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Verizon Demands Better Deal Terms After Yahoo’s Widescale Breach

(Credit: Kena Betancur / Stringer) Yahoo is under renewed scrutiny after its second disclosure of breach within this year. The major hacking incidents the company has been involved in puts a risk on its deal with Verizon. Although Verizon has not confirmed any plans of ditching the purchase, reports indicated that the company is demanding for better deal terms for the acquisition.Verizon Acquires Yahoo For $4.8 Billion
December 17
11:31 AM 2016

Following Yahoo's recent disclosure of a breach that affected one billion users, Verizon is reported to have demanded better deal terms with its planned purchase of the company's internet business.

Verizon agreed to buy the Yahoo's core internet business for $4.8 billion. However, with the report of the incident that was said to have taken place in 2013, Verizon is pushing for a change in the terms of acquisition agreement, taking into consideration the economic damage of the hacks. Reports indicated that Verizon has threatened to bring the matters to court in order to get out of the deal if it is not repriced.

In September, Yahoo admitted to suffering from a hack that occurred in 2014, compromising half-a-billion user accounts. And with the latest disclosure of an even bigger incident of breach, Yahoo is yet again under scrutiny by federal investigators and lawmakers.

The White House said that the Federal Bureau of Investigation was investigating on the breach. Democratic Senator Mark Warner of Virginia also took notice of the "deeply troubling" issue and said he was looking into the cyber security practices of Yahoo.

"This most-recent revelation warrants a separate follow-up and I plan to press the company on why its cyber defenses have been so weak as to have compromised over a billion users," the senator said in a statement.

Verizon was in the middle of reviewing the deal after the first breach disclosure when the latest announcement of another hacking incident was made.

According to a Yahoo spokesperson, the company is still positive in working towards integration with Verizon.

Although the spokesperson expressed confidence in Yahoo's value, its shares dropped more than 6% after the breach was announced earlier this week.

Erik Gordon, a professor at the University of Michigan's Ross School of Business, said that renegotiation in the deal's price would be the simplest yet least likely scenario. He further commented that this is because the date breaches will not be apparent for some time.

He noted that having Yahoo agree to compensate Verizon after the close of the deal would be a more likely concession. He also suggested that the companies may agree to extend the close of the deal until more information about the breach comes in.

Yahoo also received criticism from overseas. The Federal Office for Information Security, Germany's cyber security authority, encouraged German consumers to switch to safer alternatives for email.

"Considering the repeated cases of data theft, users should look more closely at which services they want to use in the future and security should play a part in that decision," BSI President Arne Schoenbohm said in a statement.

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