What will be the consequences of the massive data breach at Yahoo affecting 500 million accounts?

An investigation by Yahoo confirmed that personal information linked with at least 500 million user accounts was stolen.

This is due to a data breach which took place in the last months of 2014. The stolen information included names, email addresses, dates of birth, telephone numbers, some passwords, and also a number of security questions & answers. Yahoo also stated that card payment and bank account information was not stolen.

Yahoo is now recommending users to change their passwords if they haven’t changed them after 2014.

All this comes at an uncomfortable time for Yahoo as it is in the middle of selling its digital operations to Verizon Communications for $4.8 billion.

Consequences:-

• As Verizon doesn't know much about the data breach, the company wants to evaluate every detail of the breach and its investigation.

“We will evaluate as the investigation continues through the lens of overall Verizon interests, including consumers, customers, shareholders and related communities,” the company said in a statement.

• This news could slow things down in regards to the Verizon-Yahoo deal as the deal doesn't close until next year.
• The breach would cause trouble for the both companies: adversing press, regulator inspections and the major user base creating a fuss.

Analyst Robert Peck of SunTrust Robinson Humphrey said the breach wasn't seemingly enough to make Verizon abandon its deal with Yahoo, but it could call for a price decrease of $100 million to $200 million, depending on how many users leave Yahoo.

Steven Caponi, an attorney at K&L Gates with a practice including merger litigation, said that Yahoo's breach could fall under the "material adverse change", clause common in mergers allowing a buyer to walk away if its target's value decreases.

"That would give Verizon the opportunity to renegotiate the terms or potentially walk away from the transaction if it is a material change. Whether it is a material change will depend in large part on what kind of information was compromised," Caponi said.

Courtesy : Quora