Osano Discovers Direct Relationship Between Poor Privacy Practices and Data Breaches

Report shows that companies with the worst privacy practices lost seven times more records during each data breach than companies with the best practices

Osano, the industry leader of data privacy transparency, released a report analyzing the relationship between a company’s privacy practices and their likelihood of experiencing a data breach. The Osano Data Privacy and Data Breach Link reveals a predictive relationship between responsible privacy practices and security outcomes. Companies with inadequate data privacy practices are 80 percent more likely to suffer a data breach than those with the highest-ranked privacy practices and will face fines seven times larger than companies with the best scores in the event of a data breach.

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In response to the growing complexity of the data privacy landscape, Osano developed the Osano Privacy Score. This evaluation framework measures the privacy practices of the top 11,000 websites against 163 different factors — including if a company sells, shares or licenses data to third parties or affiliates, or if a company knowingly collects data about children under the age of 13 — to establish a clear and simple benchmark for privacy performance. In its analysis, Osano identified a recurring pattern, organizations with high privacy scores were less likely to experience a breach.

Key findings include:

  • Companies with the worst privacy practices are 80% more likely to experience a data breach.

  • Companies with the lowest privacy scores lost 600% more records than high-scoring companies.

  • The worst privacy actors are the least likely to be able to retrospectively identify the root cause of a breach.

  • Of the entities that get breached, governments have the worst scores.

  • Educational and government websites are 15x more likely to experience a breach than commercial sites.

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“In the face of nonstop breaches and increased data security awareness, consumer and shareholder confidence in businesses is slowly eroding. Businesses that fail to protect sensitive data will face serious negative consequences, and the report proves just how these phenomena move hand-in-hand.” said Osano Co-Founder and CEO, Arlo Gilbert. “There is a perception that privacy issues are akin to a speeding ticket — a risk worth running. Companies that don’t change their perception are facing higher odds of experiencing a data breach and losing the trust they’ve built with their customers.”

The correlations between data breaches and Osano Privacy Scores stem from many causes including willful ignorance, oversight of privacy best practices that increase risk exposure, and company culture. Another key link is third party vendors. The average company shares its data with 730 different vendors, and according to the Internal Auditors Research Foundation, third parties were responsible for two out of every three data breaches.

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