Marriott International (Marriott) faces a £99m fine or more for a data breach that took place in 2014 at the Starwood hotels group due to poor security practices.
Marriott acquired Starwood in 2016 and, according to the UK Information Commissioner’s Office (ICO), did not undertake sufficient due diligence during the acquisition of the group. Further, the breach was not reported to the ICO until November 2018.
The exposure of customer information included well over 300 million guest records and the personal details of 30 million guests related to residents of 31 European Economic Area (EEA) countries and approximately 7 million related to UK residents. The ICO announced the intent to fine Marriott on Tuesday 9 July.
It is the second large penalty announced this week by the ICO. Marriott joins British Airways as the ICO continues its investigations into GDPR incidents reported to its office. Both Marriott and British Airways possible fines far surpass the previous record of €50 million that France’s CNIL issued to Google for failing to appropriately disclose its data collection practices.
As noted in testimony by Marriott’s CEO, Arne Sorenson, the data breach at Starwood contained 383 million guest records, 18.5 million encrypted passport details, including over 9 million encrypted payment card details, 385,000 card numbers (all valid) and unencrypted passport details totaling over 5 million numbers.
The ICO Statement
Information Commissioner Elizabeth Denham continued her blunt statements about organisations’ responsibilities to protect personal details and the consequences of not doing so:
“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.”
As the Information Commissioner explained, companies have an obligation to protect their customer’s data. ‘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.”
The delay in detecting, analysing and reporting the data breach no doubt contributed to the ICO’s decision to fine Marriott.
Under the GDPR, companies are mandated to protect any data that customers entrust to them. Marriott’s data protection programme and due-diligence during the acquisition failed to meet acceptable security and data protection practices.
How to avoid GDPR fines
Avoiding fines from the ICO or other governing bodies sounds intimidating. But there are a few simple steps you can take to protect your customer’s data, and yourself from fines.
1.Know your data
What types of personal data do you collect and store?
How many people are you collecting data from?
Are there any “special categories” of data involved?
Do you transfer them out of the EEA?
All these questions help comprise the risk associated with customer data. The higher the risk you impose on customers, the greater the security you will need to provide in order to satisfy a Data Protection Authority if something goes wrong or if you get audited.
2.Know your security
If you experience a data breach, you must report it. And if, under inspection, your security software isn’t up-to-date, or if you don’t use simple tools like anti-malware software, firewalls, and SSL certificates around your web forms, then you’ll probably be liable for a fine.
The same goes for access controls – if you give everyone in your company access to customers’ personal data, regardless of whether they need it for their job, you’ll be setting yourself up for a fine.
You need to be prepared for an audit or investigation if a data breach does happen. That means having the appropriate policies and procedures in place well before the breach occurs.
Some policies and procedures include a data breach response protocol, a broad data protection policy, and training courses around cybersecurity and data protection for any employees that have access to personal data.
Finally, make sure you document your personal data in a personal data inventory, describing the types of data your company collects, where it’s stored, how long it’s kept, who has access to it, how it’s deleted, and to whom it’s transferred.
Sovy’s GDPR Essentials can help you with each of the steps laid out above:
- Walk through a data mapping exercise and build your data inventory.
- Train your employees with industry-standard eLearning courses.
- Track document access and history to ensure transparency in the event of an audit.
- Manage your cookies and data rights (e.g. access, deletion, portability) with our consent manager dashboard.