Yahoo to face litigation over massive cyber attack

James Pearce
Published on:

US judge orders Verizon-owned internet company to face lawsuit over data breach that affected up to one billion accounts

Recent Verizon acquisition Yahoo will face litigation brought on behalf of more than a billion users who had personal information compromised during one of the largest cyber-attacks of all time.

The company, which was bought by Verizon for $4.5 billion earlier this year, was subject to two of the largest publicly-disclosed data breaches of all time, between 2013 and 2016.

Yahoo has since been merged with AOL into a new Verizon unit called Oath, which has became subject to a class action lawsuit over the cyber attacks.

Yahoo had disputed whether it should face litigation, claiming breach victims lacked standing to sue, but US District Judge Lucy Koh has ruled the suit can go forward.

“All plaintiffs have alleged a risk of future identity theft, in addition to loss of value of their personal identification information,” the judge wrote.

It is another blow for Verizon, as the US telco was not made aware of the breaches when it first agreed to buy Yahoo last year. Yahoo later admitted that senior staff and legal advisors were aware of one of the attacks, which took place in 2014, prior to striking a deal with Verizon.

The 2014 breach affected up to 500 million accounts, while the internet firm also discovered a second breach had taken place earlier, in 2013, affecting as many as a billion accounts.

This led Verizon to renegotiating its offer, receiving a $300 million discount on the acquisition over potential liabilities from the hack. Verizon declined to comment.

“We believe it to be a significant victory for consumers, and will address the deficiencies the court pointed out,” John Yanchunis, a lawyer for the plaintiffs who chairs an executive committee overseeing the case, told Reuters. “It’s the biggest data breach in the history of the world.”