Alaska Attorney General Treg Taylor announced on Wednesday that a coalition of 50 Attorneys General has reached a settlement with Marriott International, Inc. as the result of an investigation into a large multi-year data breach of one of its guest reservation databases.
The Federal Trade Commission, which has been coordinating closely with the states throughout this investigation, has reached a parallel settlement with Marriott. Under the settlement with the Attorneys General, Marriott has agreed to strengthen its data security practices using a dynamic risk-based approach, provide certain consumer protections, and make a $52 million payment to the states. Alaska will receive $376,629 from the settlement.
“Any business that collects and retains consumers’ personal information needs to have strong data protection policies and a plan to make sure those policies are actually being followed,” said Attorney General Taylor. “People need to be able to be confident that when they trust a business with their personal information it won’t end up in the hands of scammers and thieves.”
Marriott acquired Starwood in 2016 and took control of the Starwood computer network in 2016. However, from July 2014 until September 2018, intruders in the system went undetected. This led to the breach of 131.5 million guest records pertaining to customers in the United States. The impacted records included contact information, gender, dates of birth, legacy Starwood Preferred Guest information, reservation information, and hotel stay preferences, as well as a limited number of unencrypted passport numbers and unexpired payment card information.
Shortly after the breach of the Starwood database was announced, a coalition of 50 Attorneys General launched a multi-state investigation into the breach. Wednesday’s settlement resolves allegations by the Attorneys General that Marriott violated state consumer protection laws, personal information protection laws, and, where applicable, breach notification laws by failing to implement reasonable data security and remediate data security deficiencies, particularly when attempting to use and integrate Starwood into its systems.
Under the terms of the settlement, Marriott has agreed to strengthen and continually improve its cybersecurity practices. Some of the specific measures include:
- Implementation of a comprehensive Information Security Program. This includes new overarching security program mandates, such as incorporating zero-trust principles, regular security reporting to the highest levels within the company, including the Chief Executive Officer, and enhanced employee training on data handling and security.
- Data minimization and disposal requirements will lead to less consumer data being collected and retained.
- Specific security requirements apply to consumer data, including component hardening, conducting an asset inventory, encryption, segmentation to limit an intruder’s ability to move across a system, patch management to ensure that critical security patches are applied in a timely manner, intrusion detection, user access controls, and logging and monitoring to keep track of file and user movement within the network.
- Increased vendor and franchisee oversight, with a special emphasis on risk assessments for “Critical IT Vendors” and clearly outlined contracts with cloud providers.
- In the future, if Marriott acquires another entity, it must timely further assess the acquired entity’s information security program and develop plans to address identified gaps or deficiencies in security as part of the integration into Marriott’s network.
- For additional security oversight, Marriott’s information security program will be assessed by an independent third party every two years for 20 years.
These settlement terms are grounded in a well-developed risk-based approach in which Marriott not only needs to conduct an annual enterprise-level risk assessment but also performs risk analyses throughout the year for changes to security controls. Those ongoing risk assessments must address the criteria of “harm to others”—which would include potential harm to consumers.
As part of the settlement, Marriott will give consumers specific protections, including a data deletion option, even if consumers do not currently have that right under state law. Marriott must also offer multi-factor authentication to consumers for their loyalty rewards accounts, such as Marriott Bonvoy, and review those accounts if there is suspicious activity.
Connecticut, Maryland, and Oregon as well as the District of Columbia, Illinois, Louisiana, Massachusetts, North Carolina, and Texas co-led the multistate investigation, assisted by the Executive Committee of Alabama, Arizona, Arkansas, Florida, Nebraska, New Jersey, New York, Ohio, Pennsylvania, and Vermont, and joined by Alaska, Colorado, Delaware, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
Read the complaint.