Meta agrees to $1.4B settlement with Texas in privacy lawsuit over facial recognition

precedent

A handful of Houston startups will be bouncing back and forth to Austin for the second annual MassChallenge Texas accelerator. Photo via Getty Images

Meta has agreed to a $1.4 billion settlement with Texas in a privacy lawsuit over allegations that the tech giant used biometric data of users without their permission, officials said Tuesday.

Texas Attorney General Ken Paxton said the settlement is the largest secured by a single state. In 2021, a judge approved a $650 million settlement with the company, formerly known as Facebook, over similar allegations of users in Illinois.

“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,” Paxton, a Republican, said in a statement.

Meta said in a statement: “We are pleased to resolve this matter, and look forward to exploring future opportunities to deepen our business investments in Texas, including potentially developing data centers.”

Filed in 2022, the Texas lawsuit said that Meta was in violation of a state law that prohibits capturing or selling a resident's biometric information, such as their face or fingerprint, without their consent.

“This is by far the biggest state governmental privacy settlement in history,” Chicago-based class action attorney Jay Edelson said in an email. Edelson's firm filed the lawsuit that settled for $650 million with Meta. The only other larger claim is the Federal Trade Commission's $5 billion settlement with the company in 2019.

To date, Meta has now paid over $2 billion in settlements for biometric privacy claims, according to Edelson. “That is a huge signal to other companies that they should be extremely careful if they want to trade in individuals' biometric information,” he said.

The company announced in 2021 that it was shutting down its face-recognition system and delete the faceprints of more than 1 billion people amid growing concerns about the technology and its misuse by governments, police and others.

At the time, more than a third of Facebook’s daily active users had opted in to have their faces recognized by the social network’s system. Facebook introduced facial recognition more than a decade earlier but gradually made it easier to opt out of the feature as it faced scrutiny from courts and regulators.

Facebook in 2019 stopped automatically recognizing people in photos and suggesting people “tag” them, and instead of making that the default, asked users to choose if they wanted to use its facial recognition feature.

Texas filed a similar lawsuit against Google in 2022. Paxton’s lawsuit says the search giant collected millions of biometric identifiers, including voiceprints and records of face geometry, through its products and services like Google Photos, Google Assistant, and Nest Hub Max. That lawsuit is still pending.

The $1.4 billion is unlikely to make a dent in Meta’s business. The Menlo Park, California-based tech made a profit of $12.37 billion in the first three months of this year, Its revenue was $36.46 billion, an increase of 27% from a year earlier. Meta is scheduled to report its second-quarter earnings results on Wednesday.

Meta’s stock slipped $4.06 to $461.65 Tuesday, a decline of less than 1%.

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Hobby Airport was one of five airports selected nationally to use a new facial recognition software. Image via fly2houston.com

Houston airport first in Texas to be selected for facial recognition program

just face it

International travelers coming in and out of Hobby Airport are being processed now completely with facial recognition as of last week. The technology is expected to shorten wait times and streamline safety.

"Hobby Airport has taken a big leap into the future of travel," Houston Aviation Director Mario Diaz says in a news release.

Houston was one of the five airports picked by Homeland Security — and the only in Texas — to have Simplified Arrivals, a full biometric entry and exit for international passengers going through United States Customs and Border Protection inspection checkpoints.

"Simplified Arrivals will enhance the travel experience for more than a million international passengers traveling through Hobby Airport every year," Diaz continues in the release. "This is an important step to realize our goal of becoming a 5-star airport."

Houston Airport Systems first introduced biometric technology with Southwest Airlines in November 2018, and before that, George Bush Intercontinental Airport first started using facial recognition technology in 2017. Since 2018, this biometric facial technology has recognized 250 imposters nationally who attempted to enter the U.S. with legal travel documents that belonged to a different person, according to the release.

The new technology is expected to speed up the checkpoint process. Image via fly2houston.com

Travelers will encounter the technology at their primary inspection point. They will taker a photo, which will then compare that image to previously provided photos of that traveler — like passport and visa photos. Travelers under the age of 14 or over the age of 79 can opt out and be process manually. United States and Canadian citizens may also opt out.

"CBP is committed to working with our partners to ensure that the travel system is secure and efficient," Houston Director of Field Operations Judson W. Murdock II says in the release. "The speed, accuracy and reliability of facial comparison technology enable CBP officers to confirm a traveler's identity within seconds while further enhancing the customer experience."

These new photos of U.S. citizens taken at the checkpoint will be deleted within 12 hours, while photos of foreign nationals will be stored in a secure system.

"It takes a village to make something like this happen," says Saba Abashawl, director of external affairs at HAS, in a promotional video. "At the end of the day, we end up providing unparalleled customer service."

Zenus Biometrics uses its facial recognition software to provide seamless check in at events around the world. Courtesy of Zenus Biometrics

Growing Houston tech company using facial recognition for event security

Face first

Long, inefficient check-in lines at events or conferences could be a thing of the past with the technology from a Houston company.

