In a recent development, the facial recognition startup Clearview AI has reached a settlement in an Illinois lawsuit that alleged its extensive collection of faces violated privacy rights. The settlement, estimated to be worth over $50 million, is a unique agreement that offers plaintiffs a share of the company’s potential value rather than a traditional payout. Additionally, attorneys’ fees are expected to amount to $20 million, which will be deducted from the settlement. Judge Sharon Johnson Coleman of the Northern District of Illinois granted preliminary approval to the agreement, marking a significant step in the legal proceedings.

The case, which consolidated lawsuits from across the United States, involved allegations that Clearview AI harvested photos from various online sources to create a database that it then sold to businesses, individuals, and government entities. While the company settled a separate case related to privacy violations in Illinois in 2022 and agreed to cease selling access to its database to private entities, it retained the ability to work with federal agencies and law enforcement outside of Illinois due to the state’s stringent digital privacy laws. It is important to note that Clearview AI did not admit any liability as part of the latest settlement agreement.

Attorneys representing Clearview AI and the plaintiffs collaborated with Wayne Andersen, a retired federal judge mediating the case, to craft the settlement agreement. Andersen emphasized in court filings that Clearview AI lacked the financial resources to pay a potentially massive legal judgment, highlighting the uncertainty surrounding the startup’s financial stability. While some view the agreement as a creative solution given Clearview’s financial constraints, others, including privacy advocates and individuals pursuing legal action against the company in separate cases, have expressed disappointment. Sejal Zota, an attorney and legal director for Just Futures Law, stated that the agreement fails to address the core issues concerning Clearview AI’s operations, suggesting that it merely legitimizes the company’s actions.

Scope of the Settlement

The terms of the settlement encompass individuals whose images or data are present in Clearview AI’s database and who resided in the United States beginning July 1, 2017. The agreement includes provisions for a national campaign to notify potential plaintiffs and encourage their participation in the settlement. While the specific number of eligible individuals remains unspecified, the inclusive language of the agreement suggests a broad scope in terms of affected parties.

Overall, the resolution of the Clearview AI lawsuit through a unique settlement agreement has sparked mixed reactions within the legal community and among privacy advocates. While some commend the innovative approach taken to address the company’s financial limitations, others remain skeptical about the long-term implications for data privacy and accountability in the facial recognition industry. As technology continues to advance, the legal and ethical considerations surrounding data privacy and facial recognition will undoubtedly remain at the forefront of public discourse.


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