In the words of CBS News, “another day, another high-profile password hack.” LivingSocial posted a security notice on its website on April 27, 2013 alerting users to a cyberattack of its servers. For those readers who have not used the company’s services, LivingSocial is a discount site similar to Groupon that claims more than 70 million members worldwide. As of November 2012, LivingSocial advertised that it had sold over 123 million vouchers.
As first reported by tech blog AllThingsD, customer data for more than 50 million users may have been accessed. Some of this data may include users’ names, email addresses, encrypted passwords and the dates of birth.
Avid readers of this blog may recall that we discussed the rise in litigation following high-profile hacking in January. That post was recently expanded into a full-length article in Managing IP. In quick summary, plaintiffs’ counsel are finding new and novel ways to sue companies whose systems are hacked. Companies have fought back by attacking the plaintiffs’ “standing” to file such litigation because the plaintiffs are often unable to prove that they were damaged. Companies that have already deployed this defense include Google, LinkedIn and Activision/Blizzard. It may very well be the case that LivingSocial will need to deploy the same defense in the coming months.