Published: Tue, March 13, 2018
Finance | By Claude Patterson

U.S. data breach victims can sue Yahoo

U.S. data breach victims can sue Yahoo

A federal judge ruled that individuals affected by the Yahoo data breaches can sue the company.

U.S. District Court Judge Lucy Koh did not accept Verizon's reasoning, instead noting the plaintiffs' allegation that had Yahoo "disclosed the security weaknesses", they would have acted differently toward their data on the site.

Koh dismissed some other claims.

Koh's order represents a significant legal defeat for Yahoo, recently purchased by Verizon.

Last March, US prosecutors charged two Russian intelligence agents and two hackers in connection with one of the Yahoo breaches.

Verizon lowered the price it offered for Yahoo to about $4.5 billion after the data breaches were revealed.

"Even if his annual fee did not provide for security measures above and beyond those for free accounts, Plaintiff Mortensen pleads that Defendants' representations about security formed part of the reason for him to use Yahoo!". "However, defendants fail to acknowledge that defendants' delayed disclosures are likely to have harmed plaintiffs in the interim". It was called "one of the most audacious hacks of all time".

Yahoo also failed to alert customers about the breach and when it finally disclosed the cyberattack three years later, it underestimated the scope, according to the plaintiffs.

At the heart of the case, Yahoo was accused of taking too long to notify users of the breaches, which put customers at risk of identity theft and fraud. Cookies allow users to stay signed into various websites.

The data hack is the largest in history.

Koh agreed to toss the claims of two of the named plaintiffs who claim violations of California's unfair competition law on grounds of the threat of identity theft from the breach, but upheld the claim of another plaintiff who had paid $19.95 per year for the premium email service.

Numerous plaintiffs claim they would have behaved differently had they known in 2013 that their private information had been compromised. They alleged that Yahoo knew about security vulnerabilities back in 2012 and about a 2014 hack as it occurred.

US prosecutors have charged four individuals - two Russian intelligence agents and two hackers - in connection with the data breach.

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