If Clearview AI scanned your face, you may get equity in the company

Clearview AI, a controversial facial recognition company, has reached an unusual settlement in a class action lawsuit, as reported by The New York Times. Instead of paying cash, Clearview AI has agreed to provide a 23 percent stake in its company to any Americans in its database. The company faces the risk of bankruptcy without this settlement, according to court documents.

If you reside in the US and have ever shared a photo of yourself publicly online, you may be eligible to be part of the class action. The settlement could total at least $50 million, as per court documents, pending approval from a federal judge.

Backed by billionaire Peter Thiel, Clearview AI claims to have amassed over 30 billion images in its database. This data can be accessed and cross-referenced by numerous law enforcement agencies, including the US FBI and Department of Homeland Security.

Following the exposure of its practices, Clearview faced legal action in various states such as Illinois, California, Virginia, and New York, which were consolidated into a class action suit in a federal Chicago court. The costs of litigation have been depleting the company’s funds, prompting the need for a creative settlement approach.

The relatively modest sum divided among the potentially large number of database users indicates that individuals may not receive a substantial payout. Any distribution of funds would only occur if the company goes public or undergoes acquisition. Legal fees could consume up to 39 percent of the settlement, reducing the final amount to around $30 million. If a third of Americans are in the database (approximately 110 million people), each person would receive about 27 cents.

This raises the question of whether it is worthwhile to receive a meager amount to witness the downfall of one of the most controversial companies in history. Clearview AI has faced a series of challenges, including:

• Being sued by the ACLU in 2024, leading to an agreement to cease sales of its biometric database to private US companies

• Receiving a €20 million fine from Italy in 2022 and being prohibited from using images of Italians in its database

• Facing complaints from privacy groups in Europe for alleged privacy law violations in 2024

• Being fined £7.55 million by the UK’s privacy watchdog and instructed to delete data of any UK residents

• Having the LAPD ban the use of its software in 2024

• Being impacted by the EU’s prohibition on untargeted facial scraping, effectively restricting its operations in Europe earlier this year