Comparative Business Ethics and Social Responsibility



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The report discusses the data breach incident of Equifax and an overview of the ethical problem in the Company. The ethical issue of virtual security in which the Company was not able to secure its customers’ data leads to an identity threat for them. Equifax had shown a lower level of decision-making ability by delaying to convey the incident to the public. The report analysis that ethical issue in a detailed manner with the relevant theories like Egoism and Utilitarianism. The report also represents a short recommendation part with significant points. Lastly, a brief conclusion has been provided.





Equifax is a multinational consumer credit writing mean and one of America’s three biggest consumer credit companies. The Company gathers and aggregates details of 800 million each consumer and more than 88 million industry internationally. Additionally to businesses’ demographic records and credit and services, Equifax sells credit checking and fraud deterrence service straight to the consumer. The headquarter of Equifax is located in Atlanta, Georgia, and it operates in almost 24 countries worldwide. A company with such a massive level of evidence and responsibility of the United States residents makes it a greater target for the hackers aiming to snip private details. The risk of the individual details coming into the wrong hand is extremely dangerous because people can lose their identity and existence. The case of the Equifax data breach happened to discharge the evidence of 147.9 million people of America to hackers take advantage. The crucial details like personal details, social security numbers, and credit cards are also put at risk.  The purpose of the report is to examine concepts and theories.

The data breach occurred in Equifax in June 2017, but the Company did not release the open statement until 7th September 2017. Around 148 million peoples’ personal data were compromised, and 209,000 credit card numbers were also taken by hackers. The data stolen from Equifax has a credit history of persons with their addresses, account numbers, and other personal identity details. The report first discusses the case issue and ethical challenges or problems of Equifax. The report analysis the organizational ethical problems with various theories and concepts.


When big companies like Equifax have data breach ethical issues, it becomes tough for the customers to trust any companies that manage the customers’ personal data. It is true to the firms that deal with details of the people that are stolen can produce permanent destruction to the customers. For instance, in many banking and finance companies, deals with customer’s credit and money details are an acute feature of the economic advantage of a person.

In the case of Equifax, it believes that hackers gained access to its data by a susceptibility in Apache Struts. The hackers got access to the data of Equifax from 13th May over 30th July. The officials got to know about the hack on 29th July 2017 prior to the month before that it allows the customers to know (PRIMOFF and KESS, 2017, p14-16). Equifax confronted the hacking owing to the errors in the security system of the Company. In March 2017, the Company faced a distinct breach. On that occasion, the Company informed a few customers of banking and got a security company to help in the investigation of the breach. Though, the incident was not made publicly. In December 2016, a researcher of security inspected the server of Equifax. Tt warned the Company that its system was exposed to any type of hack, which happened in 2017. Equifax ultimately repaired the exposed issue, but after mid-2017, the major beach took place. Equifax process to confirm the customer details was negotiated. After the detection of the hack on 29th July, it was still two weeks after the team of the Company with 225 experts of cybersecurity can report the CEO for the hacking incident. It was extra two days prior Equifax was sure that customer details were compromised (DINGER and WADE, 2019, p7-9). After five days, the board of Equifax was also notified. Thus, it took around two weeks to publicly expose the issue of a hack.

After the announcement of the data breach incident in September 2017, reporters found that four main executive directors of Equifax sold their parts of stocks. Equifax directed its own inquiry and found that those executives did not know about the ethical incident of the data breach. Following the announcement of the ethical issue, Equifax focused customers on a website in which they can see if their details had been exposed. The Consumer Financial Protection Bureau released an inquiry into the incident for its consumers. Equifax did not see the data break as the device used to observe the network circulation had been sluggish for 19 months due to a terminated security permit. Almost two months were taken by Equifax to update the terminated permit, in which time the staff noticed a wary web issue. The House oversight Board reported that Equifax’s security practices and policies were old and outdated and troubling with basic security actions. The report of the House confirms that the credit company Equifax failed to patch a revealed susceptibility in the Apache Struts, which is a publicly exposed web server. The attackers had used exposure to crack the web and hack the details of the customers (SKINNER, 2019, p241). The hackers had sent around 9,000 inquiries on the records, download data 265 separate times.

Equifax had an ethical duty for its consumers to maintain their personal records with the greatest security. However, the software tools of Equifax were accessed by the hackers by an exposer of Apache Struts. The Equifax Company deficient in internal control were more vulnerable to ethical issues.


