After a data security breach, with 500 million accounts compromised, that took place in 2014 was confirmed, Yahoo is now facing a class-action lawsuit. The company is being accused of treating the security of its users with disregard.
The lawsuit was filed by Ronald Schwartz, accusing the company of gross negligence. The amount of compensation sought by the lawsuit is unspecified.
Yahoo has replaced seven CEOs, but is still falling behind competition such as Facebook and Google. A class-action lawsuit is the latest misfortune on the company’s shoulders.
Lately, the company officials decided to sell the core business to Verizon. In July, Yahoo confirmed they will be selling the business for around $5 billion, but the deal has not yet gone through. The latest criticism of the company’s data security may prevent the deal from taking place at all.
Javvad Malik, security advocate at AlienVault, said it is not surprising for a company’s data security to get breached. However, detecting those kind of breaches in a timely manner and taking appropriate action is the norm that is expected from the company.
Gubi Singh from Redscan security firm estimates that unless big companies such as Yahoo start taking the data security of their users more seriously, class-action lawsuits just like this one are likely to follow. He added that this is to be expected not only from the customers, but from suppliers and industry regulators as well.
The plaintiffs will need to prove Yahoo’s cyber defences were substandard when the breach occurred. Because there are no widely-accepted standards, this could be a tough nut to crack.