ICO proposes to fine Marriott over £99 million for GDPR breach

ICO proposes to fine Marriott over £99 million for GDPR breach

The Information Commissioner’s Office (ICO) has issued a notice of its intention to fine Marriott International £99.2 million for infringements of the General Data Protection Regulation (GDPR).

The proposed fine relates to a cyber incident which was notified to the ICO by Marriott in November 2018. A variety of personal data contained in approximately 339 million guest records globally were exposed by the incident, of which around 30 million related to residents of 31 countries in the European Economic Area (EEA). Seven million related to UK residents.

It is believed the vulnerability began when the systems of the Starwood hotels group were compromised in 2014. Marriott subsequently acquired Starwood in 2016, but the exposure of customer information was not discovered until 2018. The ICO’s investigation found that Marriott failed to undertake sufficient due diligence when it bought Starwood and should also have done more to secure its systems.

Information Commissioner Elizabeth Denham said: “The GDPR makes it clear that organisations must be accountable for the personal data they hold. This can include carrying out proper due diligence when making a corporate acquisition, and putting in place proper accountability measures to assess not only what personal data has been acquired, but also how it is protected.

“Personal data has a real value so organisations have a legal duty to ensure its security, just like they would do with any other asset. If that doesn’t happen, we will not hesitate to take strong action when necessary to protect the rights of the public.”

Marriott has co-operated with the ICO investigation and has made improvements to its security arrangements since these events came to light. The company will now have an opportunity to make representations to the ICO as to the proposed findings and sanction.

The ICO has been investigating this case as lead supervisory authority on behalf of other EU Member State data protection authorities. It has also liaised with other regulators. Under the GDPR ‘one stop shop’ provisions the data protection authorities in the EU whose residents have been affected will also have the chance to comment on the ICO’s findings.

The ICO will consider carefully the representations made by the company and the other concerned data protection authorities before it takes its final decision.

Divya Gupta, a partner at international law firm Dorsey & Whitney, said: “These steep fines are a warning to companies that fail to protect this private information from loss, damage or theft.

“The fines are intended to encourage compliance because when entrusted with personal data, it’s a company’s job to diligently look after it, and for many years they have gotten away with not doing so. More important than the headline-making penalties themselves, however, is the exposure of 339 million guest records globally, including 30 million Europeans.”

Ms Gupta also warned that impending US legislation would create harsher penalties.

“With further fines like this one on the horizon, companies doing business in the EU should also look to their American operations. Several states are imposing privacy laws in the United States, with California leading the pack with the California Consumer Privacy Act.

“While 30 million Europeans were impacted, even if 10 per cent of that number were California residents - 3 million - Marriott would be looking at $300,000,000 in domestic statutory penalties at a minimum for failure to enact reasonable security practices and procedures. For companies looking for the lesson here – the GDPR penalty is a paltry sum compared to what is looming.”

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