Hotelier Marriott International disclosed in a filing with the Securities and Exchange Commission on Tuesday that the U.K.’s Information Commissioner’s Office intends to fine it for breaches of the EU’s data protection law.
Following what the agency termed “an extensive investigation,” the ICO, the U.K.’s independent regulator for data protection and information rights law, has issued a notice of its intention to fine Marriott £99,200,396 (roughly U.S. $124 million) for infringements of the General Data Protection Regulation.
The ICO was notified of by Marriott in 2018 of a cyber-incident that led to the proposed fine. A variety of personal data contained in approximately 339 million guest records globally was exposed by the incident, of which around 30 million related to residents of 31 countries in the European Economic Area. Seven million of the affected files were related to U.K. residents.
The vulnerability is believed to have begun when the systems of the Starwood hotels group were compromised in 2014. Marriott subsequently acquired Starwood in 2016, but the exposure of customer information was not discovered until 2018. The ICO’s investigation found that Marriott “failed to undertake sufficient due diligence when it bought Starwood and should also have done more to secure its systems.”
“The GDPR makes it clear that organizations must be accountable for the personal data they hold. This can include carrying out proper due diligence when making a corporate acquisition and putting in place proper accountability measures to assess not only what personal data has been acquired, but also how it is protected,” U.K. Information Commissioner Elizabeth Denham said in a statement. “Personal data has a real value so organizations have a legal duty to ensure its security, just like they would do with any other asset. If that doesn’t happen, we will not hesitate to take strong action when necessary to protect the rights of the public.”
Marriott has cooperated with the investigation and has made improvements to its security arrangements since these events came to light, the ICO said. The company will have an opportunity to make representations to the ICO as to the proposed findings and related fine.
“We are disappointed with this notice of intent from the ICO, which we will contest,” said Marriott International President and CEO Arne Sorenson in a statement. “We deeply regret this incident happened. We take the privacy and security of guest information very seriously and continue to work hard to meet the standard of excellence that our guests expect.”
The Marriott announcement comes one day after British Airways was hit with the largest penalty to date under the GDPR, a £183.39m (U.S. $230 million) fine stemming from the compromised data of nearly 500,000 customers.
Also on Tuesday, the ICO published an annual report that cites an “unprecedented year” for the regulator. In the report, the ICO notes that the number of data protection complaints it received nearly doubled, increasing from 21,019 in 2017-2018 to 41,661 in 2018-2019 (covering 12-month span that ended March 31).