The Clorox Co. has filed a lawsuit against its longtime IT services provider, Cognizant, following a devastating cybersecurity breach that resulted in an estimated $380 million in damages.
Clorox filed the lawsuit in California state court. It alleges that Cognizant’s failure to follow Clorox’s established procedures for credential verification enabled a cybercriminal to gain access to Clorox’s network in August 2023. According to Clorox, a simple phone call to Cognizant’s service desk led to the theft of login credentials, compromising the company’s entire network.
Why Clorox sued Cognizant
Clorox claims that despite assurances from Cognizant, its staff repeatedly failed to authenticate users properly, allowing the cybercriminal to exploit the company’s systems. The breach caused widespread disruption, including $49 million in remediation costs and significant business losses due to operational downtime.
The complaint also accuses Cognizant of mishandling Clorox’s incident response and disaster recovery efforts, further deepening the damage. Clorox asserts that Cognizant’s actions violated their contract and industry standards for cybersecurity.
While Clorox works to recover, Cognizant reported strong financial performance, with $20 billion in revenue for 2024. Clorox is seeking damages for breach of contract, negligence, and misrepresentation.
Digital Commerce 360 has reached out to Clorox and Cognizant for comment.
“It is shocking that a corporation the size of Clorox had such an inept internal cybersecurity system to mitigate this attack,” a Cognizant spokesperson told Digital Commerce 360. “Clorox has tried to blame us for these failures, but the reality is that Clorox hired Cognizant for a narrow scope of help desk services which Cognizant reasonably performed. Cognizant did not manage cybersecurity for Clorox.”
Sign up
Sign up for a complimentary subscription to Digital Commerce 360 B2B News. It covers technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, senior vice president of B2B and Market Research, at [email protected]. Follow him on Twitter @markbrohan. Follow us on LinkedIn, X (formerly Twitter), Facebook and YouTube.
Favorite