Hotel firm Marriott to be fined £99 million for customer data breach

Hotel chain Marriott is facing a fine of £99 million over a data breach which is estimated to have affected around 339 million customers.

The Information Commissioner’s Office (ICO) fine relates to a data breach at the company believed to have originated in the systems of the Starwood hotels group in 2014.

Marriott acquired Starwood in 2016 but the breach was not disclosed until November last year.

The ICO said the hotel chain had failed to undertake due diligence when it bought Starwood and should have done more to secure its systems.

Last year, the General Data Protection Regulation (GDPR) was introduced in Europe, which gave regulators increased powers to levy larger fines against companies for data breaches.

Starwood hotels, include Trump Turnberry in Ayrshire, London’s Park Lane Sheraton Grand, Westbury Mayfair and Le Meridien Piccadilly.

Marriott International’s president and chief executive Arne Sorenson said the company was “disappointed” with the ICO’s announcement and said it would contest the fine.

“Marriott has been co-operating with the ICO throughout its investigation into the incident, which involved a criminal attack against the Starwood guest reservation database,” he said.

“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 from Marriott.”

When first disclosing the breach, the hotel firm said the guest records of around 339 million people had been accessed and said it believed more than five million un-encrypted passport numbers were part of the information accessed.

Seven million records were said to be related to UK residents.

Information Commissioner Elizabeth Denham said: “The GDPR makes it clear that organisations 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.

“Personal data has a real value so organisations 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.”

On Monday, British Airways was issued with a £183 million fine by the ICO over its own 2018 data breach.

That was the largest fine ever to be issued by the regulator, with the penalty imposed on Marriott now the second largest.

These are the first major penalties to be issued under GDPR rules, but are unlikely to be the last.

Figures released by the ICO in May revealed that the number of personal data breaches reported to the regulator between the introduction of the new laws on May 25 2018 and early May this year was four times that of the year before its rollout, rising from 3,311 to 14,072 breach notifications.

However, the ICO said more than 12,000 of these cases had already been closed and less than 0.5% had required a monetary penalty.