Facial Recognition Startup Clearview AI Reaches Settlement in Privacy Lawsuit

In a groundbreaking settlement, facial recognition startup Clearview AI has agreed to pay out more than $50 million in a lawsuit alleging privacy violations due to its massive collection of images. This unique agreement gives plaintiffs a share of the company’s potential value, rather than a traditional payout, with attorneys’ fees estimated at $20 million coming out of the settlement amount.

The case, consolidated from lawsuits across the U.S., accused Clearview of pulling photos from social media and the internet to create a database sold to businesses, individuals, and government entities. While the company settled a separate case in 2022, agreeing to stop selling access to its database to private entities, it could still work with federal agencies and law enforcement outside of Illinois.

Despite not admitting any liability, Clearview AI expressed satisfaction with the settlement agreement. Lead plaintiffs’ attorney Jon Loevy called it a “creative solution” given the company’s financial status, allowing victims of privacy breaches to participate in any potential upside generated.

The agreement is sweeping, potentially including anyone in the U.S. whose images or data are in Clearview’s database since July 1, 2017. A national campaign will notify potential plaintiffs, with retired federal judge Wayne Andersen mediating the settlement. Andersen noted that Clearview could not have paid a multi-million-dollar judgment if the suit went to trial.

However, some privacy advocates and individuals pursuing legal action against Clearview view the settlement as a disappointment, as it does not address the company’s operations. Sejal Zota, legal director for Just Futures Law, representing plaintiffs in a California suit, criticized the agreement for legitimizing Clearview’s practices of harvesting and selling people’s faces without consent.

The settlement raises important questions about the intersection of technology, privacy, and legal accountability. As facial recognition technology continues to advance, it is crucial for companies like Clearview AI to prioritize ethical practices and respect individuals’ privacy rights.