Clearview AI Reaches $50 Million Settlement Over Facial Recognition Privacy Violations

Clearview AI Reaches $50 Million Settlement Over Facial Recognition Privacy Violations

Clearview AI, a facial recognition startup, reached a significant settlement in an Illinois lawsuit, addressing allegations that its vast collection of facial images violated privacy rights. The settlement, estimated to be worth over $50 million, offers a unique approach by granting plaintiffs a stake in the company's future value rather than a traditional cash payout. Approximately $20 million from the settlement is earmarked for attorneys' fees.

Judge Sharon Johnson Coleman of the Northern District of Illinois granted preliminary approval for the settlement on Friday. This case consolidates various lawsuits from across the U.S. against Clearview AI, which compiled its database by scraping photos from social media and other online sources, later selling access to businesses, individuals, and government entities.

In 2022, Clearview AI settled a separate lawsuit in Illinois that also alleged privacy violations, agreeing to cease selling access to its facial recognition database to private businesses and individuals. However, this agreement permitted Clearview to continue collaborating with federal agencies and local law enforcement outside Illinois, which enforces stringent digital privacy laws. As part of the latest settlement, Clearview does not admit any liability.

“We are pleased to have reached an agreement in this class action settlement,” James Thompson, the company's attorney stated.

Lead plaintiffs’ attorney Jon Loevy described the settlement as a “creative solution” driven by Clearview AI's financial limitations. “Clearview lacked the necessary funds to provide fair compensation to the class, so we had to devise a creative approach,” Loevy stated. “The settlement allows those whose privacy was compromised to benefit from any future success of the company, effectively giving the class a share in the potential value of their own biometrics.”

It remains uncertain how many individuals will be eligible for the settlement. The agreement broadly includes anyone whose images or data are in Clearview’s database and who has resided in the U.S. since July 1, 2017.

As part of the settlement, a nationwide campaign will be launched to inform potential plaintiffs. Attorneys for both Clearview AI and the plaintiffs collaborated with Wayne Andersen, a retired federal judge who now mediates legal disputes, to craft the agreement. In the court filings, Andersen candidly stated that Clearview was financially incapable of paying a substantial legal judgment if the case proceeded.

“Clearview lacked the funds to satisfy a multi-million-dollar judgment,” Andersen noted in the filing. “In fact, there was significant doubt about whether Clearview could even sustain operations through the end of the trial, let alone cover a judgment.”

However, some privacy advocates and individuals involved in other legal actions criticized the settlement as inadequate, arguing it fails to alter Clearview AI’s operational practices. Sejal Zota, an attorney and Legal Director for Just Futures Law, which represents plaintiffs in a separate California lawsuit against Clearview, expressed disappointment with the agreement.

Zota criticized the settlement, saying it “legitimizes” Clearview AI. “It does not address the root of the problem,” Zota remarked. “Clearview gets to continue its practice of harvesting and selling people's faces without their consent and using them to train its AI tech.”