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Linkedin settles security breach class-action lawsuit for $1.25m

Affected users will get $50 each
Tue Aug 26 2014, 13:39
Linkedin will pay $50 each to users who relied upon the firm's privacy policy prior to the security breach

PROFESSIONAL SOCIAL NETWORK Linkedin has agreed to settle a class-action lawsuit over a security breach in 2012 by paying $1.25m (about £750,000).

The security breach occurred when hackers infiltrated the company's servers in 2012, stealing the login credentials of 6.4 million users and posting them online.

Linkedin premium subscriber Khalilah Gilmore-Wright filed the class-action lawsuit, alleging that she wouldn't have become a member if she had known that the company employed "obsolete" security measures to protect her password.

The proposed settlement provides that Linkedin will pay up to $50 each to users who read and relied upon the firm's privacy policy prior to the security breach and subsequently had their credentials stolen. The firm will also commit to protecting its members' passwords using 'salting' and 'hashing' techniques for the next five years.

Between 2007 and 2012 Linkedin enrolled around 800,000 premium subscribers who paid at least $19.95 per month for membership. However the plaintiffs' lawyers estimate that only 20,000 to 50,000 members will qualify for payments under the settlement.

Settlement money that isn't claimed by qualified class members will be paid to three non-profit organisations - the Center for Democracy and Technology, World Privacy Forum and the Carnegie Mellon Cylab Usable Privacy and Security Laboratory.

The plaintiffs' lawyers apparently are happy with the firm's settlement offer. They told the court, "By providing significant direct cash to the class and valuable prospective relief, the instant settlement exceeds the majority of privacy settlements that have won preliminary and/or final approval."

The class-action lawsuit against Linkedin has been in progress and controversial for some time.

San Jose US District Court Judge Edward Davila will hold a hearing next January to decide whether to approve the settlement. µ

 

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