Zenus Biometrics, is changing the game of event registration and security through facial recognition.

"Over the last 12 months, we've done more than 50 events all over the world," says co-founder Panos Moutafis. "And for the most part, what we're hearing from these planners is that this is a very new technology and they want to be at the forefront of it."

The software system overlays on already-existing ticketing and registration platforms for event hosting companies. During the registration process, attendees are prompted to either take a selfie or upload an existing headshot. Those who are leery of the process or simply don't want to participate can easily opt out.

Zenus' programming can take a group photo, select all the faces in it and prompt the attendee to select himself. It will also advise whether an image is too blurry for use and suggest uploading another image instead. Once participants arrive at the conference, they approach a camera at check-in. The software recognizes their faces and pops up a menu that asks them to confirm their identity. The process takes seconds.

"This really allows for controlled access," said Moutafis. "Some people might look to game the system – they might register for themselves and then hand off their conference badge to someone who didn't pay to attend. Zenus allows companies to have more security over attendees."

He said the system can also work to limit access. If a company wants to set up a VIP or secure space, they can upload images of those they wish to allow beyond a certain point into Zenus' platform and anyone who doesn't match the facial recognition will be turned away.

The pioneering company operates from a headquarters in Houston's EaDo, and has clients around the globe. Back in November, it took home the prestigious Tech Award at IBTM World in Barcelona, one of the world's leading conferences for the meetings and event industries.

Moutafis said that in addition to being a leading-edge service provider, Zenus balances privacy with innovation. The company doesn't record the emails, contact information or credit cards for conference attendees using the facial recognition platform — only the uploaded images. And those are deleted days after the conference ends. The opt-in feature means that anyone who might feel skittish about the technology doesn't need to use it, and traditional check-in methods will be available onsite for them.

Over the next year, Zenus is perfecting and rolling out a new high-resolution camera that can be mounted in event rooms that will count the faces of those in the meeting or seminar. It's designed to provide a layer of analytics for event planners, capturing how many people attended the session. It can also record their expressions and provide data that can be used to determined how well the session was liked by the audience.

"We just added two more people to our team, so we have a staff of about seven now," he said. "We also work with a team of consultants. Here in Houston, our headquarters has a vibrant, cool feel to it. We're growing and it's exciting."

Born in Greece, Moutafis came to Houston in 2011 to work on his Ph.D. in computer science at the University of Houston. Armed with a B.A. in statistics, he was seeking a way to combine his analytical background with developing algorithms in artificial intelligence. It turned out that the lab he was attached to at UH was focused on facial recognition software.

"That was a different kind of problem to me, and I like a challenge," he says. "And I was attracted to the idea of using facial recognition as a security measure. No matter where you go, whether it's the bank or using a credit card for a purchase in some places, you have to verify your ID. Facial recognition is one of the most frictionless ways to do this."

In 2015, his last year of doctoral studies, he received an National Science Foundation grant that gave him funding to build a team and research what would become Zenus. He also received mentorship and advising about whether he had a viable idea and how to bring it to the marketplace. The following year, he massaged his concept, changed its logo and name, and Zenus was born.

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Eli Lilly breaks ground on $6.5B pharmaceutical factory in Houston

lilly lands

Leading pharmaceutical company Eli Lilly broke ground today, Sept. 21, on its $6.5 billion manufacturing site at Houston's Generation Park.

The 236-acre, state-of-the art factory is expected to come online in 2030 and will manufacture Foundayo, the company's first synthetic oral GLP-1 medication, as well as other advanced therapeutics.

"We are thrilled to break ground on our latest ‘medicines made in America’ site in the great state of Texas," David Ricks, Lilly chair and CEO, said in a prepared statement. "This $6.5 billion investment will help change the game for tens of millions of people suffering from overweight, obesity and its consequences like diabetes. We will make and ship Lilly’s latest products from Texas to people here at home and around the world.”

Houston was up against more than 300 locations in the U.S. for the factory, as part of Lilly’s $50 billion investment in domestic medicine production that has launched 10 manufacturing sites since 2020. Lilly first announced Houston had been selected for the site last September.

Photo via gov.texas.gov

As Abbott mentioned, the site is expected to create hundreds of jobs, and will hire engineers, scientists, operations personnel and lab technicians once up and running. It will create 4,000 construction jobs while being built.

In an effort to support workforce development, Lilly also announced a $12.5 million commitment to Houston's San Jacinto College in addition to a $2.5 million charitable donation to the San Jacinto College Foundation. The funding will go toward hands-on training, equipment and facilities to support future technicians, operators, maintenance professionals, and other manufacturing talent, according to Lilly. The charitable donation will fund scholarships for students.

"This relationship will build a strong, sustainable talent pipeline for Lilly while creating meaningful, high-demand career opportunities across our region,” Brenda Hellyer, chancellor of San Jacinto College, said in the release.