The major ethical issue related with the facts breach events in a company like Equifax is breaking the news to affected people by the breach. Equifax made an unethical choice to negate the security blotch that ultimately led to the revelation of huge public data. The action of the executive team of Equifax shows a major absence of consideration for the customers, and the decision made by Equifax frequently recommends that it failed to consider societal welfare. The major ethical theories which can be used in such circumstances are Utilitarianism and Egoism. Egoism theory is the normative ethical place that moral means should act in their own self-interest. Ethical Egoism does not need a moral ground to damage the interest and prosperity of others when making discussion (GOMARASCA, 2017, p 64-80). The ethical theory of Egoism means the notion that behavior is correct founded on its values for the individual concern. The Company not discharging details of the breach data to the public instantly might be a short-term business interest of Equifax or its management, but ultimately the news shall be spread (JUMA’H and ALNSOUR, 2020, p279). The Company is better off to spread the breach details instantly in the time they knew. Equifax was cooperatively struggling for its pleasure in an attempt to reserve its time, resources, and energy by neglecting the issue of vulnerability.

Utilitarianism theory:

The Utilitarianism theory of morality supports actions that stand in pleasure and happiness and opposes action, leading to harm and unhappiness. The decision-making, according to Utilitarianism, should be done based on the majority benefit. Utilitarianism is the notion that moral precision must be based on having the utmost good for the maximum likely amount of people. To admit to the customers and public about the incident of a data breach is essential, but it can push to undesirable press and harm the reputation of the Company (VALENTINOV, 2017, p36-40). The best method to repair that reputation is to quickly use a way for customers to find out if their details have been retrieved, and the next step can be to take the initiative to secure their data. Application of these data quickly and correctly is the best method to convey to customers that the Company is working hard to have a high possible result for each one involved in the incident.

Equifax was swift to release a website permitting the public to check if they have been affected by the data breach and offer a free year of credit checking with the incident. It has been clear from the quick action of Equifax that Equifax has few setups put in the incident of the data breach. It is majorly significant for the Company to have their better reputation. The bad reputation of the Company could impact each of its stakeholders (ANDERS, 2017, p72). It contains consumers, stakeholders, workers, and the management. A diminished reputation can radically reduce the stock value of the Company leading these stockholders to lose money. The customer does not want to do business with the less reputational Company. It reduces the pay scale of the employees, which leads its discontent with the workers. All of it makes it horrendous for the management of the Company to work. It is not that all of these horrendous things are not manageable, but it can make some alteration in leadership as the older leader retire or resign during the bad press coverage. The case of Equifax is not so different. Soon after the two weeks of the data breach, the chief information officer, Security Officer, and Executive officer all were retired from their positions. Different executives of Equifax have been inspected to see if they contributed to the selling of stakes prior to details about the hack has been made open.

Principle of utility:

The Utilitarianism theory states that the right decisions are the decision that produces the maximum number of contentment for the greater number of individual. In the ethics of Utilitarianism, the principle of utility is sufficient for any activities for both individual and collective. Equifax required considering the actions that lead to huge happiness for a huge number. In the breach incident, Equifax failed to consider the amount of Americans that can possibly be exposed to a breach owing to its decision and, in its place, chooses to reserve its well-being. Equifax was totally careless with respect to both duration and intensity when ignoring the issue of software in its system (HOLLANDER, 2016, p557-568). One of the major elements when making an ethical decision in regards to utilitarian ethics is the amount of pleasure produced by the decision. The pain or pleasure shall be bigger as per the least partly to its intensity. The pleasure intensity together enjoys by not increasing the resources, time, and money on repairing Apache Bug was annulled relative to the range of the pain sensed by victims of the breach of data. The range of the pleasure enjoyed by Equifax was not visible. It was usually irritation that Equifax did not question itself. Conversely, the range of known theft or the terror of possible identity theft is a vigorous concern suffered by many customers (PERETORE et al., 2017, p 4-8). Equifax failed to consider the range of its decision as an indication of obvious and clear damage to utilitarian ethics.

Significance of time and intensity:

Equifax was also carless to consider the time of its decision to neglect the Apache Struts susceptibility. The duration of pain or pleasure practiced by society as the total is a vital element while making ethical decisions in regards to utilitarian ethics. For the Company Equifax, overhauling the system of vulnerability bugs might take around three or five years (TAN and SUDIRMAN, 2020, p135-137). Equally, the young victims are subjected to a relentless fear of identity theft which can last for lifelong. In the worst scenario, it can produce a potential risk of decades, and in the best-case scenario, it can last for a year or less. Ultimately, the decision of Equifax failed to consider the time rage of the pain and pleasure, and openly showing is the ethical issue in the decision making with regards to utilitarian ethics.

Principle of Freedom:

The freedom principle states that Equifax as totality was usually simple, attempting for its own pleasure to preserve its time, energy, and resources by neglecting to remove the vulnerability. It also states that every person is allowed to attempt for own pleasure, given that it does not affect the pleasure of others. The former CEO of Equifax, Richard Smith, states that Equifax would start from 1ts January 2018 permitting consumers to unlock or lock their credit records whenever they want. At the time of the incident, Equifax was not working as per the freedom principle, but instead, customers were forbidden from endeavoring for their own pleasure by the protection of its details, indirect destruction of freedom principle (LIANG, 2017, p432-437).


