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Sony Fined Nearly $400,000 By U.K. Data Protection Watchdog For 2011 PlayStation Network Hack, Plans To Appeal (Updated)

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Sony has been fined by the U.K.’s data protection watchdog for the April 2011 data breach of the PlayStation Network which compromised the personal details of millions of users. The Information Commissioner’s Office (ICO) has fined the company close to $400,000 (£250,000) for the breach, describing it as “a serious breach of the [U.K.’s] Data Protection Act” (DPA).

The PlayStation Network hack compromised users’ names, addresses, email addresses, dates of birth and account passwords. Customers’ payment card details were also at risk, according to the ICO, which — having investigated the event — has concluded that the hack attack could have been prevented if Sony’s software had been up-to-date, while  “technical developments” also meant passwords were not secure.

The ICO is empowered to levy a fine on companies if there is a serious breach of section 4(4) of the DPA which states:

(4)Subject to section 27(1), it shall be the duty of a data controller to comply with the data protection principles in relation to all personal data with respect to which he is the data controller.

Commenting on the fine, David Smith, Deputy Commissioner and Director of Data Protection, said Sony — a company that was processing card payments for its service — should simply have “known better”.

“If you are responsible for so many payment card details and log-in details then keeping that personal data secure has to be your priority. In this case that just didn’t happen, and when the database was targeted – albeit in a determined criminal attack – the security measures in place were simply not good enough,” he said in a statement. “There’s no disguising that this is a business that should have known better. It is a company that trades on its technical expertise, and there’s no doubt in my mind that they had access to both the technical knowledge and the resources to keep this information safe.”

Smith described the penalty on Sony as “substantial”, adding: “The case is one of the most serious ever reported to us. It directly affected a huge number of consumers, and at the very least put them at risk of identity theft.”

Update: Sony Computer Entertainment Europe told TechCrunch it is planning to appeal the ICO’s ruling, arguing in a statement that it was the victim of a “focused and determined criminal attack” and that there is no evidence that users’ encrypted card details were accessed during the data breach. Here’s Sony’s statement in full:

Sony Computer Entertainment Europe strongly disagrees with the ICO’s ruling and is planning an appeal.

SCEE notes, however, that the ICO recognises Sony was the victim of “a focused and determined criminal attack,” that “there is no evidence that encrypted payment card details were accessed,” and that “personal data is unlikely to have been used for fraudulent purposes” following the attack on the PlayStation Network.

Criminal attacks on electronic networks are a real and growing aspect of 21st century life and Sony continually works to strengthen our systems, building in multiple layers of defence and working to make our networks safe, secure and resilient. The reliability of our network services and the security of our consumers’ information are of the utmost importance to us, and we are appreciative that our network services are used by even more people around the world today than at the time of the criminal attack.