Clearview AI, a facial recognition start-up based in New York, has come up with a unique settlement offer in response to a class-action lawsuit accusing the company of invasion of privacy. Instead of offering cash payments to those affected, Clearview AI has proposed to give a 23 percent stake in the company to individuals whose faces are included in its massive facial recognition database.
The company made headlines in 2020 when it was revealed that Clearview AI had scraped billions of photos from various online sources such as social media platforms like Facebook, LinkedIn, and Instagram to create a powerful facial recognition app. This app has been utilized by numerous law enforcement agencies including police departments, the Department of Homeland Security, and the F.B.I.
Due to the costly nature of the ongoing litigation, Clearview AI and the plaintiffs found themselves in a challenging situation. The company was at risk of going bankrupt before the case could even go to trial. In light of these circumstances, lawyers for the plaintiffs proposed a creative solution – offering the class members a percentage of the company’s future value.
Individuals in the United States who have publicly posted photos of themselves online, which is almost everyone in today’s digital age, are considered part of the class eligible for the settlement. The proposed agreement would collectively grant the class a 23 percent stake in Clearview AI, which has been valued at $225 million. This would equate to approximately $52 million based on the current value of the company.
If Clearview AI goes public or is acquired in the future, those who have submitted a claim form would receive a portion of the proceeds. Alternatively, the class could choose to sell its stake. Another option would be for the class to receive 17 percent of Clearview’s revenue after a two-year period, which the company would be required to set aside for this purpose.
This innovative settlement offer aims to provide a way for those affected by Clearview AI’s actions to benefit from any potential future success of the company, rather than just receiving a one-time monetary compensation. It will be interesting to see how this proposal plays out and how the individuals involved in the class action lawsuit will choose to proceed with their stake in Clearview AI.