Clearview AI Settles Privacy Invasion Lawsuit with 23% Company Stake for Database Users

In a groundbreaking resolution, Clearview AI, a facial recognition start-up, has reached an agreement in a class-action lawsuit over privacy invasion allegations. The company, headquartered in New York, has opted for an unconventional settlement approach, offering affected Americans a 23 percent ownership in the firm instead of traditional monetary compensations.

Clearview AI garnered an extensive database by scraping billions of images from various online sources such as Facebook, LinkedIn, and Instagram. This compilation was utilized to develop a facial recognition application widely utilized by numerous law enforcement entities including thousands of police departments, the Department of Homeland Security, and the F.B.I.

Legal Proceedings and Financial Implications

Following the exposure of Clearview AI in 2020 by The New York Times, a series of lawsuits were initiated nationwide. Subsequently, these legal actions were consolidated into a class-action lawsuit in federal court in Chicago. The litigation has inflicted substantial financial strain on Clearview AI, with court documents suggesting a potential bankruptcy scenario before the case could progress to trial.

Legal representatives for the plaintiffs, from Loevy + Loevy in Chicago, acknowledged the precarious position of both Clearview AI and the suing parties, describing them as being "trapped together on a sinking ship." Consequently, the proposal for a non-traditional settlement aimed at granting the affected class a stake in the future value of Clearview AI.

These circumstances led to the innovative resolution, providing a distinctive and unprecedented outcome for the settlement of the class-action lawsuit, setting a unique precedent for future cases involving privacy breaches and technology companies.