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I spy with my beady eye ...

Jul 11, 2019

NBlog July 11 - not playing by the rules

According to the BBC, British Airways has been fined £183m for last year's breach of the General Data Protection Regulation, dwarfing the previous record fines of £½m under the previous Data Protection Act.  

Ouch. Privacy compliance is now A Thing - A Very Big Scary Thing with Sharp Teeth, Claws and a Bad Attitude.

The prosecution and fine broadcasts a clear message that organizations are going to be held to account under GDPR for failing to prevent privacy breaches. I guess privacy officers, information risk and security managers, CISOs, CROs, CCOs and execs generally are now scrambling to gain assurance that their organizations are not going to end up in the same mess. And management at organizations which have suffered privacy breaches since GDPR came into effect, especially if they are currently under investigation or being prosecuted, must be quaking in their hand-made Italian leather boots. 

At 366 times the previous record, the BA fine is deliberately shocking. No wonder BA is talking about appealing the decision ... but it could have been even worse. Reportedly the fine was 1.5% of BA's global turnover, while the maximum for specific penalties under GDPR is 4%: that would have been an eye-watering £488m, or about US$600m

Gulp.

Airline profits are unusually volatile thanks to intense competition and factors largely outside management's control, such as fuel prices and significant incidents that affect the global travel industry. BA might conceivably need to call on its parent company or the banks for assistance to settle the bill without taking a corporate nose-dive. Even cancelling executive bonuses seems unlikely to be enough.

Having said that, any well-run organization will have identified, evaluated and treated their privacy and other information risks, including making contingency and other business continuity arrangements just in case serious incidents such as this occur. Compliance is a good reason to manage information risks professionally, on top of the many good business and social reasons for taking it seriously.

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