Sony Faces Legal Action Over Data Theft
Sony Corp could face legal action across the globe after it delayed disclosing a security breach of its popular PlayStation Network, says a Reuters report.
Sony shut down the network on April 19 after discovering the breach, one of the biggest online data infiltrations ever. But it was not until Tuesday that the company said the system had been hacked and that users' data could have been stolen.
In the United States, several members of Congress seized on the breach, in which hackers stole names, addresses and possibly credit card details from 77 million users, says the report. One U.S. law firm filed a lawsuit in California on behalf of consumers.
Sony's PlayStation Network, a service that produces an estimated $500 million in annual revenues, provides access to online games, movies and TV shows. Nine out of 10 of PlayStation's users are based in the United States or Europe, the report says.
The report says that Sony would need to account for the loss of business -- as well as damage to its brand -- when it tallies up the cost. Other costs include notifying customers of the attack and bringing in experts to cleanse its network.
Larry Ponemon, chairman and founder of the Ponemon Institute, said the theft could cost Sony more than $1.5 billion, or an average of $20 for each of the 77 million customers whose data was potentially compromised.
Neither Sony CEO Howard Stringer nor Kazuo Hirai, who was appointed to the company's No. 2 position last month after building up Sony's networked services, have commented publicly.