Clearview AI Gets Settlement Approved in Face-Scan Privacy Case

Clearview AI received final judicial approval for a settlement that provides a 23% equity stake in the company to a class of consumers who alleged the facial recognition company improperly used people’s likenesses without consent.

Approving the deal Thursday, Judge Sharon Johnson Coleman of the US District Court for the Northern District of Illinois estimated that the settlement stake was worth $51.75 million, based on a $225 million valuation from January 2024.

“Granted, the nature of an equity stake is that it could shrink or grow depending on the performance of the company,” Coleman said in her order. But “Clearview is bullish about the company’s potential growth based on the available market,” she said.

And absent the agreement, it wasn’t clear whether Clearview could pay out millions as part of a judgment, or had the funds to make it through a trial, according to a retired judge who facilitated settlement negotiations.

Clearview reached the settlement to resolve consolidated lawsuits alleging the company violated the Illinois Biometric Information Privacy Act by scraping billions of online photos and putting them into a facial recognition database.

The agreement calls for appointing a supervisor with the right to inspect Clearview’s finances and sell the stake, in which class counsel would also share, to a third party in order to protect the interests of the settlement class.

Coleman deemed the settlement fair, reasonable, and adequate over policy objections from 22 states and the District of Columbia, as well as advocacy groups.

The court also rejected objections to the settlement’s lack of injunctive relief, saying Clearview’s separate 2022 agreement with the American Civil Liberties Union already effectively limited its “clientele to federal and state government agencies and their contractors,” and placed a five year ban on business in Illinois.

The settlement class—which includes a nationwide class as well as subclasses of consumers in Illinois, California, New York, and Virginia—is expected to include 125,000 members.

The company itself is privately owned; an initial public offering is one of the triggers that would finance the settlement fund, in addition to a liquidation, the court said.

Loevy & Loevy leads the law firms representing consumers. Lynch Thompson LLP represents Clearview AI.

The case is In Re: Clearview AI, Inc., Consumer Privacy Litigation, N.D. Ill., No. 1:21-cv-00135, 3/20/25.