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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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Apple Raises Worker Pay as Unions Gain Ground

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The company’s vice president of people and retail was caught trying to dissuade employees from unionizing in a leaked video.


Labor Squeezes Apple into Submission

Apple announced Wednesday that its U.S. corporate and retail employees will see a pay increase later this year, with starting wages bumped from $20 per hour to $22, though stores in certain regions may get more depending on market conditions.

Starting salaries are also expected to increase.

“Supporting and retaining the best team members in the world enables us to deliver the best, most innovative, products and services for our customers,” an Apple spokesman said in a statement. “This year as part of our annual performance review process, we’re increasing our overall compensation budget.”

Some workers were told their annual reviews would be moved up three months and that their pay increases would take effect in early July, according to a memo reviewed by The Wall Street Journal. Furthermore, they were told the increased compensation budget would be in addition to pay increases and special awards already received within the past year.

Feeling squeezed by low unemployment and high inflation, tech companies like Google, Amazon, and Microsoft have changed their compensation structures in recent weeks to pay workers more, and Apple is the latest to bend to market pressure.

Unions Gaining Traction

On Wednesday, The Verge received a leaked video of Apple’s vice president of people and retail, Deirdre O’Brien, explicitly dissuading employees from unionizing.

“I worry about what it would mean to put another organization in the middle of our relationship,” she said. “An organization that does not have a deep understanding of Apple or our business. And most importantly one that I do not believe shares our commitment to you.”

She vocalized more anti-union talking points, like the idea that the company will not be able to make important decisions as quickly with a collective bargaining agreement.

O’Brien has been personally visiting retail stores over the past few weeks in an apparent bid to combat budding union activity.

Apple stores in three locations — New York, Georgia, and Maryland — are currently pushing to unionize, with the latter two set to vote in elections on June 2 and 15, respectively. In response to these efforts, Apple has hired anti-union lawyers, given managers anti-union scripts, and held anti-union captive audience meetings.

In the United States, unionized workers make about 13.2% more than non-unionized workers in the same sector, according to the Economic Policy Institute.

As of Wednesday, Apple’s shares had fallen 21% since the start of the year, but sales grew 34% last year to almost $300 billion.

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

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Employees at Activision Blizzard’s Raven Software Form First Union at a Major Gaming Company

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Organizers say the decision has the potential to upend labor practices in the gaming industry.


Raven Software QA Testers Win Union Bid

A group of 28 workers at Activision Blizzard subsidiary Raven Software voted to form the first-ever union at a major U.S. gaming company. 

While the Game Workers Alliance is a small union, organizers in the space say its formation represents a major shift for the gaming industry and will encourage others in the sector to follow suit.

The newly unionized workers are quality insurance (QA) testers working at the Wisconsin-based studio to develop “Call of Duty.” QA testers work to sort out any glitches in games, and the jobs are notoriously known for extreme crunch periods where staffers work long stretches of hours before a game’s release.

During crunch periods, employees are regularly given 12- to 14-hour shifts with just a few days off each month in order to meet release deadlines.

Many QA testers have said they are treated as second-class to others in the industry. They are paid much lower — often minimum wage or close to it — work on contract cycles and, as a result, feel disposable.

That particular sentiment was underscored for workers at Raven Software in December when the company ended the contracts of about a dozen QA testers. The decision prompted the remaining QA testers to hold a walkout and, shortly after that, they began organizing to form a union, which they dubbed the Game Workers Alliance.

Activision’s Battle Against Unionization Effort

Activision did not support the push for unionization and actively fought against it. The company refused to voluntarily recognize the union, and just days after the group filed a petition with the National Labor Relations Board, it moved QA testers to different departments across its properties.

Activision also announced it would convert over 1,000 temporary QA workers to full-time employees, give them a pay raise to $20 an hour, and provide more benefits. However, management said the move would not apply to the unionizing workers because, under federal law, they could not try to encourage workers from voting against unionization by offering pay hikes or benefits. Union leaders repudiated that argument.

Additionally, Activision fought against the union petition, arguing that any union would need to include all of the studio’s employees, but the Labor Board rejected the claim and let the effort proceed.

According to multiple reports, Activision management continued to push against the union in the weeks leading up to the vote. Some Raven employees told The Washington Post company leaders had suggested at a town hall meeting that unionization could hurt game development and impact promotions and benefits. The following day, the managers allegedly sent an email urging workers to “vote no.” 

On Monday, Labor Board prosecutors announced they had determined that Activision illegally threatened workers and enforced a social media policy that violated bargaining rights. Activision denied the new allegations.

The two parties will have until the end of the month to file an objection, and if none are filed, the union becomes official. It is currently unclear how Activision and Raven will respond, but they have signaled that they might not make the transition period easy for the union.

According to internal documents seen by Bloomberg, the company has repeatedly mentioned that it can take a while for a union to negotiate its first contract.

In a statement following the vote, an Activision spokesperson told The Post that the company respects the right of its employees to vote for or against a union, but added: “We believe that an important decision that will impact the entire Raven Software studio of roughly 350 people should not be made by 19 of Raven employees. We’re committed to doing what’s best for the studio and our employees.”

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

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Uber Forks Over $19 Million in Fine for Misleading Australian Riders

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The penalty is just the latest in a string of lawsuits going back years.


Uber Gets Fined

Uber has agreed to pay a $19 million fine after being sued by the Australian Competition and Consumer Commission for making false or misleading statements in its app.

The first offense stems from a company policy that allows users to cancel their ride at no cost up to five minutes after the driver has accepted the trip. Despite the terms, between at least December 2017 and September 2021, over two million Australians who wanted to cancel their ride were nevertheless warned that they may be charged a small fee for doing so.

Uber said in a statement that almost all of those users decided to cancel their trips despite the warnings.

The cancellation message has since been changed to: “You won’t be charged a cancellation fee.”

The second offense, occurring between June 2018 and August 2020, involved the company showing customers in Sydney inflated estimates of taxi fares on the app.

The commission said that Uber did not ensure the algorithm used to calculate the prices was accurate, leading to actual fares almost always being higher than estimated ones.

The taxi fare feature was removed in August 2020.

A Troubled Legal History

Uber has been sued for misleading its users or unfairly charging customers in the past.

In 2016, the company paid California-based prosecutors up to $25 million for misleading riders about the safety of its service.

An investigation at the time found that at least 25 of Uber’s approved drivers had serious criminal convictions including identity theft, burglary, child sex offenses and even one murder charge, despite background checks.

In 2017, the company also settled a lawsuit by the Federal Trade Commission (FTC) for $20 million after it misled drivers about how much money they could earn.

In November 2021, the Justice Department sued the company for allegedly charging disabled customers a wait-time fee even though they needed more time to get in the car, then refused to refund them.

Later the same month, a class-action lawsuit in New York alleged that Uber charged riders a final price higher than the upfront price listed when they ordered the ride.

See what others are saying: (ABC) (NASDAQ) (Los Angeles Times)

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