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Yahoo to Pay $50 Million to Victims of Massive Security Breach

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Yahoo’s ongoing legal troubles related to the biggest data breach in history appear to be coming to a close. It has submitted a settlement to a U.S. district court agreeing to pay victims $50 million along with some other benefits. Anyone who spent time undoing damage from the breach should pay attention.

The settlement was submitted to the court in the Northern District of California late on Monday and still requires approval. In it, Yahoo agrees to put $50 million into a fund for victims with claims and it will provide two years of credit monitoring service from AllClear. The latter package is valued by Yahoo’s lawyers at around $350. While it’s unlikely Yahoo will pay AllClear full price, that part of the deal could be the best win for anyone who was affected in the devastating hack of 3 billion users’ data. Businesses and individuals who suffered financial losses directly related to the hack also have the option to seek reimbursements.


Any user who can show documented losses of time can file a complaint and be awarded $25 per hour up to 15 hours for a maximum total of $375 in compensation. Any user who does not have documentation but lost time is eligible for up to five hours of compensation totaling $125. Users who paid for a premium Yahoo email account can request a 25 percent refund.

Yahoo did not immediately respond to our request for comment on the settlement.

Assuming it’s approved, the settlement should close the door on Yahoo’s obligations related to hacks that began in 2013. The company did not disclose the breaches until 2016 and the number of users that it admitted were affected continued to balloon over time. In late 2017 it finally put the number of victims at 3 billion users. Its failure to disclose the breach resulted in a $35 million fine from the SEC earlier this year.


The revelation of the hack came after Yahoo had already agreed to a $4.83 billion acquisition by Verizon. The deal briefly stalled before Verizon was given a $350 million discount. Verizon subsequently formed a subsidiary, Oath, that will pay out $15 million worth of the user settlement. A holding company set up for Yahoo’s Asian investments, Altaba, will pay the other $35 million. According to the Associated Press, some experts estimated that Yahoo could have faced up to a billion dollar payout if the case had gone to court.

A hearing on the settlement is scheduled in San Jose on November 29.

[Northern District of California]