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Controversial facial recognition company Clearview AI has agreed to an unusual settlement in a class action lawsuit. The New York Times Instead of paying cash, the company is reportedly offering 23% of its stock to Americans listed in its database. Without a settlement, Clearview could face bankruptcy, according to court documents.
If you live in the US and have ever published photos of yourself online, you could be subject to a class action lawsuit. Court documents say the settlement could be worth at least $50 million, but it must be approved by a federal judge.
Clearview AI, which is backed by billionaire Peter Thiel, claims to have more than 30 billion images in its database that can be accessed and cross-referenced by thousands of law enforcement agencies, including the FBI and the Department of Homeland Security.
Shortly after its identity was exposed, Clearview was sued by states including Illinois, California, Virginia and New York, which were consolidated into a class action lawsuit in federal court in Chicago. The legal costs have reportedly drained the company’s coffers, forcing it to seek creative ways to settle the cases.
Dividing that relatively small amount by the large number of people who could be in the database doesn’t add up to a windfall. In any case, the report says, the profits would only come if the company goes public or is acquired. If that happens, the lawyers could get up to 39 percent of the settlement, reducing the final figure to about $30 million. For a third of Americans in the database (about 110 million people), that works out to about 27 cents per person.
It then begs the question whether it’s worth a little over 25 cents to see one of the creepiest companies of all time go under. Here are some of the lawsuits that have been taken against the company (in addition to the US class action lawsuit):
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The company was sued by the ACLU in 2020 (as part of the settlement, Clearview agreed to permanently stop selling its biometric database to private companies in the United States).
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Italy has fined the company 20 million euros in 2022 and banned it from using images of Italians in its database.
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European privacy groups file complaints over alleged breaches of privacy laws (2021)
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Britain’s privacy watchdog fined the company £7.55 million and ordered it to delete the data of all UK residents.
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The Los Angeles Police Department banned the software in 2020.
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Earlier this year, the EU banned the indiscriminate scraping of facial images from the web, effectively blocking Clearview’s business model in Europe.