Clearview AI, a facial recognition startup, settled its massive privacy lawsuit that is estimated to be worth more than $50 million.
The agreement stated that plaintiffs would be entitled to a share of the company's potential value instead of a traditional payout.
Clearview AI Faces Lawsuit for Facial Recognition Technology
Several lawsuits were filed against the startup due to the alleged illegal data-gathering process of the company. According to the suit, the company collected photos from social media and other platforms to establish its database which was then sold to its customers.
Clearview AI reportedly sold these data to individuals, businesses, and government entities. In 2022, the company settled a separate case in Illinois that prohibited the company from selling access to its database to private individuals and businesses.
However, the agreement allowed Clearview to sell its database to local law enforcement and federal agencies, as long as they were outside Illinois. The state is known for implementing strict laws on digital privacy.
Clearview AI Settles Lawsuit Using Company Shares
Both parties revealed that a "creative solution" was considered for the settlement due to the current financial situation of the AI company. The lead plaintiffs' attorney Jon Loevy confirmed the agreement.
Loevy reported that Clearview does not have the cash to pay traditionally to the plaintiffs, resulting in a special agreement. A national campaign is included in the agreement to notify potential victims of the suit.
"Under the settlement, the victims whose privacy was breached now get to participate in any upside that is ultimately generated, thereby recapturing to the class to some extent the ownership of their biometrics," he stated.
Privacy advocates are criticizing the decision, citing that the agreement only "legitimizes" Clearview. They also emphasized that the company could continue to harvest faces on the internet without consent.
