The Cost of Non-compliance – Top Fines, Penalties, and Settlements in Cybersecurity

Studies show 75% of businesses are structuring their budget to reflect an increase in cybersecurity investments. That happens because data breaches and non-compliance could bankrupt you. So, how much does cyberlaw non-compliance cost?

Non-compliance costs almost three times more than compliance. The average data breach costs thousands and millions of dollars without considering fines, which could cost even more than that. Following the law keeps data breaches, lawsuits, and threat actors at bay.

Compliance vs. non-compliance is a tough nut to crack: complying with the law is costly enough, though it pales in comparison to what happens to a company when they become non-compliant. Understanding these two concepts (and their consequences) is a must to run a business.

What’s Non-compliance?

Non-compliance means not following the standards set up by the government. Regulatory agencies often set up rules and regulations all companies must adhere to. Cybersecurity is no different: countries have set different standards for businesses handling customer data.

It’s important to stress that not complying isn’t a good idea. It shouldn’t even be considered. There are no gray areas when it comes to compliance: governments are quick to fine (and sometimes imprison) those who fail to follow the law when handling customer data.

A data breach is catastrophic for customers, so governments make sure companies have to pay ten times more when they refuse to comply with standards that help prevent them.

What’s the Cost of Non-compliance?

Not complying with rules and regulations can easily bankrupt your business. Studies show the cost of non-compliance is close to three times the cost of compliance. To put that in perspective, compliance already costs millions of dollars for large companies.

Non-compliance isn’t an option for most businesses: companies can’t afford to be on the wrong side of the law. Failing to comply will have regulatory agencies hand you fines; threat actors will take advantage of your poor security, resulting in data breaches; and customers will litigate for damages if their information is leaked.

Of course, deciding not to comply with rules and regulations costs more than money.

Non-compliance Consequences

  • Customer Losses. People shy away from doing business with companies that have little regard for cybersecurity, no matter the reason. That should come as no surprise: clients want their information to be safe, especially when one data breach could lead to financial and legal trouble for them (e.g., a credit card leak could have users face thousands of dollars in debt that may or may not go away).
  • Data Breaches. Non-compliance often leads to poor cybersecurity practices. Poor cybersecurity practices lead to data breaches. These breaches cost a lot of money in both fines and lawsuits. Of course, that’s far from the only thing that’ll cost you money: overhauling your IT infrastructure is also expensive.
  • Financial Fines. As you know, being non-compliant with rules and regulations will land you a lot of penalties. These fines are severe and can potentially bankrupt your business if you’re not careful enough. More often than not, being non-compliant plus facing a data breach will bankrupt you – but the money losses won’t stop there.
  • Potential Lawsuits. The first issue on your doorstep after a breach will be the government forcing you to pay multiple fines – but that won’t be the last problem you’ll face. Lawsuits are a regular thing after data leaks. These could go on for years, affecting your business tremendously.

How Much Does a Data Breach Cost?

Fines for data breaches can cost up to a billion dollars. The average data breach costs anywhere between 4 to 10 million dollars. Most small businesses never recover after an incident like that because of lawsuits, fines, and more.

Without considering lawsuits and fines, one data breach means you have to revamp your cybersecurity. That overhaul costs a lot of money – that you may not have because customers tend to walk away from businesses that don’t protect their information.

In other words, a data breach will force you to put money down that you no longer have. For that reason, being compliant is the safest bet.

What’s Cybersecurity Compliance?

Cybersecurity compliance boils down to following the rules and regulations set up by the government. Different agencies and regulatory bodies will release different compliance guidelines companies must follow unless they want trouble with the law.

These rules and regulations don’t exist to trouble companies alone. The government works hard to promote these guidelines, helping companies with their cybersecurity efforts. Sometimes, following these standards costs more money than businesses can afford. Most of the time, it keeps threat actors at bay.

The main goal behind cybersecurity compliance is stopping data breaches or, at least, reducing them as much as possible. Information leaks are catastrophic for citizens and companies alike, so certain standards must be in place to avoid them.

Why Is Compliance Important?

Making sure your company follows compliance rules and regulations helps you two-fold: it keeps the law happy and criminals unhappy.

