tiprankstipranks
Facebook Wins Preliminary Settlement In Facial Recognition Lawsuit
Market News

Facebook Wins Preliminary Settlement In Facial Recognition Lawsuit

Facebook won preliminary approval late on Wednesday from a US federal court for settlement of a lawsuit that claimed it illegally collected and stored biometric data of millions of users without their consent, according to a Reuters report.

The move comes after Facebook (FB) in July increased its settlement offer by $100 million to $650 million in relation to the lawsuit, in which Illinois users accused it of violating the U.S. state’s Biometric Information Privacy Act.

The revised settlement agreement resolved the court’s concerns, leading to the preliminary approval of the class action settlement, Judge James Donato wrote in an order filed in the US District Court for the Northern District of California.

“Preliminary approval of the amended stipulation of class action settlement, Dkt. No. 468, is granted, and a final approval hearing is set for January 7, 2021,” the judge said in the eight-page order.

Facebook allegedly violated the state’s law through its “Tag Suggestions” feature, which allowed users to recognize their Facebook friends from previously uploaded photos, according to the lawsuit, which began in 2015.

The social media platform has in recent months been grappling with criticism from lawmakers and regulators over its privacy practices. Last year, it agreed to pay a record $5 billion fine to settle a Federal Trade Commission data privacy probe.

Shares in Facebook have surged 28% this year as the social media network has been benefiting from a user boom during the coronavirus pandemic, which accelerated the need for remote social engagement as well as for online business and working tools. Looking ahead, the $287.81 average analyst price target implies shares could advance about 10% in the coming 12 months.

Stifel Nicolaus analyst John Egbert last month reiterated a Buy rating on the stock with a $260 price target saying that Facebook is well-positioned to weather the current headwinds.

“Global scrutiny on Facebook’s business practices has had little impact on the business to date, though further privacy regulation / antitrust scrutiny will likely continue to weigh on the company’s multiple,” Egbert wrote in a note to investors. “However, at current levels, FB shares appear extremely inexpensive relative to growth, particularly in comparison to peers, and earnings growth should be sufficient to drive FB shares to healthy near- and long-term returns.”

Overall Wall Street analysts have a bullish call on Facebook. The Strong Buy consensus boasts 29 Buy ratings versus 4 Hold ratings and 1 Sell rating. (See Facebook stock analysis on TipRanks).

Related News:
Nvidia Posts Record Sales Sparked By Online Gaming Boom; Analyst Raises PT
Intel’s New Transistor Technology To Boost Chip Performance By 20%
Facebook Barks At Apple For Refusing to Waive 30% Fee On New Tool

Trending

Name
Price
Price Change
S&P 500
Dow Jones
Nasdaq 100
Bitcoin

Popular Articles