Marriott’s Starwood Data Breach Affects Up to 500 Million People

Marriott’s Starwood Data Breach Affects Up to 500 Million People

We’ve got another cyber attack being reported, this time for Marriott International and its Starwood business to the tune of up to 500 million guests. This puts it around the third worst attack in recent history. What will make this latest compromise even more noteworthy is it’s being one of the larger attacks since the European Union’s General Data Protection Regulation privacy law took effect in May. That’s a new development that Marriott and others will need to contend with, which could result not only in fines but also drive a pronounced pick up in cybersecurity spending. In thematic speak, that’s a potential tailwind for our Safety & Security investing theme.

Marriott International Inc. on Friday disclosed one of the biggest data breaches in history, a hack in the reservation database for its Starwood properties that may have exposed the personal information of up to 500 million guests.

News of the attack—rivaled only by the theft of information in 2013 and 2014 from internet company Yahoo—roiled customers of the world’s largest hotel company and lowered its stock price.

In addition to the size of the Marriott exposure, security analysts say the range of customer data potentially compromised—such as passport numbers, travel details and payment-card data—make the breach even more sensitive. Numerous regulators in the U.S. and abroad said they are monitoring the situation.

Marriott will face scrutiny from regulators, particularly in Europe where the European Union’s General Data Protection Regulation privacy law took effect in May, said Travis LeBlanc, a partner with Boies Schiller Flexner LLP. Although the Starwood breach predates GDPR, Mr. LeBlanc said because the unauthorized activity continued after the law went into effect, the incident would likely be subject to it.

Britain’s Information Commissioner’s Office, which can fine companies for failing to protect customers’ personal data, also is investigating. This year, the office fined major companies including Facebook Inc. and Uber Technologies Inc. for mishandling data.

The Marriott hack joins a list of breaches to hit the hospitality industry in recent years. Security analysts say the industry is a ripe target for criminal actors because of the wealth of financial and other information flowing through payment and reservation systems. It also is a highly fragmented business, in which large companies such as Marriott and Hilton Worldwide Holdings Inc. largely license their brands to property owners who manage the hotels.

Source: Marriott Says Starwood Data Breach Affects Up to 500 Million People – WSJ

About the Author

Chris Versace, Chief Investment Officer
I'm the Chief Investment Officer of Tematica Research and editor of Tematica Investing newsletter. All of that capitalizes on my near 20 years in the investment industry, nearly all of it breaking down industries and recommending stocks. In that time, I've been ranked an All Star Analyst by Zacks Investment Research and my efforts in analyzing industries, companies and equities have been recognized by both Institutional Investor and Thomson Reuters’ StarMine Monitor. In my travels, I've covered cyclicals, tech and more, which gives me a different vantage point, one that uses not only an ecosystem or food chain perspective, but one that also examines demographics, economics, psychographics and more when formulating my investment views. The question I most often get is "Are you related to…."

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