AOL Sued, Makes Organizational Changes

It was bound to happen soon, and last Friday it finally did. Three AOL subscribers filed a lawsuit and are seeking class action status in the U.S. District Court for the Northern District of California in Oakland.

Two of the plaintiffs remain unnamed citizens of California, while a third is Kasadore Ramkissoon from Richmond County, New York.

AOL is accused of violating the Electronic Communications Privacy Act, and of fraudulent and deceptive business practices in the lawsuit, which names other offenses.

The plaintiffs are seeking at least $5,000 for every person whose data was publicly released in July. In excess of 650,000 AOL members were said to have been affected by the data mishap, which means that AOL would have to pay at least $3.25 billion if the lawsuit’s terms are met.

The lawsuit also indicates that although AOL has since taken the data in question off of their research page, the data is still accessible on other third party sites.

AOL has since apologized for the mistake, and fired two employees involved in the release of the data. The company’s chief technology officer also resigned over the matter.

“People paid AOL with the belief that their privacy was going to be protected. That’s not what happened,” said John Dominguez, one of the attorneys involved in the filing of the lawsuit.

As the company is shifting from a subscription-based business model to an advertising-based model, AOL has begun to alter the format of its business hierarchy, replacing business units with smaller groups.

Business unit leaders are being shifted around in preparation of a full thrust into their new restructuring in January.

AOL is also planning on announcing its first chief privacy officer in the near future. This move comes as a direct response to the release of the data involved in the aforementioned lawsuit.

Sources:

http://publications.mediapost.com/index.cfm?
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http://www.businessweek.com/ap/tech/D8KC60T81.htm

http://news.com.com/2061-10803_3-6119218.html