The incident of a data breach with occurred in Equifax was a severe one. In response to that, the major ethical issue was the decision-making of the Company after the occurrence of the incident. The Company was not able to keep the data of the customers effectively. The Company failed to inform its customers on time and handle the situation. The incident major occurred due to the use of outdated software technology. Some of the recommendation outlined summering the major points are as follows:

  • The House committee reported that the security practices of Equifax are old, and there was a doubt on the vulnerability of the system. However, Equifax did not concern about having the total solution to the issue. Thus, Equifax must advance its technology to keep huge public data more securely and efficiently. The use of modern software with major security benefits can enhance the security level of the Equifax data.
  • Equifax’s ethical failure shows that the US’s regulatory system was not adequate as it relates to the credit reporting industry. For preventing breaches of that sort, Congress should take an effective measure to make legislation (TORRE, DUMAY and REA, 2018, p475-477).
  • Equifax did not report to the public on time. The correct decision is the decision that makes a massive amount of happiness for a vast number of people (PELEGRÍN-BORONDO, 2020, p 9-14). Thus, Equifax should focus on the customers and their security.
  • Equifax should be well versed in analyzing the intensity and range of any incident occurring in the Company. It helps to build trust with its customers.
  • For Equifax, its customer security is the primary aim of the Company to fulfill. Thus, negligence should not be done for the security of the customer.




Ethical decision-making is a discipline. It is a method to recognize and solving issues in the business context. Equifax is responsible for a data breach, which it suffered in 2017 that made the vast customers of the Company vulnerable to identity theft or fraud. After examination of the breach incident and ethical problem, the egoism theory and primarily utilitarian theory can be applied. It can be seen that Equifax failed to make the decision that can benefit their vast number of customers. Thus, the theory of Utilitarianism performs a significant role in the whole process of a data breach with the virtual ethical issue of decision making and working. However, Equifax is regularly responsible for its violation, it is usually examined as virtual ethics, but the problem has been analyzed using utilitarian ethics that there are adequate facts to assist that incident. The breach of Equifax was an unattained matter which outcome in a notice. However, the unattained vulnerability in its system can be mitigated by vigorous devices and technologies. The problem of Equifax could have been avoided if the Company had effectively considered the issue security properly. Hence, it can be said that it is crucial for the Company to stick to transparency and emphasize its moral and social duties over the economic advantage of the Company.




ANDERS, SB, 2017. Practical Data Security Resources: Certified Public Accountant. The CPA Journal, 87(11), pp. 72-73.

DINGER, M. and WADE, J.T., 2019. The Strategic Problem of Information Security and Data Breaches. The Coastal Business Journal, 17(1), pp. 1-25.

GOMARASCA, P., 2017. FITTING ATTITUDE THEORY IN ECONOMICS: MENGER AND KEYNES. Quarterly Journal of Austrian Economics, 20(1), pp. 61-83.

HOLLANDER, S., 2016. Ethical Utilitarianism and The Theory of Moral Sentiments: Adam Smith in Relation to Hume and Bentham. Eastern Economic Journal, 42(4), pp. 557-580.

JUMA’H, A.,H. and ALNSOUR, Y., 2020. The effect of data breaches on company performance. International Journal of Accounting and Information Management, 28(2), pp. 275-301.

LIANG, C., 2017. Optimal inequality behind the veil of ignorance. Theory and decision, 83(3), pp. 431-455.

PELEGRÍN-BORONDO, J., ARIAS-OLIVA, M., MURATA, K. and SOUTO-ROMERO, M., 2020. Does Ethical Judgment Determine the Decision to Become a Cyborg?: JBE. Journal of Business Ethics, 161(1), pp. 5-17.

PERETORE, F., HORNBY, R.L., SCHAAP, M.A. and GLADIS, B.M., 2017. Cybersecurity: The Increasing Obligations and Exposure in the Age of State Regulation. The Journal of Equipment Lease Financing (Online), 35(3), pp. 1-10.

PRIMOFF, W. and KESS, S., 2017. The Equifax Data Breach: What CPAs and Firms Need to Know Now: Certified Public Accountant. The CPA Journal, 87(12), pp. 14-17.

SKINNER, C.P., 2019. Bank Disclosures of Cyber Exposure. Iowa Law Review, 105(1), pp. 239-281.

TAN, D. and SUDIRMAN, L., 2020. Final Income Tax: A Classic Contemporary Concept to Increase Voluntary Tax Compliance among Legal Professions in Indonesia. Journal of Indonesian Legal Studies, 5(1), pp. 125-170.

TORRE, M.L., DUMAY, J. and REA, M.A., 2018. Breaching intellectual capital: critical reflections on Big Data security. Meditari Accountancy Research, 26(3), pp. 463-482.

VALENTINOV, V., 2017. The Rawlsian Critique of Utilitarianism: A Luhmannian Interpretation: JBE. Journal of Business Ethics, 142(1), pp. 25-35.


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