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Author: Scarinci Hollenbeck, LLC
Date: December 12, 2018
The Firm
201-896-4100 info@sh-law.comUber Technologies, Inc. (Uber) agreed to pay a record $148 million to settle accusations that it intentionally concealed a 2016 data breach that exposed the personal information of 57 million riders and drivers. Uber reached
According to reports, in November 2016, hackers notified security officials at Uber that they had stolen user information, which included names, email addresses, mobile phone numbers, and drivers’ license information. After providing proof of the massive data breach, the hackers demanded Uber pay a ransom to delete the data and not disclose the breach. Uber ultimately paid the hackers $100,000 to conceal the breach.
In the spring of 2017, Uber’s Board of Directors retained a law firm to investigate Uber’s security team in the wake of unrelated litigation involving the alleged theft of trade secrets related to self-driving cars. The investigators subsequently discovered the breach and ransom payment. Uber didn’t provide notice of the breach until November 2017, a year after the breach. The company later fired the two executives that approved the ransom payment.
The massive data breach and untimely disclosure prompted investigations by the Office of the New York Attorney General, along with numerous other state attorneys general. The recent settlement is the result of a multi-state probe that includes all 50 states, and the District of Columbia. In addition to the multi-million-dollar fine, the settlement requires Uber to adopt model data breach notification and data security practices and a corporate integrity program for employees to report unethical behavior, and hire an independent third party to assess its data security practices.
“This record settlement should send a clear message: we have zero tolerance for those who skirt the law and leave consumer and employee information vulnerable to exploitation,” New York Attorney General Barbara Underwood said. “We’ll continue to fight to protect New Yorkers from weak data security and criminal hackers.”
Uber has publicly stated that it has already started the process of overhauling its cyber and data security practices. As with other high-profile data breaches, there are a few lessons that other companies can learn from Uber’s mistakes:
As the potential risk and liability associated with data breaches continue to grow, businesses must be proactive. Consulting with attorneys knowledgeable in cybersecurity risk analysis and mitigation can help businesses of all sizes navigate the process.
If you have any questions or if you would like to discuss the matter further, please contact me, Fernando M. Pinguelo, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.
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