In 2022, Clearview settled a separate Illinois case by agreeing to stop selling database access to private businesses or individuals
Clearview AI, a facial recognition startup, reached a settlement on Friday in an Illinois lawsuit over its collection of facial images, which plaintiffs argue violated privacy rights. Attorneys estimate the deal could be worth over $50 million, but instead of a traditional payout, plaintiffs in the federal suit will receive a share of the company’s future value. Attorneys’ fees, estimated at $20 million, will come from the settlement amount.
Judge Sharon Johnson Coleman of the Northern District of Illinois gave preliminary approval to the agreement on Friday. The case consolidated lawsuits from across the U.S. against Clearview, which had pulled photos from social media and other internet sources to create a database sold to businesses, individuals, and government entities.
In 2022, Clearview settled a separate Illinois case by agreeing to stop selling database access to private businesses or individuals. However, it could still work with federal agencies and law enforcement outside Illinois, which has strict digital privacy laws.
Clearview does not admit any wrongdoing in this latest settlement. “Clearview AI is pleased to have reached an agreement in this class action settlement,” said James Thompson, an attorney for the company, in a written statement on Friday.
Lead plaintiffs’ attorney Jon Loevy described the agreement as a “creative solution” due to Clearview’s financial situation. “Clearview did not have anywhere near the cash to pay fair compensation to the class, so we needed to find a creative solution,” Loevy said. “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.”
It’s unclear how many people will be eligible to join the settlement. The agreement includes anyone in the U.S. whose images or data are in the company’s database starting from July 1, 2017. A national campaign to notify potential plaintiffs is part of the deal.
Clearview and the plaintiffs’ attorneys worked with Wayne Andersen, a retired federal judge who now mediates legal cases, to develop the settlement. In court filings, Andersen noted that Clearview could not have paid any legal judgment if the suit continued. “Clearview did not have the funds to pay a multi-million-dollar judgment,” he stated. “Indeed, there was great uncertainty as to whether Clearview would even have enough money to make it through to the end of trial, much less fund a judgment.”
Some privacy advocates and others pursuing legal action criticized the settlement. Sejal Zota, an attorney and legal director for Just Futures Law, which represents plaintiffs in a California suit against Clearview, said the agreement “legitimizes” the company. “It does not address the root of the problem,” Zota said. “Clearview gets to continue its practice of harvesting and selling people’s faces without their consent, and using them to train its AI tech.”