"When you invest in a place like Houston, you invest in its people first," Edgardo Hernandez, executive vice president and president of Lilly Manufacturing Operations, added. "This facility will run on the talent of this community, powered by our relationship with San Jacinto College. We're hiring across the greater Houston area to help residents build careers close to home."

Rendering courtesy Eli Lilly

Lilly previously said it chose Generation Park, a 4,300-acre, master-planned commercial district near Lake Houston, because of factors such as financial incentives, access to utilities and transportation and the region’s business-friendly environment. Generation Park is home to campuses for San Jacinto College and Lone Star College.

Since Lilly first announced plans for the site, another fellow pharma giant has made plans to move into Generation Park. Bristol Myers Squibb Co. announced last month that it would build a $2.3 billion factory in the district. The site is expected to manufacture small molecule, biologic and antibody-drug conjugates and will also come online around 2030. Read more here.

UH Health names leader of new digital health institute

new exec

Recently launched UH Health has named the first-ever executive director of its new Institute for Digital Healthcare Transformation at the University of Houston.

Beto López has been tapped to lead the new initiative that aims to help develop and commercialize health care technologies centered around university research.

Launched in August, the Institute for Digital Healthcare Transformation leans on experts from UH’s engineering, medicine, business, law and other departments and will connect with industry partners. It will initially focus on mobile health applications, sensors, wearables and artificial intelligence, according to UH.

“Most digital health initiatives and commercialization efforts start with the technology and hope adoption follows. But the translation gap isn't a science problem — it’s a scaffolding problem between researchers, the community and the market,” López said in a news release. “I've spent the past 10 years building that scaffolding in places that weren’t wired for it, and I'm looking forward to building it here at UH to help ensure new health care technologies reach the people and communities that can benefit from them most.”

López previously spent 10 years at San Francisco-based innovation consultancy company IDEO, where he led over 100 projects for Fortune 500 companies and public agencies. He co-founded and served as managing director of the Design Institute for Health at UT Austin’s Dell Medical School; and also co-founded a social venture studio/venture capital fund focused on health care innovation. He worked alongside Houston’s Legacy Community Health during the COVID-19 pandemic.

“Beto understands that breakthrough technology alone doesn't transform health care — it has to be designed around the needs of patients, providers and communities and have a clear path into practice,” Jonathan McCullers, vice president for health affairs at UH, added in the news release. “His experience spanning academic health care and venture capital equips him to bring together researchers, health care organizations, entrepreneurs and investors. This makes him uniquely suited to lead this institute and help turn the university's innovation into solutions that improve people's lives.”

The University of Houston launched UH Health, its new cross-disciplinary academic venture, in July. It aims to bring together the university's health-related education, research and community impact under one umbrella.

ExxonMobil gets approval for $5B Texas Gulf Coast carbon capture project

CCS Expansion

Spring-based ExxonMobil has won approval from the Texas Railroad Commission for a $5 billion carbon capture and storage project in East Texas.

Dominic Genetti, senior vice president of CCS at ExxonMobil, told The Financial Times, which broke the news, that the Railroad Commission’s action is a “major milestone” that lets the company keep expanding along the Gulf Coast. In a 2-1 vote, commissioners authorized a carbon sequestration permit for the project.

“The Railroad Commission clearly recognizes the important role carbon capture and storage can play in meeting growing global demand for lower-carbon products while supporting new jobs and economic growth,” Genetti said.

The U.S. Environmental Protection Agency (EPA) approved ExxonMobil’s Rose CCS project last year.

The project will enable the company to inject about 53 metric tons of industrial customers’ carbon emissions into three underground wells it drilled in the Beaumont-Port Arthur area. Over a 13-year period, ExxonMobil plans to inject about 4 million metric tons per year into the Fleming and Upper Frio rock formations, according to Carbon Herald.

ExxonMobil says it owns the world’s first and largest CCS system, comprising 1,300 miles of CO2 pipeline and secure storage sites. Seventy percent of the pipelines are along the Gulf Coast.

The company ramped up its CCS business in 2023 with the $4.9 billion purchase of Denbury, which owned about 1,000 miles of CO2 pipelines.

“Our expertise, combined with Denbury’s talent and CO2 pipeline network, expands our low-carbon leadership and best positions us to meet the decarbonization needs of industrial customers while also reducing emissions in our own operations,” ExxonMobil Chairman and CEO Darren Woods said when the deal closed.

In January, Genetti wrote in a post on ExxonMobil’s website that the company is committed to CCS “for the long haul.”

“CCS is not new technology, but it’s flown relatively under the radar compared with the attention that production of hydrocarbons commands,” he wrote. “Now, as the world becomes more aware of the need to reduce emissions, CCS finally has a brighter spotlight and a broader runway to scale up.”

The company also announced this week that it has begun CCS operations at a direct reduced iron facility in Convent, Louisiana. The project will capture, transport and store up to 800,000 metric tons of CO2 per year, according to the company.

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This article first appeared on EnergyCapitalHTX.com.

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