Groupon says India users' data leaked

NEW YORK Tue Jun 28, 2011 8:13pm EDT

An online coupon sent via email from Groupon is pictured on a laptop screen November 29, 2010 in Los Angeles. REUTERS/Fred Prouser

An online coupon sent via email from Groupon is pictured on a laptop screen November 29, 2010 in Los Angeles.

Credit: Reuters/Fred Prouser

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NEW YORK (Reuters) - Groupon Inc's Indian subsidiary SoSasta inadvertently published its users' passwords on the Internet, but the sensitive information was quickly removed after the security breach was discovered last week.

The world's largest daily deals site said an "information security expert" told the company about the problem Friday morning Indian time, or Thursday night central U.S. time, after which it immediately took down the data and began informing affected subscribers.

The company -- which this month filed for an IPO -- did not identify the expert. Groupon said the breach involved all subscribers' passwords, but it was unclear how many users SoSasta had.

Groupon said it fixed the problem immediately and has started informing SoSasta subscribers, advising them to change their passwords as soon as possible.

"We removed the information that had been unintentionally shared," a Groupon spokesman said.

"We will keep our Indian subscribers fully informed as we learn more," Groupon added in a statement. "We are thoroughly reviewing our security procedures for SoSasta and are implementing measures designed to prevent this kind of issue from recurring."

Groupon stressed that the problem does not affect data from any other region, noting that SoSasta runs on its own platform and servers and is not connected to Groupon sites in other countries.

Chicago-based Groupon acquired SoSasta in January.

Founded in November 2008 by Andrew Mason, a Northwestern University music major, Groupon offers discounts on everything from restaurant dining to sky-diving excursions. The "group" part of the name refers to the fact that many deals are activated only when a certain number of people sign up.

This month, it filed for an initial public offering, hoping to capitalize on the biggest investor stampede into Web start-ups since the dotcom bubble burst a decade ago.

Groupon, which has 83.1 million subscribers and deals with nearly 57,000 local merchants in 43 countries, is backed by some of the top venture capital firms in Silicon Valley, including Andreessen Horowitz, Battery Ventures, Greylock Partners and Kleiner Perkins Caufield & Byers.

T. Rowe Price Group and Fidelity Investments also own a stake, among others.

(Reporting by Alistair Barr, editing by Bernard Orr)

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