In today's digital age, privacy and cybersecurity are critical considerations in mergers and acquisitions (M&A) transactions. As Canadian businesses increasingly rely on data and technology, the risks associated with non-compliance with privacy laws have grown exponentially. Among all privacy considerations in a transaction, perhaps none is more consequential than the risk of a data breach. A breach can trigger regulatory notification and public disclosure requirements, fuel class actions, damage reputation, and result in regulatory fines. And it’s not just personal information at stake—among other things, data breaches can also compromise confidential business information, divulge intellectual property and other sensitive data, and even disrupt critical operations.
This article explores the current legal and regulatory landscape and addresses key considerations regarding privacy and data security in the context of M&A, highlighting the importance of due diligence, legal considerations, and best practices for Canadian lawyers and businesses – both pre- and post-closing. The importance of promptly addressing identified risks to ensure compliance and safeguard the business is also considered.