Ashley Madison, the site which promotes cheating and STD sharing, has been under investigation for a breach in its data management system that saw 36 million account details published online but now will only have to pay $1.6 million USD of a $17.5 million settlement to the US Federal Trade Commission.
According to an FTC spokesperson the rest of the settlement was suspended due to parent company Ruby Corp being unable to pay the fine because of financial difficulties. They are facing lawsuits and other investigations into their practices including a major class action lawsuit by consumers.
“I recognize that it was a far lower number frankly than I would have liked,” said Federal Trade Commission chairwoman Edith Ramirez. “We want them to feel the pain. We don’t want them to profit from unlawful conduct. At the same time, we are not going to seek to put a company out of business.”
Due to the lower settlement number, Ashley Madison customers affected by the breach won’t receive any financial compensation. Class action lawsuits are still pending.
Even though the company admits they can’t pay the larger fine, they still came out with the following statement: “The company is stable. We’re very pleased with the outcome,” said Rob Segal, who took over as CEO earlier this year. Founder Noel Biderman left the company to travel the world with the money he made.
Yet, that’s not the only problems: In August, the Privacy Commissioner of Canada and the Office of the Australian Information Commissioner ran a joint investion on Avid Life Media (Ruby Corp’s former name). The investigation found that there were inadequate authentication processes for employees accessing the company’s system remotely, poor key and password management practices, and poor encryption processes.