Google settles shareholder lawsuit over its 2018 decision not to reveal data breach with its now defunct Google+ social network
Alphabet’s Google is to pay hundreds of millions of dollars to settle a shareholder lawsuit concerning a now defunct social networking platform.
Reuters reported that Google agreed to pay $350 million to settle a lawsuit by shareholders related to a security bug at its now-defunct Google+ (or Google Plus) social networking platform.
Life And Death Of Google+
Indeed, as Facebook’s growth continued unchecked, it seemed that Google+ was being quietly retired, despite a facelift in 2015 as Google sought to shift the focus away from people and more towards personal interests and communities.
The facelift didn’t help and Google+ continued to struggle to attract new users outside of a dedicated fanbase.
In October 2018 Google finally announced it was shutting down Google+ (for consumers) because of low user engagement.
However it emerged that despite Google 2018 announcement that it was shutting down Google+ over the platform’s low usage, the firm was actually in hot water over its decision not to reveal a data breach with Google+ earlier in 2018, that had exposed the private data of up to 500,000 users, to hundreds of third-party app developers.
Even worse, Google did not disclose the breach for months, and US senators at the time asked Google to explain why it had delayed disclosing the vulnerabilities.
Such was the pressure on Google that in December 2018 it announced it was accelerating the “sunsetting” (i.e forced retirement) of Google+, after a fresh bug was uncovered.
Google+ had originally been scheduled for consumer shutdown in August 2019, but that deadline was pushed forward to 2 April 2019.
However it maintained the product for the enterprise sector and renamed it Google Currents (that was also closed down in February 2022 and replaced by Spaces).
As was inevitable, Google was sued over the data breach matter in the United States, and in August 2020 Google agreed to a $7.5 million settlement to users, that would only pay a maximum of $12 per person.
But shareholders had also sued Google over allegations that it had learned by March 2018 about the three-year software glitch that had exposed Google+ users’ personal data, yet did not disclose it for months.
Shareholders alleged that Google feared disclosure would subject it to regulatory and public scrutiny similar to what Facebook received over the Cambridge Analytica scandal.
According to the complaint, shares of Google’s parent Alphabet fell several times as news about the bug surfaced, wiping out tens of billions of dollars of market value.
Now Reuters has reported that a preliminary settlement was filed late on Monday in San Francisco federal court after more than a year of mediation and requires approval by US District Judge Trina Thompson.
The lawsuit led by Rhode Island Treasurer James Diossa, on behalf of a state pension fund that owned Alphabet stock, covers Alphabet shareholders from 23 April 2018 to 30 April 2019.
Google denied wrongdoing in agreeing to settle and found no evidence that data were misused.
A spokesperson, Jose Castaneda was quoted by Reuters as saying: “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.”
Lawyers for the shareholders may seek up to $66.5 million from the settlement for fees, court papers show.
Google has been settling a number of lawsuits in recent times.
Last month Google reached an undisclosed settlement with Singular Computing in a patent infringement lawsuit over chips that power the company’s AI tech.
Then in December 2023 Google said it would pay $700 million (£550m) and allow more competition in its Play app store as part of an antitrust settlement with US states and consumers.
In September 2023 Google settled a lawsuit with California, by agreeing to pay the US state $93 million for misleading consumers about its location tracking practices.