Yahoo strikes $159m settlement over data breach, Latest Business News

Yahoo reaches $117M settlement with 3 billion customers hacked in data breach exposed in 2016

Yahoo Proposes $117.5 Million Settlement in Data Breach Suit

The revised figure of $117.5 million has been made in response to criticism made by US Judge Lucy Koh concerning an earlier figure of $50 million, proposed in October 2018.

She rejected the original back in January after expressing concerns that it might not be "fundamentally fair, adequate and reasonable", as it didn't specify how much victims could expect to recover.

The new settlement amount includes at least $55 million for victims' out-of-pocket expenses and other costs, plus $24 million for two years of credit monitoring, up to $30 million assigned to legal fees.

The breaches, which occurred between 2013-2015, put personal information of all Yahoo users at risk - to the point where every user was encouraged to change their password. A further $8.5 million was set aside in the settlement for other expenses.

It reportedly covers 194 million users in the U.S. and Israel with around 896 million accounts.

John Yanchunis, a lawyer for the plaintiffs, in a court filing, called the $117.5m (£89.7m) settlement the "biggest common fund ever obtained in a data breach case", Reuters reported.

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This settlement would also see Verizon, Yahoo's parent company, up its spending on security to $306 million between 2019 and 2022.

As a reminder, Verizon was originally supposed to acquire Yahoo for $4.83 billion, but the amount was reduced to $4.48 billion after Yahoo revealed more information about the breaches. It also pledged to quadruple Yahoo's staffing in that area.

"We believe that the settlement demonstrates our strong commitment to security", Verizon said in a statement.

US prosecutors charged two Russian intelligence agents and two hackers in connection with one of the breaches in 2017.

"On average that is $25 per compromised account, an embarrassingly modest compensation for breach of your privacy and stolen personal data", says Kolochenko. The company faced a class action lawsuit.

"Otherwise, the settlement conveys an illusory message of relatively modest penalties for negligent data protection", he added.

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