Penalty Amount
$3,500,000
Lenovo preinstalled 'Visual Discovery' software on its computers that intercepted browsing data and broke encrypted connections without user consent, compromising security and privacy. The multi-state settlement imposes a $3.5 million penalty and requires Lenovo to implement disclosure, consent, opt-out, and security compliance measures.
Lenovo must clearly disclose pre-installed advertising software operations, obtain affirmative consumer consent, provide effective opt-out and removal options, implement a software security compliance program, and undergo biennial third-party assessments for 20 years.
In-house legal teams should review vendor agreements with software suppliers and manufacturing contracts to ensure clauses prohibit unauthorized data interception and encryption compromise. Customer agreements and end-user license agreements (EULAs) must be assessed for adequate disclosure of preinstalled software, explicit user consent for data collection, and clear opt-out mechanisms. Security clauses should mandate compliance with encryption standards and regular audits. Changes needed include adding specific consent requirements for data interception, prohibiting software that breaks encrypted connections, implementing transparent disclosure obligations, and incorporating settlement-mandated security compliance and audit rights.
Entity
Lenovo
Industry
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