Marriott made a filing in the US today that Information Commissioner’s Office (ICO) in the UK intends to fine the hotelier £99,200,396 over the data base breach that happened over multiple years.
ICO found that Marriott had failed to undertake appropriate due diligence when it acquired Starwood and had failed to secure its systems. ICO here acts on behalf of the entire 31 countries of EEA.
Here’s the release from ICO:
Statement in response to Marriott International, Inc’s filing with the US Securities and Exchange Commission that the Information Commissioner’s Office (ICO) intends to fine it for breaches of data protection law.
Following an extensive investigation the ICO has issued a notice of its intention to fine Marriott International £99,200,396 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:
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.
Here’s the press release from Marriott:
Marriott International announced that the UK Information Commissioner’s Office (ICO) has communicated its intent to issue a fine in the amount of £99,200,396 against the company in relation to the Starwood guest reservation database incident that Marriott announced on November 30, 2018. Marriott has the right to respond before any final determination is made and a fine can be issued by the ICO. The company intends to respond and vigorously defend its position.
Marriott International’s President and CEO, Arne Sorenson, said: “We are disappointed with this notice of intent from the ICO, which we will contest. Marriott has been cooperating with the ICO throughout its investigation into the incident, which involved a criminal attack against the Starwood guest reservation database.
“We deeply regret this incident happened. We take the privacy and security of guest information very seriously and continue to work hard to meet the standard of excellence that our guests expect from Marriott.”
The Starwood guest reservation database that was attacked is no longer used for business operations.
For more information about the Starwood guest reservation database incident, please visit https://info.starwoodhotels.com/
Glad that the EU is fining these companies that don’t properly secure customer data. ICO yesterday released its findings on the British Airways case (read more here) that is facing larger fine compared to Marriott.
At the end of the day, a $124M fine on this data breach is drop in the bucket for Marriott. I would think that they would rather pay it rather than fight it in order for the negative news about this data breach just to go away.
I would hope that these large companies would better secure the highly personal customer data rather than leave their front doors open. The GDPR legislation makes it very expensive for the corporations to mishandle the information of EU/EEA citizens.