The Marriott International Inc. data breach may mean significant penalties under the EU’s General Data Protection Regulation.
Companies that experience serious breaches involving EU citizens’ information can be hit with lawsuits and fines of up to four percent of their annual revenue.
The incident “seems likely to be yet another early test case of how aggressive regulators are going to be with GDPR,” Bloomberg Intelligence analyst Tamlin Bason said.
Companies must notify regulators of data breaches within 72 hours of discovering the breach under the GDPR. The U.K.'s data protection authority Nov. 30 said Marriott informed the agency about the unauthorized access to the database that may have exposed information of up to 500 million guests.
The U.K.'s Information Commissioner’s Office is “making enquiries” into the matter, it said in a statement.
The ICO is likely to start investigating Marriott, which could receive “a hefty fine” for the large-scale breach, Cathryn Culverhouse, UK-based solicitor at DMH Stallard, said in a statement provided to Bloomberg Law. “This is likely to have a damaging impact on the hotel’s reputation,” she said.
Marriott announced Nov. 30 that it learned through an internal investigation that the breach may have revealed some customers’ names, mailing addresses, passport numbers, and dates of birth in its Starwood reservation system. Marriott didn’t immediately respond to Bloomberg Law’s request for comment.
Bason said the information in Marriott’s initial disclosure may not lead the highest level of fines under the GDPR, but other provisions of the law carry lesser fines that could be relevant.
A requirement for a company to have data protection by design “will certainly come into play,” Bason said. And there will likely be questions about “whether user data, especially passport information, was stored beyond what was necessary,” he said.