Clearview AI is facing a proposed settlement in a biometric data privacy lawsuit that would grant plaintiffs a 23% stake in the company. Judge Sharon Johnson Coleman expressed concerns about Clearview’s opt-out policy and the company’s financial struggles. Some plaintiffs are opposed to accepting equity from Clearview, preferring the company be held accountable, potentially through bankruptcy. The outcome of this case remains uncertain as the court deliberates on the settlement.
A U.S. district judge is currently reviewing a proposed settlement agreement between Clearview AI and a group of plaintiffs involved in a biometric data privacy lawsuit. This unique settlement would allocate a 23% stake in Clearview to the plaintiffs, represented by attorney generals from 22 states and the District of Columbia. However, there are uncertainties regarding the approval of this settlement.
During the hearing, District Judge Sharon Johnson Coleman expressed ambivalence about the case, acknowledging the considerable effort that has gone into it. She raised concerns over Clearview’s opt-out policy, which necessitates users to submit facial photos to remove their images from the company’s database, indicating that it creates a problematic dilemma for individuals.
Several individuals from the plaintiff class voiced their hesitation about accepting equity from Clearview, arguing that this conflicting incentive could undermine their goal of holding the company accountable. They suggested that an outcome leading to Clearview’s bankruptcy would be more desirable.
Bankruptcy risks are highlighted in legal filings, stating that Clearview lacks sufficient financial resources to afford a significant settlement, mainly due to litigation costs. A Clearview representative characterized the company’s financial state as one typical of a startup, with existing revenue that has not yet reached explosive growth levels.
Comparatively, a plaintiffs’ lawyer argued that the proposed 23% stake is substantial when stacked against settlements received from larger companies like Google and Meta, which yielded just 0.1% and 1%, respectively, of their valuation in similar cases. For Clearview, with an estimated valuation of $225 million, the 23% stake could equate to approximately $31 million for the settlement class after deductions for attorneys and main plaintiffs.
Vermont Assistant Attorney General Sarah Aceves indicated that although their previous lawsuit against Clearview was unsuccessful, it may not be the last attempt to hold the company accountable for its practices.
The ongoing legal proceedings regarding Clearview AI revolve around a proposed settlement that could give plaintiffs a 23% stake in the company. Concerns persist about the implications of Clearview’s opt-out policy on privacy rights. Many plaintiffs prefer bankruptcy over accepting company equity, highlighting the financial struggles faced by Clearview. The court’s decision on the settlement is awaited, as it promises to set a precedent for biometric privacy litigation.
Original Source: www.biometricupdate.com
