Privacy Breaches In M&A Deals And The Importance Of Data Security Diligence

In 2006, British mathematician Clive Humby famously declared "data is the new oil." Indeed, data is becoming increasingly important in a growing number of industries. That is why, when deciding whether to proceed with an M&A transaction, it is imperative to assess the privacy and data security controls of the target company.

As we have written about in the past, numerous privacy issues can negatively impact an M&A transaction. A company's failure to comply with CASL¹ can potentially lead to serious fines. A company's mismanagement of consent can render large amounts of personal information virtually useless. With overhauls to Canada's privacy regime (including serious penalties) both in progress and on the way, bringing a company's privacy management program up to standard is only becoming more costly.