Clorox Files Lawsuit Against Cognizant Following Cyberattack Incident
BENGALURU: Clorox, a prominent US household goods manufacturer, has filed a lawsuit against Cognizant, seeking $380 million in damages. The lawsuit alleges that Cognizant’s service desk inadvertently granted cybercriminals access to Clorox’s network by failing to properly verify the identity of a requester. This breach led to a significant cyberattack that severely disrupted Clorox’s operations, prompting the company to seek damages for the extensive financial losses incurred.
Details of the Allegations
In its complaint, Clorox claims that the cyberattack was devastating, paralyzing its corporate network and crippling business operations. The company asserts that when it sought assistance from Cognizant for incident response and disaster recovery, the support provided was inadequate and exacerbated the situation. Clorox estimates that the total damages from the attack amount to approximately $380 million. This figure includes over $49 million in costs related to remediation efforts to address the damage caused by what Clorox describes as Cognizant’s preventable errors. Additionally, the company cites hundreds of millions of dollars in business interruption losses, as the attack hindered its ability to fulfill orders and maintain product availability for retailers.
Background of the Agreement
Clorox and Cognizant entered into a service agreement in 2013, which included provisions for service desk support and identity management. Under this agreement, Cognizant was responsible for operating the service desk and providing IT support to Clorox employees, including credential recovery services. The lawsuit details a specific incident on August 11, 2023, when a cybercriminal contacted the Cognizant service desk, impersonating a Clorox employee to request a password reset for Okta, an identity management tool used by Clorox. The complaint alleges that the service desk agent failed to conduct proper identity verification and reset the password without additional checks, violating Clorox’s established protocols.
Cognizant’s Response
In response to the lawsuit, a spokesperson for Cognizant expressed surprise at Clorox’s claims, suggesting that the company should take responsibility for its internal cybersecurity measures. The spokesperson stated that it is shocking for a corporation of Clorox’s size to have such inadequate cybersecurity systems in place to prevent such attacks. Cognizant maintains that it was contracted for a limited scope of help desk services and did not manage Clorox’s overall cybersecurity. The spokesperson emphasized that Cognizant performed its duties reasonably within the framework of the agreement.
Implications of the Lawsuit
The lawsuit highlights significant concerns regarding cybersecurity practices and the responsibilities of service providers in protecting client networks. As cyber threats continue to evolve, companies must ensure robust security measures and protocols are in place to prevent unauthorized access. The outcome of this case could set important precedents regarding accountability in the realm of cybersecurity, particularly for third-party service providers. As the legal proceedings unfold, both Clorox and Cognizant will likely face scrutiny over their cybersecurity practices and the implications of this incident on their reputations and future business operations.
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