Yahoo Proposes $117.5 Million Settlement in Data Breach Suit

Yahoo Proposes $117.5 Million Settlement in Data Breach Suit

Almost 200 million people who had sensitive information snatched from their Yahoo accounts will receive two years of free credit-monitoring services and other potential restitution in a legal settlement valued at $117.5 million. Now, per Bloomberg, Judge Lucy Koh in the U.S. District Court for the Northern District of California, has ruled that the original settlement was not "fundamentally fair, adequate and reasonable". It is not a solicitation to make any exchange in commodities, securities or other financial instruments.

According to reports, the new settlement includes at least $55 million for victims' out-of-pocket expenses and other costs, $24 million for two years of credit monitoring, up to $30 million for legal fees, and up to $8.5 million for other expenses.

Yahoo didn't begin to disclose the extent of its security breakdown until 2016 amid an FBI investigation that eventually linked some of the hacking to Russian Federation.

This proposal is Yahoo's second attempt to settle a series of data breaches that occurred between 2013 and 2016.

It reportedly covers 194 million users in the United States and Israel with around 896 million accounts. Fun fact: that's around a third of the discount Verizon managed to get on Yahoo's sale price after the extent of the security fudge up was revealed to the world.

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Separately, Verizon agreed to spend $306 million between 2019 and 2022 on information security, five times what Yahoo spent from 2013 to 2016.

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.

"We believe that the settlement demonstrates our strong commitment to security", a Verizon Media spokesperson told CNN Business.

Verizon has since written off much of the almost $4.5 billion price for the Yahoo acquisition in sign of the eroding value of that business.

High-Tech Bridge CEO, Ilia Kolochenko, argued that the pay-out of around $25 per compromised account amounted to an "embarrassingly modest compensation", although was not unusual in offering more to the attorneys than the victims. Otherwise, the settlement conveys an illusory message of relatively modest penalties for negligent data protection.

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