Google Pays $350 Million to Settle Shareholder Lawsuit Over Google+ Data Bug

Manoj Prasad

Google has agreed to pay $350 million to settle a shareholder lawsuit alleging the company concealed a software bug that exposed private user data on the now-defunct Google+ social network.

The settlement was filed in San Francisco federal court on Monday after more than a year of mediation. It requires approval by U.S. District Judge Trina Thompson.

Shareholders accused Google of knowing about the software glitch as early as March 2018 but hiding the problem for months while publicly emphasizing its commitment to user privacy. They claimed Google wanted to avoid scrutiny similar to what Facebook received regarding Cambridge Analytica’s misuse of user data in the 2016 U.S. elections.

According to the lawsuit, Alphabet’s share price fell several times as details of the bug emerged, costing shareholders billions in market value. The class action suit led by Rhode Island Treasurer James Diossa covered Alphabet shareholders from April 23, 2018 to April 30, 2019.

Google denied any wrongdoing in the settlement. A company spokesperson said Google regularly identifies and fixes software bugs, discloses the issues, and takes them seriously. They noted the settlement concerns a product no longer in existence.

The $350 million settlement comes weeks after Google agreed to pay $7.5 million to Google+ users impacted by the data exposure. Lawyers representing shareholders could receive up to $66.5 million in legal fees from the settlement funds.

In January, Google reached another settlement regarding claims it secretly tracked internet use of people who believed they were browsing privately. Terms of that agreement have not been made public.

The shareholder case highlights continued scrutiny of Google’s privacy practices. The company will hope these settlements help turn the page as it looks to build user trust in its products and services. But regulators and watchdogs will keep a close eye on Google’s handling of personal data.

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