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Google agrees to pay $350 million settlement in security lapse case


SAN FRANCISCO — Google agreed to pay $350 million to settle a lawsuit years after a security lapse meant the personal data of users of its now-defunct social media website Google Plus was exposed to the internet.

The settlement comes just weeks after Google settled another lawsuit brought by users of its Chrome web browser who had their data tracked even though they were using private mode. That case could cost Google billions, though a specific amount has yet to be announced.

People who bought Google’s stock from April 23, 2018, to April 30, 2019, will be able to apply for a share of the settlement, according to a filing with the U.S. Court for the Northern District of California. Eligible investors will be notified by mail and a website with information will be created, the filing said.

In 2018, Google realized that its systems had been exposing the data of millions of users of its Google Plus website to external developers for years, but executives chose not to notify the public or shareholders. An internal Google memo at the time pointed out that if the security lapse came to light, the company might be subject to the kind of scrutiny Facebook was then receiving for how its data was used by Cambridge Analytica in the 2016 election. Months later, the Wall Street Journal reported on the potential data breach, sending the company’s stock plummeting and triggering a wave of negative media reports.

Lawsuits ensued, and Google settled a class-action lawsuit by users whose data was affected for $7.5 million in 2018. Most people who applied only got a few dollars. The case that was settled Monday was brought by the Rhode Island government, whose pension fund was an investor in Google. It wound its way through the courts for five years and Google tried unsuccessfully to appeal it to the Supreme Court before the settlement was reached.

“We regularly identify and fix software issues, disclose information about them, and take these issues seriously,” said José Castañeda, a Google spokesperson. “This matter concerns a product that no longer exists and we are pleased to have it resolved.”

Google and other Big Tech companies have faced intense legal and regulatory scrutiny for years, and Google has been forced to pay billions of dollars in fines for breaking competition laws in Europe. But Monday’s judgment comes soon after two other major legal losses for the company.

In December, a U.S. federal jury in San Francisco found Google guilty of being an illegal monopoly in the app store space. Later that month, the company agreed to pay an amount potentially in the billions to users of its Chrome web browser whom it tracked even though they were on “private” mode.

In September, Google will face another trial, this one brought by the U.S. Department of Justice, which alleges the company has broken competition laws in the digital ad market.

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