Google has agreed to settle a class action lawsuit brought forth by shareholders out of court. The company will pay a settlement amount of $350 million to resolve the dispute. The case is related to a data breach on its now-defunct social media platform, Google+.
Google will pay $350 million to settle a class action lawsuit by shareholders
This class action lawsuit against Google originates from a data breach that occurred between 2015 and 2018. A software glitch allowed outside developers to access the personal data of hundreds of thousands of Google+ users. An estimated 500,000 users had their names, dates of birth, occupations, emails, and addresses exposed in the breach.
Google shareholders claimed that the company concealed the breach for months after discovering it in March 2018. The firm continued to stress its commitment to data security publicly but avoided disclosing the breach. An internal memo suggested it feared that going public about this data leak would lead to regulatory and public scrutiny, something akin to what Facebook received after the Cambridge Analytica scandal in 2018.
However, the data breach eventually came to light and a court found that Google deliberately delayed its disclosure. A wave of negative media reports followed, sending the company’s stock plummeting. The firm had tens of billions of dollars of market value wiped out in no time. Google denied any wrongdoing, arguing that there is no evidence of any data misuse. However, it couldn’t save itself from facing lawsuits.
The incident led to two class action lawsuits against the tech giant, one each from the affected users and company shareholders. Google settled the former lawsuit in 2020, agreeing to pay $7.5 million to Google+ users affected by the breach. It has now also agreed a settlement with the shareholders. Led by Rhode Island Treasurer James Diossa, the suit was brought by the US state, whose pension fund was an investor in Google.
The settlement requires approval by a US District Judge
A preliminary settlement filed earlier this week in San Francisco federal court states that people who purchased Google stock between April 23, 2018, and April 30, 2019, are eligible for a share of the settlement money. All eligible investors will receive an email notification. A website will also be created in due course to share more information, likely after the settlement is approved by US District Judge Trina Thompson.
Along with $350 million in the settlement amount, the shareholders’ lawyers may seek up to $66.5 million for fees, the court filing shows.”We regularly identify and fix software issues, disclose information about them, and take these issues seriously,” said Jose Castaneda, a Google spokesperson. “This matter concerns a product that no longer exists and we are pleased to have it resolved.”