Facial recognition company Clearview AI reached a preliminary settlement in a class action lawsuit alleging it violated the Illinois Biometric Privacy Act, with the company agreeing to compensate victims with a stake in the company.

The unique structure of the preliminary settlement, filed Wednesday in U.S. District Court for the Northern District of Illinois, requires Clearview to pay victims a stake in a future initial public offer, liquidation, or sale. U.S. District Judge Sharon Coleman for the Northern District of Illinois approved the settlement in a preliminary order Friday. 

Attorneys for the plaintiffs estimated a $50 million payout to compensate victims, whose initial lawsuit was spurred by a 2021 New York Times story.

The details: In 2021, a NY Times report chronicled Clearview’s scraping of publicly available images on websites like Facebook, Venmo, and millions of others, according to the settlement agreement.

In 2020, more than 600 law enforcement agencies and a handful of private companies started using Clearview for security purposes, according to the lawsuit.

The Illinois Biometric Privacy Act prohibits the collection of individuals’ biometric information like facial geometry without consent.

Since 2020, Clearview has been fined more than $70 million in Europe for widespread violations of the General Data Protection Regulation, including in France, Greece, the United Kingdom, and Italy.

In the U.S., the company also faces a separate lawsuit by the American Civil Liberties Union.

These ongoing and past financial liabilities “led the sides to seek a creative solution by obtaining for the class a percentage of the value Clearview could achieve in the future,” the settlement stated.

The plaintiffs’ attorneys did not immediately respond to a request for comment.

Company reponse: “Clearview AI is pleased to have reached an agreement in this class action settlement,” the company said in an emailed statement. 

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Jeff Dale is Managing Editor, Editorial Projects and Analytics, at Compliance Week. He previously served as Compliance Week's Digital Editor and has worked as a copy editor at the Boston Herald and city editor at The Hour Publishing Co. in Norwalk, Conn.View full Profile

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