Yahoo Agrees to Revised $117.5M Data Breach Class Action Settlement

Yahoo has now agreed to pay $117.5 million to resolve legal claims regarding three large data breaches that affected the internet company.

The settlement is a significant increase from the former proposed $50 million proposed settlement.

U.S. District Judge Lucy Koh rejected the $50 million settlement in January 2019 after finding issue with the “unreasonably high attorneys’ fees,” a lack of transparency about the fund, and lackluster requirements for Yahoo’s future cybersecurity efforts.

In the amended settlement, plaintiffs and Yahoo have reportedly agreed on “the biggest common fund ever obtained in a data breach case.”

Class Members will reportedly be able to collect reimbursement for out-of-pocket expenses as well as $25 per hour for up to 15 hours of time spent mitigating data breach damages.

Small businesses will also be able to collect payment from the settlement. If they paid for ad-free or premium email services, they may be able to collect up to 25 percent of the amount paid per year between Jan. 1, 2012 and Dec. 31, 2016. These payments will be capped at $500 per year.

The deal also includes credit monitoring or alternative compensation to the estimated 194 million Class Members.

The new settlement will also provide security improvements for Yahoo which will hopefully prevent widescale data breaches as seen in the past. These improvements reportedly include “significantly more concrete” commitments by Yahoo to their data security.

“As part of the amended settlement, [Yahoo successor] Oath will maintain an information security budget of more than $300 million over the next four years and a team headcount of 200, amounts that are at least four times and three times greater, respectively, than Yahoo maintained prior to this case,” the plaintiffs said in their motion for settlement approval.

The consolidated class action lawsuit brought claims about three separate data breaches than have affected Yahoo since 2013.

The 2013 breach reportedly affected personal private information from 3 billion Yahoo users, according to a 2017 statement by the company.

The second breach reportedly occurred in 2014 after a Yahoo employee fell for a “spear phishing” campaign that exposed 500 million user accounts.

The third breach reportedly spanned from 2015 to 2016. In this breach, hackers allegedly used forged cookies to access 32 million user accounts.

Plaintiffs in the consolidated class action lawsuit claimed that Yahoo failed to sufficiently protect their customers from data breaches. As a result of Yahoo’s alleged negligence, users were allegedly put at risk when they had their personal private information breached.

Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.

The consumers are represented by John Yanchunis of Morgan & Morgan Complex Litigation Group; Stuart A. Davidson of Robbins Geller Rudman & Dowd LLP; Gayle M. Blatt of Casey Gerry Schenk Francavilla Blatt & Penfield LLP; Ariana J. Tadler of Milberg Tadler Phillips Grossman LLP; Karen Hanson Riebel of Lockridge Grindal Nauen PLLP; and Daniel S. Robinson of Robinson Calcagnie Inc.

The Yahoo Data Breach Class Action Lawsuit is In re: Yahoo Inc. Customer Data Security Breach Litigation, Case No. 5:16-md-02752, in the U.S. District Court for the Northern District of California.

UPDATE: On July 20, 2019, a federal judge has preliminarily signed off on a $117 million class action settlement agreement between Yahoo and accountholders who were affected by numerous data breaches.

UPDATE 2: September 2019, the Yahoo data breach class action settlement is now open. Click here to file a claim. 

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