> Avaya. will pay a $1 million civil penalty;
> Check Point will pay a $995,000 civil penalty; and
> Mimecast will pay a $990,000 civil penalty.
With the exception of Mimecast, these are companies that are bringing in billions of dollars in revenue annually. How is this supposed to deter them?
Unisys and Avaya are both security vendors. This absolutely is a bad look for them, as almost every Security RFP asks about internal controls and how a vendor has remediated against these issues, and this is ammunition for any competitor to ask a prospect to re-evaluate purchases from either due to misrepresenting their security procedures.
Furthermore, Unisys only has an operating profit of around $200M a year, so a $4M fine is fairly brutal (that's an entire security team's operating budget for a company at Unisys' size).
Avaya's is smaller still, so that $1M is fairly brutal for them
The SW supply chain attack is one of the most brilliant cyber attacks in recent history. They hit a train load of gold bars, and had a much as 14 months of dwell time with potentially 18,000 customers. Discovery must have been disappointing for the attackers.
If you follow the most important rule, secrecy, you get plausible deniability and small-er fines.
The reason why companies get breached is because the systems being breached are all legacy. Company A buys company B who bought company C, which merged with company D. C fires D's old IT department, because it's redundant, so now D's billing system is being managed by C's IT department. C then sells itself to B, who has a much more robust billing system. At this point, it'd make sense to replace the billing system from D, but everyone who knew how it worked got fired in the C/D merger. So it sits around because nobody wants to break that part of the business. Then A buys B and does another round of layoffs, so anyone who even knew about this is gone.
Ten years and hundreds of iterations of this exact cycle later, you get an e-mail from a stranger saying they found all your customer records being sold on a cybercrime forum. Your IT department scrambles to remediate a breach in a system they've never heard of that nobody remembers installing or maintaining. It's just always been there. Corporate amnesia runs deep. People are finding forgotten old servers running unpatched versions of Windows Server 2003 that were so ritualistically overlooked you'd need to be high on Class Z mnestics just to perceive them.
Every enterprise IT department is like this. That's why companies get breached so damned often. There is never enough time in the budget to properly document legacy systems, nor are the decision-makers at the top even aware of the fact that they exist. Their job is to eat things, and they eat voraciously. If you want to stop this from happening, you need to make M&A illegal, not just inflict more pain to the invisible arms the corporate body cannot perceive pain from.
That's because it's not understood what a liability allowing this to occur is. Perhaps if we fine them based on revenue they would understand that IT is a core part of their company and can no longer live on the edges of the business units.
* ie a practical precedent, not a legal one
Percent of revenue fines regressively to margin.
10% of Walmart's revenue is 4 years' profits. 10% of Equifax's is a few quarters'. Moreover, you'd have a bureaucrats' delight of companies splitting revenues across entities while courts have to litigate common control claims. Unless you have a good reason to punish low-margin businesses more heavily than high-margin ones, this is an inefficient scheme.
Better: fines based on damages, trebled.
Except damages for data leaks are kind of hard to compute, since in practice they're $0 until some of the data is provably used to cause some non-$0 worth of damage down the line.
Through private action, yes. Use statute to define damages as a function of number of people affected, type of data released and whether the company self reported or was caught, by the public or a regulator. Add enhancements if the company was reckless, the data was out there for longer than a month or if it was accessed by foreign adversaries.