A federal judge in Chicago has greenlit an unconventional privacy settlement with Clearview AI—a company notorious for scraping billions of facial images off the internet—offering victims equity instead of compensation.
Rather than cutting checks to thousands of people whose biometric data was allegedly taken without consent, the deal grants them a potential 23% stake in the very company they sued.
Clearview AI, long criticized for its invasive facial recognition practices, had been accused of violating Illinois’ strict biometric privacy law. While the company denies any wrongdoing, the settlement ends a nationwide class-action lawsuit brought by as many as 125,000 people. No money will change hands—at least not yet.
Instead, the class will wait. If Clearview ever goes public or gets acquired, the victims could see a payout proportional to the company’s value at the time. With Clearview’s estimated worth hovering around $225 million, that could translate to a fund of roughly $51.75 million. Alternatively, a court official could force Clearview to cough up 17% of its revenue generated post-settlement—if nothing happens by September 2027.
The judge called the equity-based arrangement a “novel” solution under Illinois law and pushed back on those calling it too speculative. “It’s not an empty gesture,” she said, noting the deal could grow or shrink depending on Clearview’s performance.
While Clearview’s legal team praised the outcome as a win for everyone involved, not all parties were convinced. Twenty-two states and D.C. challenged the structure, particularly a hefty $39.1 million slated for the plaintiffs’ attorneys—nearly 40% of the potential payout. The judge dismissed these objections, saying such fee percentages were routine in complex cases of this scale.
The ruling may set a precedent for privacy lawsuits in the age of artificial intelligence, where the value of data often outweighs the damage done—and the money paid.
