A year ago, Microsoft’s M12 venture division invested in a $74 million series A funding round for Israeli facial-recognition company AnyVision. The company’s involvement as a minority investor drew criticism because the way the startup used its technology was in conflict to Microsoft’s own principles around facial recognition.

Microsoft took the criticism on board and announced last November it would audit AnyVision. It seems the company agreed with protestors of the investments and M12 has now divested its stake in the controversial company.

Furthermore, Microsoft says it won’t make any future investments in AnyVision.

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Even when making the initial investment last year, Microsoft said it was subject to AnyVision complying“with its six ethical principles to guide its facial recognition work: fairness, transparency, accountability, nondiscrimination, notice and consent, and lawful surveillance.”

AnyVision was accused of using its technology to spy on Palestinians on the West Bank. Microsoft worked with US Attorney General Eric Holder at law firm Covington & Burlington to get to the bottom of the matter.

Audit

The Israeli startup denied its technology was used for spying and Holder’s investigation held up that claim.

“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. As such, Covington could not substantiate a breach of the Microsoft Global Finance Portfolio Company Pledge on Facial Recognition,” Covington said.

However, Microsoft says it decided to remove its investment in the company regardless. The company points to a change in its policies that prevents any investment for a company that sells facial recognition technology.

Nonetheless, Microsoft has decided to divest its minority stake in AnyVision and updated its investment policy to end minority investments in any company that sells facial-recognition technology.

“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,” M12 said in a statement.

“By making a global change to its investment policies to end minority investments in companies that sell facial-recognition technology, Microsoft’s focus has shifted to commercial relationships that afford Microsoft greater oversight and control over the use of sensitive technologies.”

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