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Information security and breach of contract

by | May 6, 2021 | Uncategorized |

Last month, news broke of a breach of contract dispute between a commercial computing platform and two of its customers over alleged privacy breaches. The company, Salesforce, offers customer relationship management capabilities that allow their clients to track customer activity and complaint resolution. Data of this nature is highly telling, and not adhering to privacy requirements leaves those companies open to significant liability.

How would data-sharing breach contract?

The companies agreed to use Salesforce’s software, provided that the data collected remained confidential. They allege that Salesforce used the data to create a “use case” as a form of marketing material to other firms.

For those outside of the tech industry, a use case is a scenario for the use of a piece of software. Salesforce identified examples of how its data collection techniques and aggregation served a good use to a company. The allegations state that Salesforce created use cases specifically to circumvent the agreements on data sharing and use.

Why is customer activity data so important?

How customers interact with your company tells you whether they are happy or unhappy with your services. How they use your services tells you what is valuable. What they complain about tells you what you may need to fix. These are basic concepts.

Taken together as databases for a complex report, you may acquire an insight into future direction or needs that are currently underserved. Data at that level demands security and protection because if it is shared with a competitor, it can be used against you. If shared with a client, this data can alter their expectations. If shared with the general public, this level of data can raise uncomfortable general questions about the information you collect.

Protect customer data, protect your company

Consumers care deeply about their data security. That care might manifest in various ways, but it is there and existent, and companies ignore those feelings at their own risk. However, as this example shows, if a vendor creates a liability for your company in violation of your contracts, you have options.