Google Faces $350-Million Settlement In US Data Privacy Case

While Google denied any wrongdoing in agreeing to settle, it emphasised its commitment to addressing software issues promptly and transparently.

Shareholders argued that Google refrained from disclosing the issue out of fear of facing regulatory and public scrutiny.

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Google has reached a settlement worth $350 million to resolve a lawsuit brought forth by shareholders concerning a security flaw within its former social media platform, Google+. The agreement, filed in San Francisco federal court following over a year of mediation, is contingent upon approval by US District Judge Trina Thompson, reported Reuters.

The lawsuit pertains to allegations that Google became aware in March 2018 of a software glitch spanning three years that exposed the personal data of Google+ users. However, the company purportedly concealed this information for several months, despite publicly emphasising its dedication to data security. Shareholders argued that Google refrained from disclosing the issue out of fear of facing regulatory and public scrutiny akin to the fallout experienced by Facebook during the Cambridge Analytica scandal in 2016.

According to the complaint, news of the bug caused fluctuations in Alphabet, Google's parent company, resulting in substantial losses in market value. The lawsuit, spearheaded by Rhode Island Treasurer James Diossa on behalf of a state pension fund that held Alphabet stock, encompasses shareholders from April 23, 2018, to April 30, 2019.

'Pleased To Have It Resolved'

While Google denied any wrongdoing in agreeing to settle, it emphasised its commitment to addressing software issues promptly and transparently. Jose Castaneda, a spokesperson for the company, stated, "This matter concerns a product that no longer exists, and we are pleased to have it resolved."

This settlement comes in the wake of a $7.5 million agreement reached by Google with Google+ users in 2020. Despite a previous dismissal of the shareholder case in 2020, the 9th US Circuit Court of Appeals revived it in 2021.

Jason Forge, a partner at Robbins Geller Rudman & Dowd representing the shareholders, commented, "Most people thought no one would recover a penny in this case, and when the first judge granted Google a dismissal, the 'I told you so's' were deafening. That just made Rhode Island and us more determined."

Legal representatives for the shareholders are anticipated to seek up to $66.5 million from the settlement for fees, as indicated by court documents. The disclosure of Monday's settlement follows shortly after Google resolved another lawsuit alleging the clandestine tracking of internet activity of millions who believed they were browsing privately. Terms of that settlement remain undisclosed at present.