Microsoft sells stake in Israeli facial recognition company

Microsoft’s venture capital arm, M12, invested in AnyVision as part of a $74 million funding round in June 2019.

Microsoft has announced plans to divest its shareholding in the Israeli facial recognition company AnyVision following an investigation of the company by former United States Attorney General Eric Holder.

Microsoft’s venture capital arm, M12, invested in AnyVision as part of a $74 million funding round in June 2019.

Holder and his team at the law firm Covington & Burling conducted an audit of AnyVision starting in October 2019 after NBC News and other news outlets including Forbes and Israeli business publication TheMarker reported that the facial recognition startup was surveilling Palestinians throughout the West Bank.

In a summary of the findings, published Friday, Covington & Burling said that the technology is used at border crossing checkpoints between Israel and the West Bank, but noted that “available evidence demonstrated that AnyVision’s technology has not previously and does not currently power a mass surveillance program in the West Bank that has been alleged in media reports.”

The law firm said it spoke to employees and third parties, and reviewed accounting records and other evidence to reach its conclusion. It acknowledged that the review was “limited in certain respects by legal restrictions on the disclosure of sensitive information.”

NBC News reported in October 2019 that AnyVision’s technology has powered a classified military surveillance project that has monitored Palestinians in the West Bank. The project was so successful that AnyVision won Israel’s top defense prize in 2018 for preventing “hundreds of terror attacks” using “large amounts of data.”

Human rights activists argued that AnyVision’s work monitoring Palestinians in the West Bank was incompatible with its public statements about ethical standards for facial recognition technology.

“After careful consideration, Microsoft and AnyVision have agreed that it is in the best interest of both enterprises for Microsoft to divest its shareholding in AnyVision,” said Microsoft in a statement. “For Microsoft, the audit process reinforced the challenges of being a minority investor in a company that sells sensitive technology, since such investments do not generally allow for the level of oversight or control that Microsoft exercises over the use of its own technology.”

Microsoft also announced a global change to its investment policy to end minority investments in companies that sell facial recognition technology to give the company “greater oversight and control over the use of sensitive technologies,” according to a statement released Friday.