The Internet has gradually brought about fundamental changes in corporate data collection and security. Companies have more information about their customers today than ever before - and when a data breach occurs, it affects millions of people. The Internet also ensures that there is virtually no way to cover up the bad news of a data breach - people will find out eventually. Just ask Yahoo - they suffered a breach that affected 500 million accounts and tried to keep the news quiet for two years.
Yahoo isn't the only major company that suffered a recent data breach. A 2013 network breach at Target compromised the credit card account details of about 70 million consumers.
When corporations fail to protect the data that they collect, consumers feel frightened. What if their passwords or financial details are among those compromised? Will someone steal their money or personal information?
The negative publicity and loss of consumer confidence can also harm the compromised company severely. Lost sales, decreased stock value and potentially government fines can combine to create a deep financial hole.
So, how did Yahoo and Target fare after their very public data breaches? In this article, we'll examine the aftermath of those events and learn more about what the companies have done to recover.
The past year has been a difficult one for Yahoo. In July of 2016, the once mighty Internet pioneer announced that Verizon would purchase Yahoo's primary business operations for $4.83 billion -- a paltry sum compared to the $100 billion valuation Yahoo once enjoyed. Before the end of the year, news broke that Yahoo had suffered several major data breaches from 2013-2016.
- In 2013, a hacker compromised the details of more than 1 billion Yahoo accounts.
- In 2014, a hacker compromised the details of more than 500 million Yahoo accounts.
- In 2015 and 2016, a vulnerability allowed hackers to access Yahoo accounts without passwords by forging the necessary access credentials.
In 2017, Yahoo was still working to clean up the mess caused by all of the bad news. Fearing that it would need to shoulder some of the liability, Verizon cut its bid for Yahoo by $350 million.
The Securities and Exchange Commission opened an investigation in an attempt to determine how the breaches occurred and find out why it took so long for the news to break. Yahoo also created a new executive position to manage its security concerns and created an internal committee to investigate the data breaches.
During the 2013 holiday shopping season, Target suffered one of the most damaging data breaches in history when malware compromised its point of sale systems.
Attackers were able to harvest the credit card information of approximately 70 million Target customers. The resulting class-action lawsuits cost Target $49 million in settlement fees. The breaches harmed Target's reputation so badly that the company's board eventually asked then-CEO Gregg Steinhafel to resign. The breach and subsequent resignation of Steinhafel cost Target a further $61 million in severance pay.
To rebuild its reputation, Target implemented much stricter security policies after the data breach. Although many retailers were already beginning to support the new EMV-compliant or "chip" credit cards at that time, Target became one of the first major retailers to support chip cards in all of its stores.
Target also replaced its own company-issued credit and debit cards with EMV-enabled variants. Target joined forces with other merchants to collaborate on combating security threats. The company also upgraded the security settings on its POS terminals so they would only run pre-approved software in the future.
An official estimate from Target suggests that the breach cost the company a gross total of $252 million. However, insurance payments and tax deductions lowered Target's expenses significantly.
Is Your Company Ready to Face Emerging Threats?
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