OUCH! LinkedIn SLAPPED With This Lawsuit
LinkedIn’s (NYSE:LNKD) recent password security breach has landed it in the court after a user filed a $5 million class-action lawsuit against the social network. The complaint, filed in a San Jose federal court, accuses LinkedIn of negligence and breach of contract for failing to encrypt its user database, and alleges the network has a “troubling lack of security measures.”
The breach, which took place earlier this month, saw a group of hackers post encrypted passwords of almost 6.5 million users on an online forum and ask the community to crack them. The breach was first reported by a Norwegian security firm, but LinkedIn waited for several hours before confirming it.
Plaintiff Katie Szpryka, a registered LinkedIn account holder since 2010, said she paid for an upgraded account with the social network, but the suit also includes a separate class of users with free accounts. Szpryka’s petition alleges that LinkedIn breached California consumer protection laws and cites a FTC complaint from 2003 in which the Guess (NYSE:GES) clothing brand was accused of unfair trade practices for storing customer information in an unencrypted database.
A class-action suit against Facebook (NASDAQ:FB) was settled earlier this week after the social network decided to pay $10 million to charity.
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