Bottom line: Avoiding a trial was likely in the best interest of all parties, especially Yahoo, as the company could have faced a much larger penalty had it fallen on the wrong side of a verdict. Lawyers representing Yahoo accountholders could receive as much as $37.5 million in fees and expenses if the settlement is approved.
A settlement fund of $50 million will be set up to cover damages. Complementary credit monitoring will also be provided to the estimated 200 million people affected by the breach according to a report from the Associated Press.
Yahoo accountholders will be eligible for compensation at a rate of $25 per hour for time spent dealing with issues related to the breach. For those that can document their losses, Yahoo will cover up to 15 hours of lost time, or $375. Those unable to provide documentation may seek up to five hours of compensation, or $125.
Those who paid for a premium e-mail account will also be eligible for a 25 percent refund, we’re told.
Affected parties will also receive two years of free credit monitoring service from AllClear.
According to the AP, Verizon – who now owns Yahoo – will pay for half of the settlement cost while Altaba, the company that manages what’s left of Yahoo’s assets, will fund the other half. Altaba has already been hit with a $35 million fine from the Securities and Exchange Commission for Yahoo’s failure to disclose the breaches to investors.
A hearing to approve the settlement is scheduled for November 29 in San Jose, California.