You may recall that recently America Online accidentally posted the compiled search information for more than 650,000 subscribers for anyone to see. The excuse was incompetence, a researcher was said to be to blame. Two employee have been fired, and the company’s chief technology officer has resigned. As a result of the blunder AOL also pledged to name its first chief privacy officer.

At first AOL tried a no harm, no foul defense since the revealed data contained no names as AOL had substituted numeric IDs for the subscribers’ real names. However, as the company soon admitted, the search queries themselves often contain personally identifiable data, revealing names, credit card numbers and medical conditions.

That much information makes it fairly easy to identify the users if someone bothers to try. For example, The New York Times was able to trace user Thelma Arnold, 62, of Lilburn, Ga., and The Washington Post identified JoAnn Whitman, 55, of Grand Junction, Colo., based on information they obtained from the AOL posting.

Three AOL subscribers who suddenly found records of their Internet searches widely distributed online are suing the company under privacy laws and are seeking an end to its retention of search-related data. They are two unnamed Californians and Kasadore Ramkissoon of Richmond County, N.Y.

Hear that search engines, a suit challenging your right to store this valuable data. I advise you take a long look at your business model and California’s history of privacy related rulings. The suit was filed last Friday in U.S. District Court in Oakland, Calif. and seeks class-action status. It does not specify the amount of damages being sought.

The lawsuit is the first of what will likely be many suits, in the wake of AOL’s betrayal of their customer’s reasonable expectation of security. In the end it will probably not prove to be an end to the practice but this addition to the long and colorful history of America Online might teach search engines that they must handle this information with unending vigilance or pay the consequences.