Controversial facial recognition company Clearview AI has agreed to an unusual settlement to a class action lawsuit, The New York Times reports. Rather than paying cash, the company would provide a 23 percent stake in its company to any Americans in its database. Without the settlement, Clearview could go bankrupt, according to court documents.
If you live in the US and have ever posted a photo of yourself publicly online, you may be part of the class action. The settlement could amount to at least $50 million according to court documents, It still must be approved by a federal judge.
Clearview AI, which counts billionaire Peter Thiel as a backer, says it has over 30 billion images in its database. Those can be accessed and cross-referenced by thousands of law enforcement departments including the US FBI and Department of Homeland Security.
Shortly after its identity was outed, Clearview was hit with lawsuits in Illinois, California, Virginia, New York and elsewhere, which were all brought together as a class action suit in a federal Chicago court. The cost of the litigation was said to be draining the company’s reserves, forcing it to seek a creative way to settle the suit.
The relatively small sum divided by the large number of users likely to be in the database means you won’t be receiving a windfall. In any case, it would only happen if the company goes public or is acquired, according to the report. Once that occurs, lawyers would take up to 39 percent of the settlement, meaning the final amount could be reduced to about 30 million. If a third of Americans were in the database (about 110 million), each would get about 27 cents.
That does beg the question of whether it would be worth just over a quarter to see one of the creepiest companies of all time to go bankrupt. To cite a small litany of the actions taken against it (on top of the US class action):
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It was sued by the ACLU in 2020 (Clearview agreed to permanently halt sales of its biometric database to private companies in the US as part of the settlement.
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Italy slapped a €20 million fine on the company in 2022 and banned it from using images of Italians in its database
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Privacy groups in Europe filed complaints against it for allegedly breaking privacy laws (2021)
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UK’s privacy watchdog slapped it with a £7.55 million fine and ordered it to delete data from any UK resident
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The LAPD banned the use of its software in 2020
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Earlier this year the EU barred untargeted scraping of faces from the web, effectively blocking Clearview’s business model in Europe
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