Yahoo! Inc. has agreed to pay $80 million to settle a class action alleging it failed to disclose four data breaches that affected 3 billion customers.
The proposed agreement, if approved by the court, would mark the first significant settlement to date of a securities fraud class action filed in response to a data breach, Jonathan Meyer, a cybersecurity attorney and partner at Sheppard Mullin Richter & Hampton LLP in Washington, told Bloomberg Law March 6.
Approval of the settlement may not mean the end of the case, however. One of the named plaintiffs in the lawsuit didn’t agree to the settlement, according to a Jan. 23 court document. The plaintiffs March 2 filed the proposed settlement, the same day that Yahoo moved to dismiss an amended complaint.
Yahoo shareholders filed the class action under federal securities law in January 2017. Eight similar class actions against other companies, alleging that data breaches or system vulnerabilities led to falling stock prices, have followed, Bloomberg Law data show. Two of the suits have been voluntarily dismissed, and the rest are ongoing.
The agreement indicates that under the right circumstances, defendants of these types of lawsuits may be willing to settle, Meyer said.
Attorneys for Yahoo and the plaintiffs didn’t immediately respond to Bloomberg Law requests for comment.