The Irish Data Protection Commission (DPC) announced last week that it finalized a draft decision which, if implemented, would sanction and fine Twitter (TWTR) for a data breach. The Irish DPC has asked its counterparts across the European Union for their approval.
The decision relates to the media giant's handling of a data breach in late 2018 which it reported to the DPC. The DPC examined Twitter’s compliance with two aspects of the General Data Protection Regulation (GDPR), a strict set of European laws introduced in 2018.
The specific sections in question regulate the promptness of data breach disclosure, as well as companies' handling various aspects of breaches, such as record-keeping and documentation.
It is the first time the DPC has completed an inquiry into one of the major tech firms. Due to the EU-wide effects of the alleged violations, the Irish regulator has to share its draft decisions with other regulators, allowing them to weigh in and either approve or object to its findings.
The new GDPR rules give regulators the power to levy fines for violations of up to 4% of a company’s global revenue or 20 million euros ($22 million), whichever is higher, though the fine amount is discretionary.
Twitter representatives declined to comment on the Irish probes.
2020 has not been kind to Twitter stock, as it dropped from $39 before the coronavirus outbreak to its close at $32.62 on Friday. However, Merrill Lynch analyst Justin Post recently opined that Twitter is positioning its business for a 2021 rebound. He gave Twitter a $35 price target and added that while Twitter appears to be making the correct strategic decisions, near-term uncertainty limits upside.
“We are encouraged by user engagement growth, which we expect to translate to robust revenue growth in 2021 driven by updated ad products and the return of sports and other events,” Post wrote.
Twitter stock closed on Friday at $32.62. For the year, Twitter is down 14%, and analysts are mostly cautious on the stock. Based on 31 analyst ratings over the last 3 months, Twitter has a 12-month price target of $30.64, 6% downside potential from the current level. (See Twitter stock analysis on TipRanks).
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