Pushback against facial-recognition tech is spilling into shareholder meetings

An ACLU-led group's proposal for Microsoft to ban facial-recognition was rejected by shareholders yesterday.
article cover

Chesnot/Getty Images

· 4 min read

Yesterday, an ACLU–led group of activists proposed a big question at Microsoft’s annual shareholder meeting: Should the tech giant bow out of selling facial-recognition technology to government entities worldwide?

At the meeting, the group presented a shareholder proposal that demanded the company stop selling facial-recognition tech to governments. The proposal didn’t pass—and would have been non-binding, even if it had passed—but it highlights yet another dimension of activist pushback against facial-recognition tech, which research shows is biased against people with darker skin tones.

The cease-sales pitch

Behind the proposal is the Tech Equity Coalition, a group of civil rights and civil liberties organizations representing communities “historically targeted by surveillance” and convened by the ACLU of Washington. The TEC co-presented the proposal with Harrington Investments, an investment and shareholder advocacy group that has helped persuade publicly traded companies to increase economic, social, and environmental efforts.

The ACLU of Washington has also backed similar proposals for Amazon in the past.

Three speakers, allotted one minute each, were tasked with making the cease-sales pitch to shareholders: Jennifer Lee of ACLU Washington, Savannah Sly of the Sex Workers Outreach Project Behind Bars, and Stan Shikuma of the Japanese American Citizens League.

“In 2020, after the murder of George Floyd, a number of tech companies—Microsoft, Amazon, and IBM—all placed different types of moratoria on sale of face recognition to police,” Lee, tech and liberty project manager for the ACLU Washington, told us. “But those self-imposed moratoria were limited and were contingent upon different factors, and some of those moratoria were unclear to which government entities they were and were not selling to.”

The preliminary vote count shows a decisive rejection, with the proposal receiving just 4% of the votes. The ACLU expects to have an official vote count next week. For context, shareholder proposals are tools favored by activist investors looking to spark change in a company’s practices. They’re usually opposed by management and often fail, but with enough support from key shareholders, they can pass.

Microsoft’s key shareholders include not only Microsoft execs (Satya Nadella, Bradford Smith, Jean-Philippe Courtois), but also a host of investment firms including Vanguard, BlackRock, and State Street. Lee told us she’d spoken with Vanguard and State Street ahead of the shareholder meeting.

Stay up to date on emerging tech

Drones, automation, AI, and more. The technologies that will shape the future of business, all in one newsletter.

Back in 2020, following announcements from IBM and Amazon, Microsoft said it would not sell facial-recognition tech to US police departments until federal regulations were put in place, and the company has remained committed to the moratorium. But in the tech giants’ stead, smaller startups have popped up to fill the gap in sales of the tech.

“A passage of this kind of proposal would send a clear message that Microsoft does not condone use of racially biased, inaccurate, harmful, and privacy-invasive face recognition technology by government entities,” Lee said.

In a statement representing Microsoft and its board, Hossein Nowar—Microsoft’s CVP, general counsel, and corporate secretary—said the company has made “extensive public commitments” to restrict sales of the tech based on human rights considerations, called for regulation, and adopted guiding principles.

“This proposal does not recognize those commitments and would impose a blunt prohibition that would deny public agencies the ability to deploy facial recognition technology in beneficial ways,” Nowar added. “There is no one-size-fits-all approach to facial recognition technology. Different use cases have different risk profiles, and safeguards need to be calibrated accordingly.”

Still, the pressure to outright ban government use of facial recognition is growing, and there is past precedent for activists pushing a big tech company—Microsoft, in fact—to reassess their practices. In 2020, Microsoft divested from AnyVision, an Israeli facial-recognition startup, after allegations that it was helping the Israeli government surveil the West Bank.

And on the regulatory side, at least 24 US jurisdictions to date have now banned government use of facial-recognition technology, Lee said—including Washington’s King County, the headquarters of both Microsoft and Amazon. Federal facial-recognition legislation has also been re-introduced, but it’s been stalled since June, when it was referred to the Committee on the Judiciary.

Stay up to date on emerging tech

Drones, automation, AI, and more. The technologies that will shape the future of business, all in one newsletter.