www.lexpert.ca | LEXPERT • December 2015 | 33
CYBERCRIME
CYBERCRIME, principally data breaches and the theft of personal and corporate
information, now ranks as one of the top economic crimes worldwide. Cybercriminals
do not discriminate. Hackers are truly equal-opportunity actors.
There is no area of the world, no company, no government agency and no sector of the
economy that is immune from cyberattack. Iconic companies such as Target, Blue Cross
Blue Shield, Anthem, Neiman Marcus, Home Depot, T.J. Maxx, Sony, J.P. Morgan
and Heartland Payment Systems have suffered data breaches. Government offices, in-
cluding, most recently, the Office of Personnel Management in the United States, have
likewise been targeted. As Fortune magazine (July 1, 2015) put it, quoting an old line,
in an article about the hacking of Sony Pictures ("The Hack of the Century"), there are
two kinds of companies: "Those that have been hacked, and those that don't yet realize
they've been hacked."
Retailers have been especially vulnerable to data breaches. According to the 2014
Trustwave Global Security Report, retail was the top industry compromised by data
breaches, accounting for 35 percent of attacks investigated. The food, beverage and hos-
pitality industries accounted for 29 percent of total breaches. Finance and professional
services accounted for a further 17 percent of intrusions.
The fallout from data breaches is enormous. The consequences of a hack can dam-
age company performance for years. The financial costs alone – in terms of investiga-
tion, containment, remediation, credit card replacement expenses, credit-monitoring
expenses, regulatory fines, penalties imposed by credit card brands and litigation – can
be significant, running to the millions and even tens of millions of dollars. For example,
Barbarians at the Firewall:
Data Breaches, Cross-Border
Commerce and Notification
Requirements in Canada
and the United States
The fallout for companies from data
breaches is immense, as consumer trust
and investor confidence is eroded and
the financial costs run into millions of dollars
BY GEORGE J. POLLACK; DAVIES WARD PHILLIPS & VINEBERG LLP
