Lenovo Group Ltd. can move ahead with an $8.3 million settlement to end a class action that its ad software exposed customer laptops to performance, privacy, and security problems.
The U.S. District Court for the Northern District of California granted initial approval of the settlement Nov. 21, four months after Lenovo and the consumer class filed with the court to end the spyware action. The SuperFish software, which Lenovo began installing in 2014, could access customer Social Security numbers, financial data, and sensitive heath information, the court said.
Lenovo’s issues highlight device-maker privacy and security concerns when trying to capture the value of customer data. Many companies install software, usually with user permission, that tracks internet purchases and website traffic to deliver tailored ads to consumers. But, without proper notice and consent, companies can run into costly regulatory enforcement and consumer class actions.
Class representatives Jessica Bennett, Richard Krause, Robert Ravencamp, and John Whittle brought claims in 2015 under the Computer Fraud and Abuse Act, the federal Wiretap Act, and California and New York consumer protection laws. Both sides reached an agreement to settle the claims in April.
Lenovo is set to pay $7.3 million to the settlement fund, and SuperFish will kick in another $1 million from a prior deal with consumers over the spyware issue. None of the funds will revert back to Lenovo or SuperFish and instead will go to “all persons who purchased a Lenovo computer in the United States on which VisualDiscovery was installed by Lenovo,” U.S. Judge Haywood S. Gilliam, Jr. wrote Nov. 21.
The computer maker in 2017 reached a no-fault settlement with the Federal Trade Commission and 32 state attorneys general over the privacy incident. As part of the FTC deal, it promised to not misrepresent features of installed software and undergo 20 years of agency audits. Lenovo also paid $3.5 million to state authorities under a separate agreement.
Pritzer Levine, Girard Gibbs, and Cotchett, Pitre & McCarthy represent the settlement class. SuperFish is represent by Fenwick and West LLP. Lenovo is represented by Womble Carlyle Sandridge & Rice PLLC and K&L Gates LLP.
The case is In re Lenovo Adware Litig., N.D. Cal., No. 15-md-02624, preliminary approval 11/21/18.