Clearview AI offers Americans company stake as a settlement in lawsuit

Clearview AI, a company that makes facial recognition software, has agreed to an unusual settlement in a class action lawsuit in the United States. Instead of a sum of money, the plaintiffs are offered a share in the company.

The lawsuit was filed over Clearview AI's database. The company uses a database of 30 billion photos of people that it has collected online without permission for its software. Police services and other government services can use that database for a fee, for example to track down suspects.

Lawsuits were filed in several US states over the database. These have been bundled into one class action lawsuit in Chicago, where Clearview AI has now agreed to a striking settlement. The company offers the claimants a construction whereby they are entitled to a 23 percent interest in the company in the event of an IPO or sale, writes The New York Times. If the company has not been sold or listed on the stock exchange after two years, the plaintiffs are entitled to seventeen percent of Clearview AI's profits.

The plaintiffs' attorneys argue that a normal settlement amount would lead to Clearview AI's bankruptcy. The claimants may then be left empty-handed. The judge must still agree to this alternative settlement.

The unlawful use of the collected photos and violations of privacy have already led to high fines in several countries. For example, in May last year the French regulator imposed a penalty of 5.2 million euros. The company also received fines in Italy, Great Britain and Greece, among others.