The law is happy when you comply. In other words, government agencies will not chase you for not following the rules. In contrast, non-compliance leads to lawsuits and fines, putting a big dent in your profit margin. In that scenario, most companies end up bankrupt.

Criminals are unhappy when you comply. In other words, following compliance rules ensures you have strong cybersecurity, making it harder for hackers to penetrate your defenses, steal your money, and leak your clients’ data.

Compliance puts you between the law and criminals. You can favor either side – but favoring the law is the best choice!

Compliance Checklist

  • Creating a Compliance Policy. The first step is to create a policy. Similar to your cybersecurity policy, it’ll be the foundation that your company will rely on for daily work and critical scenarios. However, unlike cybersecurity policy, you’ll need more than security analysts: lawyers and consultants are key players in creating this policy.
  • Doing Compliance Audits. Do you have a compliance policy? Fantastic! That’s far from the only thing you need. That’s right: compliance is ever-changing and always evolving. Threat actors come up with new attacks, governments come up with new regulations, and you have to keep up the pace. For that reason, routine audits are a must.
  • Focusing on Data Protection. What’s the point of cybersecurity compliance laws? To keep citizens safe from harm! The only way to do so is to keep their data away from hackers and threat actors. How can you accomplish that? By investing in data security. You’ll keep everyone (but hackers) happy as long as you keep data breaches at bay.
  • Investing in Hardware. Vulnerabilities and exploits come in many ways and shapes. The best way to avoid any issues is to have the latest hardware on your side. Old servers and devices tend to lose their edge and end up exposed to attacks. For example, old computers can’t run the latest operative systems – and an old OS is full of vulnerabilities that’ll never be patched.
  • Training Employees. Most data breaches don’t happen because of hardware but employees. More than 80% of all breaches happen because of a worker doing something wrong, such as falling for a phishing scam. Regular training drastically reduces the chance of a breach.

Best Way To Stay Compliant

  • Assess Your Compliance. Doing audits is so important we have to mention them twice. Don’t believe compliance is a one-and-done kind of deal. You have to talk to regulators, keep up to date with regulatory trends, and focus on improving how you handle compliance laws. Constant monitoring may be necessary for that to happen.
  • Certify Your Company. Certifications tend to be costly, but they guarantee your business is following compliance rules and regulations. For that reason, making sure you have the latest certs is key in keeping your company afloat. Taking the time to review which ones you need and which ones you already have is a must.
  • Invest in Security. We can’t stress enough how important it is to have a cybersecurity budget you never slash. Software, hardware, and training cost money – but a data breach is always costlier than all three combined. Putting money down to invest in backups and similar measures will also have an amazing return on investment during times of crisis.

How Much Does Compliance Cost?

On average, compliance costs 5 million dollars. Of course, that number varies depending on the size of your company. Small businesses won’t spend millions of dollars for compliance reasons, though they may face bankruptcy if they don’t follow the law.

Compliance isn’t cheap. It costs time and money: you have to set up compliance policies and update them as time goes on. At the same time, complying requires more than knowing and following the law. You’ll also have to invest in software, hardware, and training to do it right.

That’s the reason why compliance costs are so high. More often than not, most of your compliance budget will focus on three critical areas.

The Biggest Costs in Cybersecurity Compliance

1. Employees

Employees can become an issue when it comes to compliance in several ways.

The first one is the danger you may already be facing: untrained employees can create compliance trouble, leading your company to pay millions in fines.

The second one, and often hidden in the eyes of most, is having to hire more people to stay compliant. Compliance laws are complex, and regular audits are a must to ensure you’re doing alright.

For that reason, hiring more people may be necessary to avoid having issues with the law. Demanding more tasks from the same employees could be too time-consuming – and highly inefficient.

2. Time

Compliance will take a fair share of your budget, though that’s far from the only thing it’ll take from your company. Doing audits, making sure everything works properly, and training employees to follow the rules also take a lot of time.

That may seem like a small price to pay. However, being negligent when it comes to compliance can start to cost more time than necessary, forcing your company to lose money due to inefficiency.

