Leaked Emails Cost MediaDefender Almost $1 Million

By Greg McNevin

November 22, 2007: The fallout from a recent email leak has caused more than just embarrassment for Internet security and anti-piracy firm MediaDefender, as the company has also been hit with US$825,000 (AU$929,500) in damages and legal fees.

MediaDefender made a name for itself as a piracy-fighter, working to stop the spread of movies, music and video over Peer 2 Peer (P2P) networks.

In September, 700MB of the firm’s internal emails found their way onto P2P networks, only to be joined soon after by some of its anti-piracy tools, a sensitive database and even a private phone call between the company and an Attorney discussing server security.

Now the apparent monetary damage from the leaks is surfacing, with a recent filing to the Securities and Exchange Commission (SEC) in the US showing that the company paying US$600,000 (AU$675,950) in compensation to its customers for the leak, and around US$225,000 (AU$253,500) going to legal fees.

The case shows that in the corporate world, a leak like this can be not only embarrassing (particularly if you’re a security firm), but also very costly.

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