Meta, the parent company of Facebook, has reached a $1.4 billion settlement with the state of Texas to resolve allegations of unauthorised collection and use of biometric data from millions of Texans.

The agreement, announced on Tuesday, marks the largest settlement ever obtained by a single state and the largest privacy settlement secured by an attorney general.

Texas Attorney General Ken Paxton filed the lawsuit in February 2022, accusing Meta of violating the state's "Capture or Use of Biometric Identifier" Act and Deceptive Trade Practices Act. The suit alleged that Meta's facial recognition technology, introduced in 2011 as "Tag Suggestions", captured biometric data without users' informed consent.

"This historic settlement demonstrates our commitment to standing up to the world's biggest technology companies and holding them accountable for breaking the law and violating Texans' privacy rights," said Paxton in a statement.

Meta, while agreeing to the settlement, maintained its denial of any wrongdoing. A company spokesperson stated, "We are pleased to resolve this matter, and look forward to exploring future opportunities to deepen our business investments in Texas."

The settlement amount dwarfs previous privacy-related agreements, including a $650 million settlement Meta reached with Illinois users in 2021 over similar facial recognition concerns. It also surpasses the $390 million settlement that Google agreed to pay to a group of 40 states in late 2022.

The Texas lawsuit alleged that for over a decade, Meta ran facial recognition software on virtually every face in photographs uploaded to Facebook, creating records of facial geometry without users' knowledge or consent. This practice raised significant privacy concerns, as biometric data is uniquely sensitive and can be used for various purposes, including surveillance and identity theft.

Meta announced in 2021 that it was shutting down its facial recognition system and deleting the faceprints of more than 1 billion people. This decision came amid growing public awareness and concern about the use of facial recognition technology by both private companies and government entities.

The case highlights the increasing scrutiny tech giants face regarding data privacy practices. It also underscores the potential financial risks companies may incur when their data collection methods run afoul of state privacy laws. Texas, like Illinois, has enacted strict biometric privacy laws, reflecting a growing trend of states taking the lead in regulating the use of personal data in the absence of comprehensive federal legislation.

The $1.4 billion settlement will be paid to the state of Texas over five years. While substantial, the amount is unlikely to significantly impact Meta's finances, as the company reported a profit of $12.37 billion in the first quarter of 2024 alone. However, the settlement may prompt other states to pursue similar legal actions against tech companies, potentially leading to more stringent data privacy practices across the industry.

The case against Meta is part of a broader push by Attorney General Paxton to hold major technology companies accountable. Texas has filed a similar lawsuit against Google in 2022, alleging the search giant collected millions of biometric identifiers without proper consent.

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