Computer maker Lenovo Group Ltd. has agreed to chip in $7.3 million to settle claims related to adware that came preinstalled on certain models of its laptops, which customers alleged slowed performance and left their machines vulnerable to hackers.
The proposed deal, announced in court filings Wednesday from plaintiffs lawyers at Pritzker Levine; Cotchett, Pitre & McCarthy; and Girard Gibbs, comes after three years of litigation and more than two years after co-defendant Superfish Inc., the maker of the adware, agreed to pay plaintiffs $1 million.
Lenovo and Superfish were hit with more than two dozen class action lawsuits across the country after a February 2015 report in The New York Times detailed the privacy, security and performance problems associated with Superfish’s VisualDiscovery software, which came preinstalled on 28 of Lenovo’s laptop models. The Times reported that the software dropped ads into user’s web browser sessions and scooped up data they entered into secure websites in ways that could be exploited by hackers.
The Judicial Panel on Multidistrict Litigation transferred the cases to U.S. District Judge Ronald Whyte of the Northern District of California in June 2015 for pretrial proceedings. Whyte, who retired while the case was pending, denied Lenovo’s request to dismiss a wide swath of privacy and consumer protection claims in October 2016 and certified a nationwide class under California law of consumers who purchased the laptops from someone other than Lenovo.
The proposed settlement outlined in Wednesday’s filing still requires approval from U.S. District Judge Haywood Gilliam Jr., who has overseen the suit since Whyte’s retirement.
Plaintiffs note in their court papers that Lenovo has entered into a consent decree with the U.S. Federal Trade Commission and 32 state attorneys general forbidding the company from using software to inject advertising into browsing sessions or to transmit consumer data to third parties. The company acknowledged that the class action suits, which were filed before the enforcement actions, played a factor in the company agreeing to injunctive relief as part of its FTC consent decree.
Court papers indicate that there are about 500,000 estimated class members. Eligible consumers can fill out a short claim form and receive a small sum—estimated to be about $40 if an above-average number of class members filed claims—and up to $750 dollars if they took measures to remove the VisualDiscovery software off their machines and can provide more detailed documentation of their efforts.
Plaintiffs counsel did not indicate how much they will seek in attorney fees, but indicated in the filing that it will not be more than “the value of their hours expended in prosecuting and resolving these claims.”
Daniel Stephenson of K&L Gates, who represents Lenovo, didn’t immediately respond to an email message Thursday. Superfish, which has gone out of business since it settled out of the case, was represented by Fenwick & West.