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SNAP Reaches $35M Settlement in Illinois Privacy Lawsuit
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Snap Inc. (SNAP - Free Report) recently reached a $35 million settlement agreement with the State of Illinois in a class-action lawsuit over its use of facial recognition technology to collect user data illegally, per a Chicago Tribune report.
The lawsuit claimed that Snapchat's filters and lenses violated the state's Biometric Information Privacy Act (BIPA) by storing biometric data without the consent of the users. The state law requires companies to inform people in writing the purpose of biometric data collection and how long it will be kept.
The law is unique in that it allows private citizens to sue companies that may have violated the law. Illinois residents who resided in the state after Nov 17, 2015 and used Snapchat’s popular AR features may be eligible for a cut of the settlement, which can vary between $58 and $117.
Snapchat has argued that lenses do not collect biometric data that can be used to identify a specific person or engage in facial identification. Snapchat had issued an in-app consent notice to Illinois residents earlier this year out of caution.
Snap is the latest company, which follows other tech giants, including Meta Platforms (META - Free Report) and Alphabet (GOOGL - Free Report) -owned Google, to get penalized under BIPA. In June, Google agreed to pay $100 million to settle a class action lawsuit in Illinois over a facial recognition feature in Google Photos. The lawsuit alleged that the company violated BIPA through Google Photos’ “Face Grouping” feature.
In 2021, Facebook agreed to pay $650 million to settle a similar BIPA class action lawsuit over its facial tagging feature. This spring, some Illinois Facebook users received checks for nearly $400 from the same.
In May, Meta removed some augmented reality features — such as avatars and filters — from Facebook and Instagram in Illinois. Meta reached a $37.5 million settlement this week, in which the tech giant is accused of violating California law and user privacy through location tracking. Facebook users alleged that the company used their IP addresses to target ads even after users disabled location services,
Meanwhile, a federal judge in Illinois on Tuesday approved a $92 million class-action lawsuit settlement between the Chinese short-form video app TikTok and users of the platform. The lawsuit was filed over claims that TikTok violated both federal law and Illinois' Biometric Information Privacy Act.
Snap is reportedly planning a wave of layoffs to cut costs. This development comes after IT companies, crypto exchanges and financial firms cut jobs and slowed down the hiring process due to slow global economic growth caused by higher interest rates, rising inflation and an energy crisis in Europe.
Microsoft (MSFT - Free Report) is slowing down hiring for its Office, Windows, and Teams groups to better prepare itself for the coming fiscal year and contend with the current economic environment. Microsoft’s fourth-quarter earnings were negatively impacted by a sharp slowdown in its cloud business, declining videogame sales and the effects of a strong dollar.
In May, Snap also issued a profit warning due to a worsening macroeconomic environment. This Zacks Rank #4 (Sell) company will significantly slow hiring, invest in its advertising business and find new sources of revenues in order to grow at a faster pace in the near term.
Image: Bigstock
SNAP Reaches $35M Settlement in Illinois Privacy Lawsuit
Snap Inc. (SNAP - Free Report) recently reached a $35 million settlement agreement with the State of Illinois in a class-action lawsuit over its use of facial recognition technology to collect user data illegally, per a Chicago Tribune report.
The lawsuit claimed that Snapchat's filters and lenses violated the state's Biometric Information Privacy Act (BIPA) by storing biometric data without the consent of the users. The state law requires companies to inform people in writing the purpose of biometric data collection and how long it will be kept.
The law is unique in that it allows private citizens to sue companies that may have violated the law. Illinois residents who resided in the state after Nov 17, 2015 and used Snapchat’s popular AR features may be eligible for a cut of the settlement, which can vary between $58 and $117.
Snapchat has argued that lenses do not collect biometric data that can be used to identify a specific person or engage in facial identification. Snapchat had issued an in-app consent notice to Illinois residents earlier this year out of caution.
Snap Inc. Price and Consensus
Snap Inc. price-consensus-chart | Snap Inc. Quote
Snap Joins Other Tech Giants Facing the Heat
Snap is the latest company, which follows other tech giants, including Meta Platforms (META - Free Report) and Alphabet (GOOGL - Free Report) -owned Google, to get penalized under BIPA. In June, Google agreed to pay $100 million to settle a class action lawsuit in Illinois over a facial recognition feature in Google Photos. The lawsuit alleged that the company violated BIPA through Google Photos’ “Face Grouping” feature.
In 2021, Facebook agreed to pay $650 million to settle a similar BIPA class action lawsuit over its facial tagging feature. This spring, some Illinois Facebook users received checks for nearly $400 from the same.
In May, Meta removed some augmented reality features — such as avatars and filters — from Facebook and Instagram in Illinois. Meta reached a $37.5 million settlement this week, in which the tech giant is accused of violating California law and user privacy through location tracking. Facebook users alleged that the company used their IP addresses to target ads even after users disabled location services,
Meanwhile, a federal judge in Illinois on Tuesday approved a $92 million class-action lawsuit settlement between the Chinese short-form video app TikTok and users of the platform. The lawsuit was filed over claims that TikTok violated both federal law and Illinois' Biometric Information Privacy Act.
Snap is reportedly planning a wave of layoffs to cut costs. This development comes after IT companies, crypto exchanges and financial firms cut jobs and slowed down the hiring process due to slow global economic growth caused by higher interest rates, rising inflation and an energy crisis in Europe.
Microsoft (MSFT - Free Report) is slowing down hiring for its Office, Windows, and Teams groups to better prepare itself for the coming fiscal year and contend with the current economic environment. Microsoft’s fourth-quarter earnings were negatively impacted by a sharp slowdown in its cloud business, declining videogame sales and the effects of a strong dollar.
In May, Snap also issued a profit warning due to a worsening macroeconomic environment. This Zacks Rank #4 (Sell) company will significantly slow hiring, invest in its advertising business and find new sources of revenues in order to grow at a faster pace in the near term.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.