Around 200 million people in the U.S. and Israel will be compensated by Yahoo for the cybersecurity breach that led to personal data theft in 2013 and 2014, according to Financial Times. The company agreed to pay $50 million in damages and provide two years of free credit-monitoring services to its affected users.
Similarly to Google’s silence for their bug which eventually led to closing of Google+, Yahoo disclosed the information about the immense cyberattack only in 2016, with a 3-year delay. Around 1 billion user accounts were compromised then. Furthermore, in 2014 Yahoo suffered another security breach which affected at least 500 million users. It was also announced after some time – in 2016.
Both breaches took place under the 6-year reign of CEO Marissa Mayer and were inevitably followed by selling of Yahoo’s digital services to Verizon Communications. The deal was first negotiated for $4.83 billion, but after the breach announcement in 2016 the agreement was revised. Yahoo had to lower substantially the initial price – by $350 million.
Now the $50 million compensation will be split between Verizon and Altaba Inc. — a company that became the caretaker of Yahoo’s remains, which include about $7 billion in cash and lucrative stakes in Chinese e-commerce giant Alibaba Group and Yahoo Japan. Unfortunately for Altaba, it already paid $35 million fine to resolve federal regulators’ charges that the breach was disclosed with such a delay to the investors.
Although around 3 billion Yahoo accounts were hit by hackers, just 1 billion of them will be compensated according to the court settlement reached in a San Jose, California, on Monday. A hearing to approve the preliminary settlement is scheduled for November 29, again in San Jose. So far Yahoo hasn’t commented on the court’s decision.
If the preliminary settlement is confirmed in one-month time, affected Yahoo accountholders have the right to claim up to $25 per hour for time spent dealing with issues triggered by the security breach. These should better have documentation proving their losses, as this way they could ask for $375, if not – the compensation will not exceed $125. Additionally, Yahoo accountholders with a premium email account will be eligible for a 25% refund.
According to the settlement, the compensation in the form of credit-monitoring service can reach $14.95 per month, or about $359 for two years. However, this part of the agreement is not fully explained and confirmed yet.
In general, this $50 million compensation may seem huge. However, it may be much less than the sum the company would be obliged to pay if the case reach a trial. Experts estimate that losses for Yahoo could be $1 billion if it lost the case.
Photo: Search Engine Land