Filing: Clearview AI proposes settling a class action lawsuit by collectively giving a 23% stake, worth ~$52M, to Americans whose faces are in its database
https://arstechnica.com/... h/t @Nonya_Bidniss Evan Greer / @evangreer@mastodon.online : I spoke with the NYT about why giving people harmed a stake in Clearview AI is not a solution. — #FacialRecognition surveillance should be banned. It doesn't matter who owns the company doing it. — https://www.nytimes.com/... X: Jake Snow / @snowjake : The rules governing surveillance tech must take into account that the police don't follow the rules. Luis Montezuma / @montezumachavez : Clearview AI, Inc., Consumer Privacy Litigation The Settlement Agreement before the Court, if approved, will resolve twelve class actions filed. Specifically, Plaintiffs allege that Clearview unlawfully collected their biometric facial geometry by “scraping” their photos. [image] @kashhill : An Indiana police officer resigned after misuse of Clearview AI https://www.courierpress.com/ ... [image] Dr Grace Peng / @gspeng : AI illegally scraped everyone's photos on the internet. Lost lawsuit, claims they can't pay the settlement. Instead, they are offering equity in their company from those they harmed. So victims will have an interest in seeing them financially succeed in stealing more content. Wtf @kashhill : Clearview is currently valued at $225 million says mediator, who reviewed confidential financial documents. So the class's stake would be around $52 million at the current value. Lawyers would get “no more than 39.1%” of that. Judge still needs to approve the settlement. @kashhill : Jay Edelson, who has waged many a class action lawsuit against tech companies, including Clearview AI, said the proposed settlement had an “ick factor.” People who objected to what Clearview did would now have a financial interest in the company doing more of it. @kashhill : It's an interesting proposed remedy for an AI company that scraped a ton of data from the internet without anyone's consent. What if courts across the land wound up granting all of us equity in all the companies that have pushed out generative AI products? @kashhill : Clearview AI doesn't have enough money to pay a settlement in the federal class action lawsuit in Illinois. Instead it would offer the class — every American who has a public photo on the Internet, so basically everyone — a 23% stake in the company. https://www.nytimes.com/... Mike Swift / @swiftstories : Interesting to see what settlement is! I've never seen a #privacy class action settlement like this one, will be fascinating to see if Judge Sharon Johnson Coleman goes for it. How soon will Clearview's IPO be, I would ask. https://www.ilnd.uscourts.gov/ ... Mike Swift / @swiftstories : Controversial #facialrecognition startup #ClearviewAI has reached what plaintiffs told a federal judge in Chicago is a “unique” and “creative” deal to settle #BIPA #privacy litigation for 23% of @clearviewai value in an IPO, or an estimated $52 million, @mlexclusive reported [image] Mike Swift / @swiftstories : Settlement would allow class to opt for “cash demand” settlement based on 17% of Clearview's GAAP revenue over a multiyear period. Filing said #Clearview was valued at $225M in a 3rd-party valuation earlier this year. So 23% of that would be $51.75M. https://content.mlex.com/... LinkedIn: Axel C. : CLEARVIEW AI scraped billions of faces to train its model and is now offering a 23% stake in the company to settle a class-action lawsuit ✨😮 … Forums: Hacker News : Clearview AI Used Your Face. Now You May Get a Stake in the Company r/Indiana : Cop busted for unauthorized use of Clearview AI facial recognition resigns
Context & Ripple Effects
The dispute grew from allegations that Clearview scraped Illinois residents’ online photos and sold facial-recognition access without consent, following the ACLU’s Illinois privacy lawsuit. It later accepted limits on sales to most U.S. businesses in an ACLU settlement, while its database and police-use ambitions remained central to scrutiny.
The new filing tries to resolve twelve class actions through an ownership interest rather than a conventional fixed cash pool. That matters because it ties claimant recovery to Clearview’s future value, even as the proposal still awaits judicial approval.
First-order effects
- If approved, class members would collectively receive a 23% equity stake; those choosing the alternative demand settlement would instead have claims tied to a share of future GAAP revenue over multiple years.
- Clearview could close twelve pending class actions without an immediate all-cash payout, but would dilute existing owners and add a large claimant group with an economic interest in the company. Plaintiffs’ lawyers would receive up to 39.1% of the class stake.
Second-order effects
- The proposal gives biometric-privacy plaintiffs and defendants a closely watched template for using contingent equity or revenue rights when a private company’s cash position is contested; court approval will determine whether that template is usable.
- A settlement that changes ownership does not itself narrow the underlying police-use and data-collection issues. Clearview’s prior expansion of its image database and police-search tools leaves governance pressure focused on how the system is deployed, not only who receives compensation.
Third-order effects
- If courts accept equity-based redress in data-rights cases, the practical remedy for mass privacy harms may increasingly depend on a company’s eventual liquidity and valuation rather than a prompt, equal cash payment.
- The case underscores a durable divide between compensating people after data collection and imposing ex ante limits on surveillance technology; the latter remains the relevant policy lever where downstream use creates public-safety risks.
The trend: Biometric-privacy litigation is testing whether financial remedies can meaningfully address surveillance-data harms when the contested asset is a privately held AI company’s growing database and future revenue.