Marriott International (MAR) has agreed to pay a penalty of $52 million and enhance its data security measures as part of a settlement with the Federal Trade Commission (FTC) and 49 state attorneys general, along with the District of Columbia. This settlement addresses charges related to multiple data breaches that occurred between 2014 and 2020, impacting over 344 million customers globally.
The FTC alleged that Marriott and its subsidiary, Starwood Hotels & Resorts Worldwide, failed to maintain adequate data security practices, including weak password controls and network monitoring. Importantly, the data breach exposed sensitive customer information, including passports, payment card details, loyalty program numbers, birthdates, and email addresses.
It should be noted that Marriott has agreed to allow U.S. customers to request the deletion of their personal information associated with their email address or loyalty rewards account number. Additionally, the company will review loyalty rewards accounts upon customer request and restore any stolen loyalty points.
Analyzing Marriott’s Legal Risk
Prior to this latest settlement, Marriott has occasionally been involved in legal issues. In 2020, a class-action lawsuit was filed in London against the company by several former guests seeking compensation for the massive data breach.
Despite these legal challenges, TipRanks’ Risk Analysis tool shows that Marriott’s legal and regulatory risk exposure is below the industry average. Interestingly, these risks account for 12.5% of its total risks, lower than the industry average of 18%.
Is MAR Stock a Good Buy?
Turning to Wall Street, MAR has a Hold consensus rating based on four Buys and 14 Holds assigned in the last three months. At $244.88, the average Marriott price target implies 6.49% downside potential. Shares of the company have gained more than 17% year-to-date.
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