Google (GOOGL.O) has reached a settlement agreement worth $350 million to resolve a lawsuit filed by shareholders concerning a security flaw at its now-defunct social media platform, Google+.
The preliminary settlement, filed late on Monday in San Francisco federal court following over a year of mediation, is subject to approval by U.S. District Judge Trina Thompson. This settlement addresses claims that Google was aware of a software glitch dating back to March 2018 that exposed personal data of Google+ users. Despite this knowledge, Google allegedly withheld information about the issue for several months while publicly emphasizing its dedication to data security.
Shareholders argued that Google refrained from disclosing the security flaw out of fear that it would lead to regulatory and public scrutiny similar to what Facebook faced in the aftermath of the Cambridge Analytica scandal, where user data was harvested for the 2016 U.S. elections.
The lawsuit, spearheaded by Rhode Island Treasurer James Diossa on behalf of a state pension fund holding Alphabet stock, encompasses Alphabet shareholders from April 23, 2018, to April 30, 2019. Allegedly, news of the security flaw caused fluctuations in Alphabet’s stock prices, resulting in substantial losses of market value.
Google, while denying any wrongdoing, has agreed to the settlement without admitting fault and asserts that there is no evidence of data misuse. Jose Castaneda, a spokesman for Google, stated, “We regularly identify and address software issues, disclose information about them, and take these matters seriously. This case pertains to a product that no longer exists, and we are pleased to have resolved it.”
This settlement follows a related $7.5 million agreement reached by Google with Google+ users in 2020. Court documents reveal that lawyers representing the shareholders may seek up to $66.5 million in fees from the settlement.
The disclosure of this settlement comes just over five weeks after Google resolved another lawsuit, alleging the unauthorized tracking of internet usage by millions of users who believed they were browsing privately. The terms of that settlement have not yet been made public.
The case is identified as In re Alphabet Inc Securities Litigation in the U.S. District Court for the Northern District of California, No. 18-06245.