As the business world ventures further into the digital world, doing business theoretically becomes easier and more convenient for businesses and consumers.
However, as business increases online, so do the regulations. Every California business owner is probably now familiar with the California Consumer Privacy Act (CCPA). The law requires business owners to inform consumers how they will use their personal information and give them the option to opt-out of any such uses. If they do not comply with this requirement, business owners could face serious fines and legal consequences.
And as a recent case demonstrates, these consequences might only increase if a security breach puts consumer data at risk.
SECURITY BREACHES ALREADY POSE A SERIOUS RISK FOR BUSINESSES
A 2016 report from CNBC found that in 93% of data breaches where information was stolen, the breach occurred in mere minutes. It may only take a few minutes to breach and steal information, but these incidents can cause serious damage to businesses:
- IBM reports that a data breach costs businesses $3.92 million on average;
- Hackers could steal intellectual property and jeopardize business practices; and
- Data breaches involving consumer data also put the business’s reputation at risk.
When security breaches involve consumer data, businesses could also face legal consequences. We discussed this in a past blog post, regarding the federal lawsuit against Amazon and their partnership with Ring. However, it seems that the risk of litigation is only increasing with the CCPA.
RECENT CASES: THE RISK OF LITIGATION EXPONENTIALLY INCREASED UNDER THE CCPA
Although Baker & Associates is not involved in this case, it is important to highlight it. Business owners must understand the risks they face.
The retail giant Walmart Inc. is facing a class-action lawsuit under the CCPA after a hack put consumer data at risk. The proposed case claims that consumers could suffer significant damages, especially if hackers share their personal information on the dark web.
It seems that this issue is not unique to Walmart. Several businesses are facing lawsuits after security breaches. And with the new requirements under the CCPA, it does not seem that the high risk of lawsuits will decrease anytime soon.
BUSINESS OWNERS: TAKE SECURITY MEASURES SERIOUSLY
Business owners understand the importance of maintaining a high level of security, both in-person and in the digital world. With this increased risk of litigation, business owners must ensure they revisit their cybersecurity strategies to protect their business.