How can you save time when dealing with compliance? Using software to better monitor your network and everything compliance-related. Allow technology to help you, so employees can dedicate their time to more important tasks.

3. Software

Software will help you save time – but it will cost money. For that reason, it’s important to shop around and see whether the products you want to purchase will save you money in the long run or become a money-sink.

Here’s the main gist behind a cost-effective compliance toolkit: less is more. Experts believe using the right framework will help you cut costs on compliance – without hindering results.

As long as you’re compiling information and doing regular audits, you’ll hardly have a problem with regulatory agencies. There’s a sweet spot between not spending money and spending your entire budget on software – you have to find it!

Compliance vs. Non-compliance: Which One Costs More?

As you know, compliance is costly – and sometimes, difficult to achieve. Studies show compliance costs 5 million dollars on average. Of course, that number varies depending on how big your company is.

Having to spend that much money on compliance may tempt you to risk it and become non-compliant. If that seems like a good idea, you haven’t heard how much non-compliance costs on average: it costs three times more than complying.

Non-compliance costs 14 million dollars on average. Once again, that depends on the size of your company – and the amount of damage you do by not complying.

The biggest fines in history are nowhere near as low as costing less than 20 million dollars.

Biggest Non-compliance Fines in History

5. T-Mobile

A 2021 data breach that leaked the information of more than 70 million people led to a lawsuit. That class action lawsuit ended in a cybersecurity settlement that made T-Mobile pay more than 350 million dollars.

How did that lawsuit come to be? Several people saw a portion of T-Mobile’s database for sale online. That was enough to raise alarms and take this company to court.

Having poor cybersecurity practices cost T-Mobile more than that huge fine: they also had to invest 150 million dollars in improving their network and data security.

4. Instagram

A little while ago, Instagram failed to protect the information of underaged users. The famous social media site didn’t foresee what would happen when underage users switched their profiles from personal to business accounts.

Most did the switch to get extra features, such as profile visits. Unfortunately, that was far from the only change in their profile: when switching to a business account, certain information automatically becomes public, such as their phone numbers and addresses.

Authorities believe exposing that information without consent is a fatal mistake. In response, they handed a 400 million dollar fine to Instagram.

3. Equifax

One of the biggest credit score companies in the world, Equifax, suffered a data breach that ended with more than 150 million people exposed. What was the reason? Having unpatched software. For that reason, updating every moving part of your system is always a good idea.

What was the result of that breach? This credit company had to settle, paying between 500 to 700 million dollars in fines. Of course, the breach wasn’t the only thing they had to pay for: they also failed to disclose the issue when it first happened.

2. Amazon

There’s more than one way to fail to comply with cybersecurity laws. Most people expect huge fines to come after data breaches – but that’s not the case with Amazon.

Not so long ago, someone discovered Amazon paid a huge fine for failing to comply with the GDPR. The final amount was a little over 870 million dollars. Of course, that leaves us wanting to know the reason.

Unfortunately, the reasons behind that fine haven’t been disclosed yet. Amazon’s PR team said it had nothing to do with data breaches, explaining no user information was leaked. Some believe it had to do with cookie consent.

1. Didi Global

Didi Global failed to comply with Chinese cybersecurity laws and regulations. That led to a year-long investigation that ended with this company admitting to having a lot of issues when it came to compliance.

What was the result? The Chinese government handed Didi Global an astonishing billion-dollar fine for violating multiple laws, including data security and personal information laws. That’s one of the highest fines in recent history.

What do these five fines teach us? We have to be smart about compliance. Following the law is costly – but fines and lawsuits are costlier.


The cost of non-compliance is high – and will continue to rise as time goes on. Governments will focus on changing the law, guaranteeing to have cybersecurity compliance fines that’ll bankrupt those who are not compliant. Compliance is costly and takes time. In contrast, non-compliance is a sure way to close shop and go out of business. U.S. Cybersecurity has compliance specialist standing by to assist and answer any of your questions.

Herman McCargo

Herman is a Microsoft Certified Security Engineer and Cybersecurity Specialist. He’s been in the technology field for over 20 years and has expertise working with the most critical technology infrastructures. He has a deep understanding of cyber risks, threat mitigation and prevention, and overseeing infrastructure.