Google has reached a $350 million settlement to resolve a lawsuit concerning a security bug in its discontinued Google+ social media platform. The preliminary settlement, submitted in San Francisco federal court after over a year of mediation, awaits approval from U.S. District Judge Trina Thompson. The legal action revolves around allegations that Google was aware of a three-year software glitch by March 2018, exposing sensitive user data. However, the tech giant purportedly concealed the issue for months, contradicting its public assurances of prioritizing data security.
Shareholders claimed that Google’s reluctance to disclose the bug was driven by the fear of regulatory scrutiny and public backlash, akin to Facebook’s experience with Cambridge Analytica during the 2016 U.S. elections. The revelation of the bug reportedly caused significant stock value declines for Google’s parent company, Alphabet, erasing tens of billions of dollars in market capitalization. The lawsuit, led 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.
Google, while settling the lawsuit, maintains its innocence, asserting that it found no evidence of data misuse. Jose Castaneda, a spokesperson for Google, stated, “We regularly identify and fix software issues, disclose information about them, and take these issues seriously. This matter concerns a product that no longer exists, and we are pleased to have it resolved.” Notably, Google had previously settled a related lawsuit in 2020, reaching a $7.5 million agreement with Google+ users.
Despite a dismissal by a different judge in 2020, the 9th U.S. Circuit Court of Appeals revived the shareholder case in 2021. The settlement may involve lawyers for the shareholders seeking up to $66.5 million in fees. This resolution comes approximately 5-1/2 weeks after another settlement where Google resolved a lawsuit accusing it of secretly tracking the internet use of users who believed they were browsing privately.
