partially led a Zoom call that featured over 120 CEOs and business leaders. 

During that call, participating executives considered a number of possible steps, including pulling donations to politicians who support restrictive voting measures, refusing to move business or jobs to states that pass such laws, and even relocating events; however, no hard plans were actually set into motion.

Still, some groups have already gone forward with various forms of protests against such laws. Last week, Major League Baseball announced it was moving its All-Star game out of Georgia, which recently passed a series of restrictive voting measures. On Monday, actor Will Smith and director Antoine Fuqua also announced that they no longer plan to film their runaway slave thriller “Emancipation” in the state.

Some Companies Didn’t Speak Out in Wednesday’s Letter

Both federal and state Republicans have been very vocal as businesses have continued to lob criticism at their proposed laws. 

Last week, Senate Minority Leader Mitch McConnell warned businesses to “stay out of politics,” though he later walked back that statement.

Two weeks ago, the Georgia state House voted to strip Delta Airlines of its tax breaks after the company spoke out against the state’s new voting laws. In fact, that reprimand might explain why it and other Georgia-based companies like Coca-Cola were absent from Wednesday’s letter. 

According to The New York Times, people involved in the process of organizing this letter said those companies feared more blowback and also did not feel the need to speak up again.

Connected to that, The Times reported that some companies originally tried to have the line of “oppos[ing] any discriminatory legislation” removed, but they later signed anyway after Chenault and Frazier insisted the line was crucial.

See what others are saying: (The New York Times) (The Washington Post) (The Hollywood Reporter)

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Nike To Clean and Resell Used Sneakers at a Discounted Price

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  • At least 15 Nike retail locations in the U.S. are participating in a new program the company calls “Nike Refurbish,” which is aimed at reducing waste.
  • As part of it, Nike will restore shoes with manufacturing flaws, as well as donated or returned shoes, and resell them at a discounted price.
  • Shoes at the end of their wear will be recycled into Nike Grind materials that are used to construct running tracks, gym floors, playgrounds, other Nike products, and more.

Nike Refurbish

Nike announced a new program on Monday called “Nike Refurbish” that will help boost sustainability and reduce waste.

As part of the program, the brand will take donated and returned shoes that are like new or gently used, as well as shoes with cosmetic manufacturing flaws, then clean and restore them to resell at a discounted price. Returned shoes must have been brought back within Nike’s 60-day return period in order for them to be resold. 

Nike employee restoring an eligible pair of sneakers. Source: Nike

All the refurbished shoes will have labeling on the box with information about their condition grade. Plus, they are also covered under Nike’s 60-day return policy. 

Nike Refurbished Footwear Sustainability Initiative | Well+Good
Source: Nike

Nike’s Recycling Efforts

Nike didn’t say what it previously did with returned sneakers in its announcement, but the new plan is part of its wider attempts to recycle materials.

On its website, it markets the initiative as a way for customers to “help keep shoes out of landfills.” and join Nike’s efforts towards, “Zero carbon and zero waste to help protect the future of sport.” 

Shoes that are truly at the end of their wear will be recycled into Nike Grind materials that are then used for tons of other projects, including running tracks, gym floors, playgrounds, outdoor courts, as well as other Nike apparel and footwear.

Nike Grind | Nike Purpose
Nike Grind material that was used to create an outdoor track. Source: Nike

So far, 15 Nike retail locations across the U.S. are confirmed to be participating in this model, but there are plans in place to expand this list over the course of 2021.

See what others are saying: (FOX Business) (Footwear News) (Miami Herald)

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Uber Sees Record Ride Demand But Doesn’t Have Enough Drivers Available

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  • Demand for Ubers outpaced driver availability in March, according to a Monday statement from Uber.
  • On top of seeing its best-performing month since the beginning of pandemic closures, the company also received more bookings last month than any other month in its entire history.
  • In an attempt to attract more drivers, Uber announced a $250 million, one-time stimulus payment last week to “boost” driver earnings.
  • While Uber said it believes it will turn a profit for 2021, the company could be set back more than $500 million because of a U.K. Supreme Court ruling that gives the country’s drivers minimum wage, holiday pay, and pension.

Uber Posts Record-Setting Growth

Uber announced Monday that its ride requests for the month of March were the highest it has ever recorded in its 12-year history. 

According to a filing with the SEC, last month, the company crossed “a $30 billion annualized Gross Bookings run-rate.” Alongside that, average daily Gross Bookings grew 9% from the previous month. 

Notably, this also marked the company’s best month since March of last year, when pandemic closures began in the U.S.

On top of that, Uber said its delivery business crossed “a $52 billion annualized Gross Bookings run-rate in March, growing more than 150% year-over-year.”

In fact, that demand over the past month was so high that Uber didn’t have enough drivers to meet it.

As vaccination rates increase in the United States, we are observing that consumer demand for Mobility is recovering faster than driver availability, and consumer demand for Delivery continues to exceed courier availability,” the company said.

$250 Million Driver Stimulus

Monday’s filing is in line with another announcement from Uber, which said last week that it is opening up a $250 million driver stimulus to “boost” earnings for drivers. 

“In 2021, there are more riders requesting trips than there are drivers available to give them—making it a great time to be a driver,” the company said at the time. “We want drivers to take advantage of higher earnings now because this is likely a temporary situation.”

“As the recovery continues, we expect more drivers will be hitting the road, which means that over time earnings will come back to pre-Covid levels.”

Can Uber Become Profitable?

In February, Uber reported $6.8 billion in losses for 2020, and for years, many have questioned if its business model is even profitable at all; however, in this latest filing, Uber said it believes it’ll become profitable by the end of 2021.

That said, last month, the Supreme Court of the United Kingdom handed drivers a major win by ruling that they need to be reclassified as “workers,” guaranteeing them minimum wage, holiday pay, and pension. 

While big news, the U.K. classifies “workers” and “employees” separately. As a result, U.K. drivers still aren’t granted full benefits. 

The decision will also likely be a setback for Uber, as Bank of America has estimated that it could cost the company more than $500 million. 

Uber’s Vaccine Access Fund

In other Uber news, the company — along with PayPal and Walgreens — has launched a “Vaccine Access Fund.”

Through that fund, customers can donate money that will be used to help people who normally lack transportation get to their vaccination appointment.

Notably, all three companies have said they’ll donate a joint $11 million. 

That’s on top of the $5 million PayPal previously donated, as well as the 10 million free and discounted rides Uber promised to give in December. 

Uber users are able to donate in-app, and PayPal has launched a donation page on its website.

See what others are saying: (The Wall Street Journal) (CNBC) (CNET)

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