Financial Markets


Clearview AI, a controversial facial recognition start-up at the center of a national privacy debate, is considering giving a 23% stake in the company to the people whose faces are in its database. The bold proposal is part of a settlement in a class-action lawsuit that accuses Clearview AI of violating privacy laws by scraping billions of images from the internet and social media sites to create a facial recognition tool intended for law enforcement and other agencies.

The inception of the class-action lawsuit was triggered by an exposé from The New York Times in early 2020, which laid bare the company's secret existence and extensive gathering of online personal data without the explicit consent from the individuals involved. Since then, Clearview AI has been steeped in legal battles, with the damages potentially plunging the start-up into financial jeopardy and possible bankruptcy before the case could even reach trial.

Under the proposed terms of the settlement, practically every US citizen who has an image of themselves posted online could potentially be included as a member of the class. Furthermore, should Clearview AI go public or become absorbed by another company, individuals who filled and submitted a claim form to the class-action lawsuit would be entitled to a portion of the proceeds.

The class also reserves the right, under these proposed terms, to sell its 23% stake in the company or alternatively choose to reclaim 17% of Clearview's revenue after a two-year period. According to current valuations, Clearview AI sits at an estimated worth of $225 million. This would make a 23% stake roughly valued at $52 million.

This groundbreaking proposal not only provides recompense for Clearview's use of people's personal data, but if approved could serve as a blueprint for future lawsuits involving companies implicated in mining data without consent. The implications for the tech and social media industries could be extensive and far-reaching. The settlement suggests a possible new frontier where the ownership and monetization of personal data shifts power — and perhaps a significant chunk of the wealth — away from secretive start-ups and big tech companies, back to the hands of the everyday individuals who are often unaware that their faces and personal information are part of a vast, shadowy data economy.

While the proposal remains to be approved and there are still several legal twists and turns to explore, this development is an emerging story of how an obscured invasion of privacy could potentially catalyze an historic redefinition of personal data ownership. This leads to profound questions about the relationship between tech companies and the people they rely on for their data-dependant operations.

What happens in the Clearview AI lawsuit could set the tone for the data privacy discussion in the coming years, perhaps even shaping the evolution of our data-driven economy. This case underlines the urgent need for a comprehensive legal framework that not only restricts unwarranted data collection but possibly recognizes personal data as a property right. If personal data becomes a defining currency of the future, understanding its ownership, value, and rights attached are increasingly crucial.