Last year, Meta (formerly known as Facebook) agreed to pay $725m (£600m) to settle a lawsuit over a data breach linked to political consultancy firm, Cambridge Analytica.
As one of the worst data breaches in history, what exactly happened that created this lawsuit in the first place?
Since the dawn of mega tech companies such as Meta and Google, they have amassed unprecedented volumes of data on their users. This information is essentially the blueprint of the human mind, bringing insight into your exact likes, dislikes, biases, hobbies, income, pet peeves, personality, and psychology – you name it, they know it.
What happened during the Facebook Data Breach in 2016?
A researcher named Aleksandr Kogan, created a data harvesting trojan horse on Facebook, disguised as a personality quiz app. This allowed them to harvest data from 270,000 quiz takers – alongside the data of the friends of those quiz takers, friends of friends, and even your Aunt Deborah’s data. This resulted in more than 87 million users having their data harvested without permission – which is larger than the entire population of Germany.
Although this method of data collection is prohibited by Facebook, Cambridge Analytica bought the data for “academic purposes”… These personality profiles were then utilized by the Trump Campaign during the 2016 US election. And the rest is history.
Despite Meta claiming that this was “not a data breach” since no systems were infiltrated – the reality of the situation highlights the scary truth of data when privacy is breached and exploited.
The US saw law changes in the aftermath of this data breach, as states such as Vermont and California implemented legislation that requires data brokers that buy/sell data from 3rd parties to register with the state. Residents were also granted the ability to opt out of having their data sold. Although, it is pretty shocking that this wasn’t already a law.
In today’s interconnected digital world, data breaches have become a ubiquitous threat, with potentially devastating consequences for individuals, businesses, and societies at large.
The relentless advancement of technology has not only transformed the way we interact and conduct business but has also created new avenues for the exploitation of vulnerabilities and illegal access to sensitive information.
Meta wasn’t the first to experience the detrimental effects of data breaches. One of the most infamous incidents is the Equifax breach of 2017, wherein the personal and financial information of approximately 143 million consumers was exposed. This breach showcased the alarming vulnerabilities in even well-established companies’ security systems, leading to identity theft, financial losses, and erosion of consumer trust. As well, another significant breach was the Yahoo breach in 2013 and 2014, affecting a staggering 3 billion user accounts.
This breach highlighted the dire consequences of not promptly identifying and addressing security breaches, as the company faced legal repercussions, decreased valuation during acquisition, and reputation damage.
With all this talk about data breaches, it is important to define what a data breach is.
What is a Data Breach?
A data breach refers to an unauthorized access, disclosure, or acquisition of sensitive or confidential information. This information can encompass a wide range of data, including personal details, financial records, medical records, trade secrets, and intellectual property.
There are 2 types of breaches: Intentional and unintentional.
The breach can be intentional, as in the case of cyberattacks carried out by hackers, or unintentional, such as when an employee inadvertently shares sensitive information.
The Expensive Impact of Data Breaches
The financial implications of data breaches can be staggering. According to IBM‘s “Cost of a Data Breach” report released in 2022, the worldwide average cost of a data breach is $4.35 million USD.
This includes costs related to the investigation, mitigation, legal fees, regulatory fines, customer notification, and lost business opportunities. However, for larger breaches, as we’ve seen with the likes of Meta, the costs can soar into hundreds of millions of dollars.
Not only that, but data breaches can also lead to long-term financial consequences. Shareholder value can plummet, as seen in the case of Equifax and Yahoo. Companies may also incur expenses related to improving cybersecurity measures, reimbursing affected customers and potential lawsuits.
Why Data Breaches Occur
Data breaches are the result of vulnerabilities in systems and processes. Some common mechanisms for exploiting these vulnerabilities include:
Phishing Attacks: Cybercriminals use deceptive emails or messages to trick users into revealing sensitive information or clicking on malicious links.
Malware and Ransomware: Malicious software is used to gain unauthorized access or to encrypt data until a ransom is paid.
Weak Authentication: Insufficient password protection and weak authentication processes provide easy entry points for hackers.
Insider Threats: Employees or contractors with access to sensitive information may intentionally or unintentionally compromise data security. Insider threats can emerge due to personal grievances, negligence, or lack of proper training.
Third-Party Vulnerabilities: Cybercriminals may exploit vulnerabilities in third-party vendors’ systems to gain access to larger networks.
System Vulnerabilities: Breaches can arise from outdated software, inadequate security protocols, and insufficient investment in cybersecurity infrastructure.
However, it’s important to note that the reasons behind data breaches are multifaceted. Hackers with malicious intent may want to seek financial gain, have political motivations, want to gain a competitive advantage, or simply live for the thrill of outsmarting security systems.
On the other hand, data breaches can be a result of negligence and innocent human mistakes. Though not having the proper securities in place leaves your organization an easy target for the latter.
Prevention Methods and Models
Preventing data breaches requires a comprehensive and multi-layered approach that involves 3 pillars: technology, processes, and awareness. Some effective prevention methods that every organization should employ include:
Technology
Encryption: Encrypting sensitive data ensures that even if a breach occurs, the stolen data remains unreadable without the appropriate decryption key.
Regular Software Updates: Keeping software up to date patches known vulnerabilities that cybercriminals may exploit.
Firewalls and Intrusion Detection Systems: These provide a barrier against unauthorized access and can alert administrators to potential threats.
Processes
Access Control: Implementing strict access controls ensures that only authorized personnel can access sensitive information.
Incident Response Plan: Having a well-defined plan in place to respond to data breaches can minimize damage and speed up recovery.
Vendor Risk Management: Assessing the security measures of third-party vendors can prevent breaches originating from their systems.
Awareness
Employee Training: Educating employees about cybersecurity best practices and the dangers of phishing can significantly reduce the risk of breaches.
Hiring Data Consultants: Hiring a data professional will allow your organization to gain a holistic and well-rounded view of the current state of your data, and how to optimize it to improve regulatory compliance.
Preventative Models: Employing preventative strategies and frameworks can aid your organization in safeguarding your data. Models include:
- NIST Cybersecurity Framework provides a structure for improving cybersecurity posture through five core functions: Identify, Protect, Detect, Respond, and Recover.
- The Zero Trust Model operates on the principle of assuming that no one, whether inside or outside the organization, can be trusted, and enforces strict identity verification and access controls.
- The Defense in Depth strategy involves deploying multiple layers of security measures to create a formidable barrier against breaches. These layers act as a backup to ensure that the threat is stopped along the way.
The cost of data breaches extends beyond financial losses, permeating into the realms of trust, reputation, and societal well-being. As technology continues to advance, so do the methods and techniques of cybercriminals.
However, by learning from the expensive examples seen in the likes of Meta and Equifax, understanding why breaches occur, and implementing robust prevention methods and models, organizations can significantly reduce the risks of data breaches. The fight against data breaches is a continuous one, requiring vigilance, adaptability, and a commitment to upholding the privacy and security of digital interactions.
Ready to unlock your organization’s full potential? Contact us today and transform your organization’s data challenges into opportunities.
