Facebook will pay over half a billion dollars to settle a class action lawsuit that alleged systematic violation of an Illinois consumer privacy law. The settlement amount is large indeed, but a small fraction of the $35 billion maximum the company could have faced.
Class members — basically Illinois Facebook users from mid-2011 to mid-2015 — may expect as much as $200 each, but that depends on several factors. If you’re one of them you should receive some notification once the settlement is approved by the court and the formalities are worked out.
The proposed settlement would require Facebook to obtain consent in the future from Illinois users for such purposes as face analysis for automatic tagging.
This is the second major settlement from Facebook in six months; a seemingly enormous $5 billion settlement of FTC violations was announced over the summer, but it’s actually a bit of a joke.
The Illinois suit was filed in 2015, alleging that Facebook collected facial recognition data on images of users in the state without disclosure, in contravention of the state’s 2008 Biometric Information Privacy Act (BIPA). Similar suits were filed against Shutterfly, Snapchat and Google.
Facebook pushed back in 2016, saying that facial recognition processing didn’t count as biometric data, and that anyway Illinois law didn’t apply to it, a California company. The judge rejected these arguments with flair, saying the definition of biometric was “cramped” and the assertion of Facebook’s immunity would be “a complete negation” of Illinois law in this context.
Facebook was also suspected at the time of heavy lobbying efforts toward defanging BIPA. One state senator proposed an amendment after the lawsuit was filed that would exclude digital images from BIPA coverage, which would of course have completely destroyed the case. It’s hard to imagine such a ridiculous proposal was the suggestion of anyone but the industry, which tends to regard the strong protections of the law in Illinois as quite superfluous.
As I noted in 2018, the Illinois Chamber of Commerce proposed the amendment, and a tech council there was chaired by Facebook’s own manager of State Policy at the time. Facebook told me then that it had not taken any position on the amendment or spoken to any legislators about it.
2019 took the case to the 9th U.S. Circuit Court of Appeals, where Facebook was again rebuffed; the court concluded that “the development of face template using facial-recognition technology without consent (as alleged here) invades an individual’s private affairs and concrete interests. Similar conduct is actionable at common law.”
Facebook’s request for a rehearing en banc, which is to say with the full complement of judges there present, was unanimously denied two months later.
At last, after some five years of this, Facebook decided to settle, a representative told TechCrunch, “as it was in the best interest of our community and our shareholders to move past this matter.” Obviously it admits to no wrongdoing.
“In this case, a federal court of appeals validated BIPA’s central insight: When corporations unlawfully collect or store a person’s biometric information, it causes real harm, and companies may be held liable for that harm,” said Rebecca Glenberg, Senior Staff Attorney for the ACLU of Illinois.
The $550 million amount negotiated is “the largest all-cash privacy class action settlement to date,” according to law firm Edelson PC, one of three that represented the plaintiffs in the suit.
“Biometrics is one of the two primary battlegrounds, along with geolocation, that will define our privacy rights for the next generation,” said Edelson PC founder and CEO Jay Edelson in a press release. “We are proud of the strong team we had in place that had the resolve to fight this critically important case over the last five years. We hope and expect that other companies will follow Facebook’s lead and pay significant attention to the importance of our biometric information.”
YouTube to launch parental control features for families with tweens and teens – TechCrunch
YouTube announced this morning it will soon introduce a new experience designed for teens and tweens who are now too old for the schoolager-focused YouTube Kids app, but who may not be ready to explore all of YouTube. The company says it’s preparing to launch a beta test of new features that will give parents the ability to grant kids more limited access to YouTube through a “supervised” Google Account. This setup will restrict what tweens and teens can watch on the platform, as well as what they can do — like create videos or leave comments, for example.
Many parents may have already set up a supervised Google Account for their child through Google’s Family Link parental control app. This app allows parents to restrict access across a range of products and services, control screen time, filter websites and more. Other parents may have created a supervised Google Account for their child when they first set up the child’s account on a new Android device or Chromebook.
