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Uber To Pay $148 Million To Settle Lawsuits And Coverup From Its 2016 Data Breach

Uber logo California-based Uber Technologies, Inc. has agreed to pay $148 million to settle lawsuits by several states' attorneys general regarding the ride-sharing service's massive data breach in 2016 where hackers stole information about 57 million Uber customers and drivers worldwide, including 600,000 U.S. driver's license numbers. The breach problems were compounded by allegations that Uber paid the hackers $100,000 for their silence, and by the company's failure to notify both state agencies and affected consumers about the breach.

Josh Shapiro, the Attorney General (AG) for the State of Pennsylvania, announced on the Wednesday the settlement agreement including a coalition of 51 state AGs:

"In November 2016, Uber learned that hackers had gained access to some personal information Uber maintains about its drivers, including drivers’ license information for about 600,000 drivers nationwide. Instead of reporting the breach to law enforcement and impacted individuals, Uber tracked down the hackers and obtained assurances that the hackers deleted the information – and made payments to ensure their silence... Since some of the compromised information – specifically driver’s license numbers – is considered personally identifiable information (PII), Uber was required to notify impacted individuals under the Pennsylvania Breach of Personal Information Notification Act. However, Uber failed to report the breach until November 2017."

13,500 Uber drivers in Pennsylvania were affected by the breach. Pennsylvania's share of the total payment is $5.7 million. Each Uber driver in Pennsylvania will receive $100.

48 states have data breach notification laws requiring various levels of notifications to both state officials and affected consumers, who need notice in order to take action to protect themselves and their sensitive personal and payment information.

Massachusetts' share of the total payment is $7.1 million, of which $6.5 million will be distributed to the Commonwealth’s General fund and $600,000 will be used to assist consumers and businesses. Massachusetts AG Maura Healey said:

"Uber failed to immediately report this data breach and tried to pay hush money to hackers. This settlement should be a lesson to other businesses that consumers have a right to know when their personal information has been compromised."

California's share of the total payment is $26 million. California AG  Xavier Becerra said:

"Uber’s decision to cover up this breach was a blatant violation of the public’s trust. The company failed to safeguard user data and notify authorities when it was exposed. Consistent with its corporate culture at the time, Uber swept the breach under the rug in deliberate disregard of the law. Companies in California and throughout the nation are entrusted with customers’ valuable private information. This settlement broadcasts to all of them that we will hold them accountable to protect their data."

San Francisco District Attorney George Gascon said:

"We wholeheartedly support innovative business models, but new ways of engaging in business cannot come at the expense of public safety or consumer privacy. This settlement today demonstrates what happens when all of us in law enforcement work together. My office will continue to collaborate closely with the Attorney General to protect consumers both in San Francisco, and the rest of California."

Terms of the settlement agreement require Uber and its executives to:

"1. Implement and maintain robust data security practices.
2. Comply with state laws in connection with its collection, maintenance, and safeguarding of personal information, as well as reporting of data security incidents.
3. Accurately and honestly represent data security and privacy practices to better ensure transparency in how the company’s driver and customer information is safeguarded.
4. Develop, implement, and maintain a comprehensive information security program with an executive officer who advises key executive staff and Uber’s Board of Directors.
5. Report any data security incidents to states on a quarterly basis for two years.
6. Maintain a Corporate Integrity Program that includes a hotline to report misconduct, quarterly reports to the board, implementation of privacy principles, and an annual code of conduct training".

Uber and its executives have a long history of sketchy behavior including the 'Greyball' worldwide program by executives to thwart code enforcement inspections by governments, dozens of employees fired or investigated for sexual harassment, a lawsuit describing how the company's mobile app allegedly scammed both riders and drivers, and privacy abuses with the 'God View' tool.

This breach settlement is another reminder that Uber and its executives deserve close monitoring and supervision.

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