- In one of the largest consumer privacy settlements in US history, Facebook has agreed to pay $550 million to settle a lawsuit that claimed it collected user biometric data without consent
- The world’s biggest social-media company reported record fourth-quarter revenue of $21.1 billion
Facebook Inc. will pay $500 million to resolve claims it collected user biometric data without consent in one of the largest consumer privacy settlements in US history, according to a statement Wednesday by lawyers for consumers
The accord, which requires a judge’s approval, will avert a trial that may have exposed the social networking company to billions of dollars in damages. Facebook fought unsuccessfully to persuade the US Supreme Court to derail the class action case. The users alleged that the company’s photo-scanning technology violated an Illinois law by gathering and storing biometric data without their permission.
The world’s biggest social-media company reported record fourth-quarter revenue of $21.1 billion, boosted by ads on Instagram and in video. The 25% increase from the period a year earlier was the slowest-ever quarterly sales growth for Facebook, though it topped analysts’ average estimate of $20.9 billion. Shares fell about 7% on the news.
Facebook said it had 2.89 billion monthly active users of its products around the world, but growth stagnated in the US and Canada on the main social network — the primary source of advertising sales. Monthly active users hit 2.5 billion on the main network as of Dec. 31, slightly topping analysts’ estimate of 2.49 billion.
Facebook has warned for several quarters that growing at the same rate will be more difficult in the future. The company’s trajectory is limited by the number of world internet users, most of whom already have an account on Facebook or its WhatsApp, Instagram and Messenger properties. That means finding future revenue streams will be increasingly difficult, requiring experimentation with avenues that might not pay off, such as in artificial intelligence, virtual reality and shopping.
What Facebook “has to grapple with is a rising cost framework while each incremental dollar of revenue growth gets tougher,” said James Cakmak, a partner at Clockwise Capital.
Expenses rose 34% to $12.2 billion the period ended Dec. 31, the Menlo Park, California-based company said Wednesday in a statement.