British Airways is facing a £183 million (US$229 million) fine for a June 2018 data breach — the largest fine to date under the European Union's General Data Protection Regulation (GDPR).
According to a statement issued today, the Information Commissioner's Office (ICO) of the United Kingdom said it notified British Airways of its intent to levy the penalty for the company's security failings, which led to a half-million customers' information being harvested by a fraudulent site. The information commissioner for the UK warned that other companies could face similar penalties unless they better protect UK citizens' information.
"When an organization fails to protect [people's personal data] from loss, damage, or theft, it is more than an inconvenience," said Elizabeth Denham, the UK information commissioner, in a statement. "That's why the law is clear — when you are entrusted with personal data, you must look after it. Those that don't will face scrutiny from my office to check they have taken appropriate steps to protect fundamental privacy rights."
GDPR went into effect in May 2018, the same year both Equifax and Facebook were fined £500,000 by the UK for their violations of citizens' privacy due to the 2017 Equifax data breach and early 2018 Cambridge Analytica scandal.
Under GDPR, the fines would have been much higher. The current penalty against British Airways is 1.5% of the company's 2018 revenue of £13.0 billion (US$16.3 billion). EU nations' privacy commissioners can fine companies up to 4% of their annual revenues for the previous financial year, depending on the severity of the infringement.
"They have been fined 1.5 percent of their worldwide turnover in 2017, which is near the 2 percent maximum fine," said Guy Bunker, chief technology officer at cybersecurity company Clearswift, in a statement. "The good news is that the breach was picked up relatively quickly. BA has systems in place such that it could narrow down both how the incident happened and who was affected."
British Airways publicly announced the breach on September 6, 2018, stating that attackers were able to harvest data from its site during the payment process. The company claimed at the time that the breach only affected customers between August 15, 2018, and September 5, 2018.
The fact that the attackers stole information directly from the payment forms suggests the attack was linked to the MageCart group, which is also blamed for a breach earlier in 2018 of Ticketmaster's site, according to a September analysis of the attack by security firm RiskIQ.
"This attack is a simple but highly targeted approach compared to what we've seen in the past with the Magecart skimmer, which grabbed forms indiscriminately," said Yonathan Klijnsma, RiskIQ head researcher and report author, in the analysis. "This particular skimmer is very much attuned to how British Airways' payment page is set up, which tells us that the attackers carefully considered how to target this site instead of blindly injecting the regular Magecart skimmer."
Companies need to be on guard against such attacks. Unfortunately, less than 60% of all companies are currently meeting all, or most, of the GDPR's requirements, according to Cisco's 2019 "Data Privacy Benchmark Study." Almost 90% of companies expect to be meeting the requirements within the next year, the report points out.
Cisco did find companies that are GDPR-compliant have fewer data breaches, are able respond to data breaches faster, and are ultimately less impacted by the breaches that do happen.
"If a business the size of BA can be found wanting, smaller companies should be asking themselves whether their data security arrangements are up to scratch," said Susan Hall, an IT and data protection specialist lawyer and partner at Clarke Willmott, in a statement. "This reinforces the importance for businesses of having robust terms and conditions with anyone to whom they contract website development and hosting, and of carrying out penetration testing and constant security monitoring of all interfaces through which attacks can be launched."
The ICO notice is not a final determination. The agency will allow British Airways and other groups to comment before committing to the fine, ICO Commissioner Denham said.
"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," she said. "The ICO will consider carefully the representations made by the company and the other concerned data protection authorities before it takes its final decision."