Facebook (FB) Stock Down, Loses First Round Court Fight Over Biometric Storage
NEW YORK (TheStreet) -- Facebook (FB) - Get Report shares are falling 0.33% to $117.39 on Friday morning after the social networking service lost the first round in a lawsuit challenging its photo-tagging system.
A federal judge in San Francisco on Thursday ruled against the company's motion to dismiss the lawsuit.
The plaintiffs, three Illinois residents, sued Facebook over its photo-tagging system, alleging it "unlawfully" garnered and stored biometric data derived from their faces in photos, Reuters reports.
The court came to a conclusion that Illinois law applies to this case and that it violates Illinois' Biometric Information Privacy Act (BIPA), which requires companies to get consent from consumers before gathering biometric data.
Facebook had argued that users could not file a complaint under Illinois BIPA, since the photo-tagging system is disclosed in the company's Data Policy, and California law would govern users' disputes with the company.
"This lawsuit is without merit," a Facebook spokesperson said in an earlier statement on the case, "and we will defend ourselves vigorously," according to The Verge.
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Separately, Facebook has a "buy" rating and a letter grade of A- at TheStreet Ratings because of the company's robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins.
You can view the full analysis from the report here: FB
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
