Hearst to Pay $50 Million to Settle Data Privacy Case
It's hard to say how much a person's privacy is worth, but Hearst says it will pay $50 million to settle a data-privacy lawsuit that alleged the magazine publisher sold subscribers' information.
In the class-action, plaintiffs say they were bombarded with junk mail, advertisements and phone calls after the company sold their personal information. Lead plaintiff Josephine Edwards had subscribed to Good Housekeeping, one of many Hearst publications.
It is the largest settlement payment under a Michigan law that prohibits businesses from selling personal information about their customers. Under the settlement, subscribers will be eligible to receive about $155 each.
$155 Each
Filed in 2015, the lawsuit alleged that Hearst allowed third-party "data mining" companies to access subscribers' information without their permission. The Hearst database included information about users' income levels, purchasing habits, gender, political affiliations, medical conditions, and religious practices, according to the complaint.
The company allegedly sold personal information for subscribers to Good Housekeeping, Cosmopolitan, Country Living, Elle, Esquire, Food Network Magazine, Harper's Bazaar, the Oprah Magazine, Redbook, Seventeen and other magazines.
The settlement is reportedly three times more than any other case under Michigan's Video Rental Privacy Act. Only Michigan residents who subscribed prior to July 30, 2016, are eligible for the settlement proceeds.
Hearst admitted no wrongdoing in the case, but said it settled to avoid uncertainty and further litigation.
"Unsuspecting Consumers"
"Data mining is especially troublesome when consumer information is sold directly to marking companies," the plaintiffs' lawyers said in court records. Those companies often use the information to "lure unsuspecting consumers, many of whom are elderly, into various scams, including fraudulent sweepstakes, charities, and buying clubs."
The settlement requires judicial approval. According to reports, the attorneys want $16.7 million in legal fees and costs.
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