Yahoo hack casts doubts on Verizon acquisition

By:
James Pearce
Published on:

Operator says the data breach could have a "material impact" on its $4bn buyout of internet giant

Verizon has warned that Yahoo’s massive data breach could have a “material impact” on its £4 billion takeover of the internet giant.

The US carrier agreed to purchase the main part of Yahoo’s business in July, but the internet firm revealed earlier this month it had been the victim of one of the largest data breaches in US history, with data stolen from more than 500 million users.

Reports first emerged of Yahoo customer data being sold on the dark web days after Verizon had agreed to the acquisition, although it is unclear if these reports were related to the same breach revealed by Yahoo on 26 September.

A legal representative for Verizon, Craig Silliman, told reporters in the US: “I think we have a reasonable basis to believe right now that the impact is material and we're looking to Yahoo to demonstrate to us the full impact. If they believe that it's not then they'll need to show us that."

He added that Verizon was "absolutely evaluating [the breach] and will make determinations about whether and how to move forward with the deal based on our evaluation of the materiality".

A clause in the deal, first revealed by Fortune, means Verizon can withdraw if an event "reasonably can be expected to have a material adverse effect on the business". Reports have already emerged that the telco is looking to get a reduction of around $1 billion from the cost of the deal.

The hack, which Yahoo claims was carried out by “state hackers”, took place in 2014 but was only made public last month. Verizon said it found out two days before the internet company went public, advising customers to change passwords if they have not already done so.