Dive Brief:
- Yahoo is facing multiple lawsuits following revelations earlier in the week of a massive hack that occurred in 2014.
- One lawsuit was filed by Yahoo user Ronald Schwartz on behalf of the estimated 500 million Yahoo users in the U.S. whose personal information was compromised, according to a Reuters report. The lawsuit was filed in the federal court in San Jose, California and is seeking class-action status and unspecified damages.
- Schwartz filed the suit because of the company's "failure to establish and implement basic data security protocols, contrary to Yahoo’s guarantees, its users’ personal information is now in the hands of criminals and/or enemies of the U.S.," the lawsuit said, according to Bloomberg. Similar suits were filed in San Diego and Illinois.
Dive Insight:
Schwartz's lawsuit claims Yahoo demonstrated "reckless disregard for the security of its users' personal information that it promised to protect." It also alleges that Yahoo took about three times longer than organizations typically need to uncover a breach.
Security experts say the breach could put corporate information at risk since many people use Yahoo email for work. Also, with rampant password reuse, those who don't reset their passwords across sites could find more personal information compromised.
The data breach, which is one of the biggest ever reported, is the latest bad news for Yahoo. The company, which was once the largest email provider in the U.S., has been on a downward spiral for a number of years as it struggled to innovate and expand its market appeal.
Verizon, which agreed to buy Yahoo for $4.83 billion in July, also appeared surprised by the hacking revelation. If an investigation reveals that Yahoo knew about the breach prior to the sale, more lawsuits and potentially even criminal proceedings could be forthcoming.
