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Liability for Data Breaches: A Proposal for a Revenue-Based Sanctioning Approach

  • Maurizio Naldi
  • Marta Flamini
  • Giuseppe D’Acquisto
Part of the Lecture Notes in Computer Science book series (LNCS, volume 7873)

Abstract

Data breaches are a rising concern in personal data management. While the damages due to data breaches fall primarily on the end customer, the service provider should be held liable. A sanctioning approach is proposed to promote a greater responsibility by the service provider, where sanctions are proportional to the service providers revenues. The interactions between the customer and the service provider are modelled as a game, where the customer decides the amount of tolerable loss (a proxy for the amount of information released) and the service provider decides the amount of security investment. The solution of the game for a typical scenario shows that sanctions effectively spur the service provider to invest more in security and lead to a reduced data breach probability.

Keywords

Security investments Data Breaches Sanctions Privacy Security economics 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  • Maurizio Naldi
    • 1
  • Marta Flamini
    • 2
  • Giuseppe D’Acquisto
    • 1
  1. 1.Università di Roma Tor VergataRomaItaly
  2. 2.Università Telematica Internazionale UNINETTUNORomaItaly

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