WEBVTT - Facebook Face-Scan Trial Okayed by Appeals Court

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<v Speaker 1>Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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<v Speaker 1>day we bring you insight and analysis into the most

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<v Speaker 1>important legal news of the day. You can find more

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<v Speaker 1>episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud

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<v Speaker 1>and on Bloomberg dot com slash podcasts. Facebook is much

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<v Speaker 1>closer to a courtroom and a trial where it will

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<v Speaker 1>be exposed to billions of dollars in damages. It could

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<v Speaker 1>not undo a ruling that allows millions of its users

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<v Speaker 1>to band together in a lawsuit accusing the social network

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<v Speaker 1>of gathering and storing biometric data without consent. Joining me

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<v Speaker 1>is Eric Goldman, a professor at Santa Clara University School

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<v Speaker 1>of Law. Eric, this is a privacy suit by Illinois

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<v Speaker 1>Facebook users. What are they claiming here? They're claiming that

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<v Speaker 1>Facebook created staff shots of their faith geometry and violation

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<v Speaker 1>of the statute which requires Facebook to obtain their consent

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<v Speaker 1>before making those geometry calculations. This is a class action lawsuit.

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<v Speaker 1>What was the reasoning of the Ninth Circuit for allowing

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<v Speaker 1>it to go forward as a class well? The ruling

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<v Speaker 1>didn't deal with all of the different issues that need

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<v Speaker 1>to be adjudicated in this dispute. Facebook is trying some

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<v Speaker 1>procedural moves to either eliminate the food or to make

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<v Speaker 1>it less dangerous. So, for example, it tried to claim

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<v Speaker 1>that the members of the class didn't have common interest,

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<v Speaker 1>especially about the fact that they were based in Illinois

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<v Speaker 1>but bringing in laws in California. But the court said

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<v Speaker 1>that the lower court could properly determine whether or not

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<v Speaker 1>the Illinois residents had a right to bring a laws

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<v Speaker 1>in California, and therefore they could all be adjudicated together.

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<v Speaker 1>Facebook is exposed to these huge penalties in this suit

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<v Speaker 1>because of the Illinois Privacy Act, and I suppose that's

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<v Speaker 1>why Illinois residents brought it. Yeah, right, The laws shouldn't

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<v Speaker 1>apply to any other residents, so it's a Illinois specific law.

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<v Speaker 1>And of course that some interesting questions about how Facebook

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<v Speaker 1>could deal with one specific state statutes when it's appealing

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<v Speaker 1>to people across the globe. I will add that since

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<v Speaker 1>Illinois enacted law, a few other states have enacted similar laws,

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<v Speaker 1>although they're not identical, so there could be other claims

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<v Speaker 1>in the future by residents of other states. Explain what

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<v Speaker 1>this law specifically requires, Well, the law is basically trying

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<v Speaker 1>to prevent anyone, including Facebook, but not exclusively Facebook, from

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<v Speaker 1>using biometric information. So there's a bunch of different ways

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<v Speaker 1>in which we are uniquely identifiable as people based on

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<v Speaker 1>our body. That includes things like our face. But there's

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<v Speaker 1>another traits that we have that can be through machine

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<v Speaker 1>learning and computer algorithms, uniquely identifying individual people. So the

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<v Speaker 1>law tries to prevent all of that, and say, anyone

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<v Speaker 1>who wants to gather and use biometric information needs to

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<v Speaker 1>obtain consent from the person who's going to be acorded

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<v Speaker 1>in the database. And then there's some other procedural requirements

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<v Speaker 1>like that information has to be tossed in a certain

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<v Speaker 1>period of time. Other than procedural defenses, what is Facebook's

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<v Speaker 1>defense to the merits of the case. There's a lot

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<v Speaker 1>of great defenses. I think that Facebook actually did the

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<v Speaker 1>behavior that the statute tried to regulate, but that's not

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<v Speaker 1>the end of the inquiry. So, as I mentioned, one

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<v Speaker 1>of the things that I'm struggling with is how Facebook

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<v Speaker 1>could uniquely determine that someone's an Illinois resident governed by

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<v Speaker 1>this law versus a California resident not governed by this law.