If not, parents can take a few minutes to create the child’s supervised account when they’re ready to begin testing the new features. (Unfortunately, Google Edu accounts — like those kids now use for online school — aren’t supported at launch.)
The new features will allow parents to select between three different levels of YouTube access for their tween or teen. Initially, YouTube will test the features with parents with children under the age of consent for online services — age 13 in the U.S., but different in other countries — before expanding to older groups.
For tweens who have more recently graduated out of the YouTube Kids app, an “Explore” mode will allow them to view a broad range of videos generally suited for viewers age 9 and up — including vlogs, tutorials, gaming videos, music clips, news, and educational content. This would allow the kids to watch things like their favorite gaming streamer with kid-friendly content, but would prevent them (in theory) from finding their way over to more sensitive content.
The next step up is an “Explore More” mode, where videos are generally suitable for kids 13 and up — like a PG-13 version of YouTube. This expands the set of videos kids can access and allows them access to live streams in the same categories as “Explore.”
For older teens, there is the “Most of YouTube” mode, which includes almost all YouTube videos except those that include age-restricted content that isn’t appropriate for viewers under 18.
YouTube says it will use a combination of user input, machine learning, and human review to curate which videos are included in each of the three different content settings.
Of course, much like YouTube Kids, that means this will not be a perfect system — it’s a heavily machine-automated attempt at curation where users will still have to flag videos that were improperly filtered. In other words, helicopter parents who closely supervise their child’s access to internet content will probably still want to use some other system — like a third-party parental control solution, perhaps — to lock down YouTube further.
The supervised access to YouTube comes with other restrictions, as well, the company says.
Parents will be able to manage the child’s watch and search history from within the child’s account settings. And certain features on YouTube will be disabled, depending on the level of access the child has.
For example, YouTube will disable in-app purchases, video creation, and commenting features at launch. The company says that, over time, it wants to work with parents to add some of these features back through some sort of parent-controlled approach.
Also key is that personalized ads won’t be served on supervised experiences, even if that content isn’t designated as “made for kids” — which would normally allow for personalized ads to run. Instead, all ads will be contextual, as they are on YouTube Kids. In addition, all ads will have to comply with kids advertising policies, YouTube’s general ad policies, and will be subject to the same category and ad content restrictions as on Made for Kids content.
That said, when parents establish the supervised account for their child, they’ll be providing consent for COPPA compliance — the U.S. children’s privacy law that requires parents to be notified and agree to the collection and use personal data from the kids’ account. So there’s a trade-off here.
However, the new experience may still make sense for families where kids have outgrown apps designed for younger children — or even in some cases, for younger kids who covet their big brother or sister’s version of “real YouTube.” Plus, at some point, forcing an older child to use the “Kids” app makes them feel like they’re behind their peers, too. And since not all parents use the YouTube Kids app or parental controls, there’s always the complaint that “everyone else has it, so why can’t I?” (It never ends.)
This slightly more locked down experience lets parents give the child access to “real YouTube” with restrictions on what that actually means, in terms of content and features.
YouTube, in an announcement, shared several endorsements for the new product from a few individual youth experts, including Leslie Boggs, president of National PTA; Dr. Yalda Uhls, Center for Scholars & Storytellers, UCLA – Author of Media Moms & Digital Dads; Thiago Tavares, Founder and President of SaferNet Brazil; and Professor Sun Sun Lim, Singapore University of Technology & Design – Author of Transcendent Parenting.
YouTube’s news, notably, follows several product updates from fast-growing social video app and YouTube rival TikTok, which has rolled out a number of features aimed at better protecting its younger users.
The company in April 2020 launched a “family pairing” mode that lets a parent link their child’s account to their own in order to also lock down what the child can do and what content they can see. (TikTok offers a curated experience for the under-13 crowd called Restricted Mode, which can be switched on here, too.) And in January of this year, TikTok changed the privacy setting defaults for users under 18 to more proactively restrict what they do on the app.
