IAG share price: what's next after record fine for British Airways?
IAG share price falls after the UK Information Commissioner's Office threatens a record fine against British Airways.
IAG share price fell 2% after an impending record fine against the British Airways owner. British Airways faces a fine of £183.39 million from the UK Information Commissioner's Office (ICO) for a data breach involving 500,000 customers. The fine would be equal to 1.5% of British Airways’ annual revenue.
IAG fine details
British Airways could face a heavy fine because of a large data breach involving hundreds of thousands of customers having their financial data exposed in 2018. Clients were redirected from the British Airways site to a fake website that collected customers’ personal details.
The ICO said that British Airways violated the General Data Protection Regulation (GDPR) when the customers’ data were compromised. Information Commissioner, Elizabeth Denham, said in a statement that British Airways failed to protect the private information of clients.
‘People’s personal data is just that – personal’, said Denham.
‘When an organisation fails to protect it from loss, damage or theft it is more than an inconvenience. That’s why the law is clear – when you are entrusted with personal data you must look after it. Those that don’t will face scrutiny from my office to check they have taken appropriate steps to protect fundamental privacy rights,’ added Denham.
IAG responds to impending ICO fine
IAG responded to the ICO fine in a statement. Alex Cruz, British Airways' chief executive officer (CEO), said that the airline responded quickly to the data breach and no customers’ bank accounts were directly impacted.
'We are surprised and disappointed in this initial finding from the ICO. British Airways responded quickly to a criminal act to steal customers’ data. We have found no evidence of fraud/fraudulent activity on accounts linked to the theft. We apologise to our customers for any inconvenience this event caused,’ said Cruz.
British Airways still has 28 days to appeal the decision. IAG chief executive officer (CEO), Willie Walsh, indicated that the corporation would appeal the fine.
'We intend to take all appropriate steps to defend the airline's position vigorously, including making any necessary appeals,' said Walsh.
Analysis of IAG fine
Gita Shivarattan, data protection counsel at the Ashurst law firm, noted that the impending fine against IAG shows how seriously the ICO takes the GDPR.
‘European data protection regulators are clearly ramping up fines for data breaches. It reflects the seriousness of the regulators where there is a significant breach of GDPR obligations,’ said Shivarattan.
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