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<v Speaker 1>The only way they might know that is by actually

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<v Speaker 1>figuring that who that person is, and the biometrics would

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<v Speaker 1>have been necessary to do that. So there's a kind

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<v Speaker 1>of feedback loop here. How does Facebook noll is dealing

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<v Speaker 1>with Illinois residents if it doesn't actually uniquely identify them

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<v Speaker 1>using biometrics? But if it does uniquely identify them using biometrics,

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<v Speaker 1>then they've broken the law. So there's a little bit

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<v Speaker 1>of a tautology here for Facebook. That's one of the

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<v Speaker 1>substance questions I have about this case. Did Google win

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<v Speaker 1>dismissal of a similar suit in December? So how did

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<v Speaker 1>they win dismissal on the other grounds? Sorry, I have

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<v Speaker 1>to remember that. Now. Facebook said it plans to seek

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<v Speaker 1>further review of the ruling. Is it talking about a

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<v Speaker 1>request for an on bank ruling at the Ninth Circuit

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<v Speaker 1>or the Supreme Court? Yeah. The standard protocoll would be

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<v Speaker 1>for to ask the Ninth Circuit to hear the case again.

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<v Speaker 1>It would first ask the panel to reconsider what they did,

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<v Speaker 1>and they're probably not going to do that. It would

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<v Speaker 1>ascend a larger group of nine Circuit judges to consider

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<v Speaker 1>the case again. That's called an on bo kiering, and

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<v Speaker 1>those are possible. But they're they're not granted very frequently,

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<v Speaker 1>and then if it's denied on both of those and

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<v Speaker 1>theological step would be fair to appeal the Supreme Court,

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<v Speaker 1>where the odds of it getting the Supreme Court to

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<v Speaker 1>take it are very low. This has already been delayed

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<v Speaker 1>for more than a year with Facebook's appeals. Trial was

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<v Speaker 1>originally set for July of last year. Tell us about

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<v Speaker 1>the judge if you know in that case who seems

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<v Speaker 1>unsympathetic to Facebook's arguments for limiting its exposure. Well, in

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<v Speaker 1>the end, I think that all judges trying to apply

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<v Speaker 1>the law, So you know, in the end, like every

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<v Speaker 1>other judge, this judge is trying to get it right.

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<v Speaker 1>My own impression of this particular judge has said he's

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<v Speaker 1>been quite skeptical of the Internet company claims about why

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<v Speaker 1>they use technology the way that they do. I've seen

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<v Speaker 1>some other rulings from him that against suggest that skepticism.

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<v Speaker 1>In the end, I expect him to apply the law

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<v Speaker 1>so that skepticism shouldn't matter to the end. But definitely,

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<v Speaker 1>if they're is a great area, I would expect him

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<v Speaker 1>to be less accommodating of the Internet Company's arguments and

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<v Speaker 1>maybe other judges. Would you know people talk about Facebook

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<v Speaker 1>being exposed to billions of dollars in damages, it's already

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<v Speaker 1>agreed to. I think it was a five billion dollar

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<v Speaker 1>fine with the FTC. Do billions really matter to Facebook? Well,

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<v Speaker 1>at some point the money runs out, So um, Facebook

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<v Speaker 1>has a lot of money. They're they're one of the

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<v Speaker 1>wealthiest companies in the world. Um. But but the fact

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<v Speaker 1>that a single state could create damages obligation that could

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<v Speaker 1>dwarf any other government's imposition of penalty on Facebook. It's

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<v Speaker 1>something that we just want to note. We can't we

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<v Speaker 1>can't be so cavalier about Facebook's wealth when you realize

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<v Speaker 1>we're just talking about Illinois users of Facebook. We're not

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<v Speaker 1>talking about the billions of other users of Facebook. Interesting. So, now,

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<v Speaker 1>of all the different investigations and regulators that are looking

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<v Speaker 1>at Facebook, which would you say, about a minute, here

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<v Speaker 1>is the one that has to worry about most. I

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<v Speaker 1>think I have to worry about all of them. I

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<v Speaker 1>know that's a lot flip, but basically, regulators are gunning

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<v Speaker 1>for Facebook across the board, across the globe, and so

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<v Speaker 1>any one of them they can find the right tool,

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<v Speaker 1>is determined to destroy Facebook. This lawsuit, you expected to

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<v Speaker 1>go to trial. Actually, at this point, I'm not sure

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<v Speaker 1>what moved. Facebook still has to prevent that. So if

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<v Speaker 1>they can't find another mood to prevent trial, then that's

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<v Speaker 1>that is the logical next step. All right, Thanks so much, Eric,

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<v Speaker 1>it's a pleasure having you on. That's Eric Goldman. He's

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<v Speaker 1>a professor at Santa Clara University School of Law. Thanks

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<v Speaker 1>for listening to the Bloomberg Law Podcast. You can subscribe

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<v Speaker 1>and listen to the show on Apple podcast, SoundCloud, and

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<v Speaker 1>on Bloomberg dot com slash podcast. I'm June Brosso. This

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<v Speaker 1>is Bloomberg