YouTube says its new product will launch in beta in the “coming months” in over 80 countries worldwide. It also notes that it will continue to invest in YouTube Kids for parents with younger children.
Facebook brings news sharing back to Australia – TechCrunch
The Facebook-Australia news battle seems to have reached an end, Android gets an update and Lucid Motors is going public via SPAC. This is your Daily Crunch for February 23, 2021.
The big story: Facebook brings news sharing back to Australia
Last week, Facebook responded to the Australian government’s proposed law requiring internet platforms to strike revenue-sharing agreements with news publishers by blocking news sharing and viewing for users in the country. But with the government amending the law, Facebook said it will restore news sharing in the “coming days.”
Among other things, the amendments call for a two-month mediation period before Facebook is forced into arbitration with publishers, and it also says the government will consider commercial agreements that the platforms have made with local publishers before deciding whether the law applies to them.
William Easton, Facebook’s managing director for Australia and New Zealand, said in a statement that the amendments address “core concerns about allowing commercial deals that recognize the value our platform provides to publishers relative to the value we receive from them.”
The tech giants
Android’s latest update will let you schedule texts, secure your passwords and more — This update will integrate a feature called Password Checkup to alert you to passwords you’re using that have been previously exposed.
Twitter relaunches test that asks users to revise harmful replies — Twitter is running a new test that will ask users to pause and think before they tweet.
Area 120 is beginning to use Google’s massive reach to scale HTML5 GameSnacks platform — GameSnacks is an HTML5 gaming platform where titles are bite-sized and load much faster.
Startups, funding and venture capital
Lucid Motors strikes SPAC deal to go public with $24B valuation — This will be the largest deal yet between a blank-check company and an electric vehicle startup.
Shippo raises $45M more at $495M valuation as e-commerce booms — The startup provides shipping-related services to e-commerce companies.
Reddit ups Series E round by another $116M — Reddit had already announced a $250 million Series E earlier this month.
Advice and analysis from Extra Crunch
How to overcome the challenges of switching to usage-based pricing — The usage-based pricing model almost feels like a cheat code, according to OpenView’s Kyle Poyar.
Oscar Health’s initial IPO price is so high, it makes me want to swear — Alex Wilhelm doesn’t mince words: “Public investors have lost their damn minds.”
RIBS: The messaging framework for every company and product — The test is designed to tell you if your story is memorable, so you can turn it into a compelling message.
(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)
Announcing the complete agenda for TC Sessions: Justice — Our second-ever dedicated event to diversity, equity, inclusion and labor in tech is coming up on March 3.
Six Miami-based investors share their views on the region’s startup scene — Investors see a huge opportunity for the region to become a major startup hub by utilizing its diverse workforce and wonderful quality of life.
SolarWinds hackers targeted NASA, Federal Aviation Administration networks — Hackers are said to have broken into the networks of U.S. space agency NASA and the Federal Aviation Administration as part of a wider espionage campaign.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
Reddit ups Series E round by another $116 million – TechCrunch
Reddit, which announced a $250 million Series E earlier this month, has added over $116 million to the financing event, upping the round’s most recent total to $367 million, according to a new SEC filing. The document shows that Reddit is aiming to raise up to $500 million in this capital raise.
A Reddit spokesperson confirmed the news, saying that the new capital is from ”new and existing investors.” They offered no specifics on names. The spokesperson did confirm that the new capital did not come with a new valuation, keeping the platform at its previously-announced valuation of $6 billion pre-money.
Reddit is a 16-year-old company with over $800 million in known venture funding. It has been in the spotlight for the past few months, with co-founder Alexis Ohanian resigning over moderation concerns, to, more recently, its role in the Election and the meteoric rise of GameStop’s stock due to the subreddit r/WallStreetBets.
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