Hwang, Jung Joo | CSR-2

March 26, 2012

Is Merck’s corporate social responsibility
good for the global health?

Jung Joo Hwang
March 26, 2012j4hwang@ucsd.edu
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March 26, 2012

Is Merck’s corporate social responsibility good for the global health?
-For the right reasons, not for public relations and market expansion
motive?
1. Background
Cooperate Social Responsibility (CSR) has been one of the leading topics atrecent World Economic Forum (WEF) meetings. In contrast to Milton Friedman’s viewof limiting CSR to increase its profits1, a report from the WEF observes that the three key
pressures- corporate competitiveness, corporate governance, and corporate citizenshipand the linkages between them will play a crucial role in shaping the agenda for businessleaders in the coming decade. 2 It elaborates on corporate citizenship, such as “in theface of high levels of insecurity and poverty, the backlash against globalization andmistrust of big business, there is growing pressure on business leaders and theircompanies to deliver wider societal values.”2
In parallel with the increasing calls for business to assume wider responsibilities
in the social arena and claims, pharmaceutical companies are increasingly turning to CSR
to repair its damaged reputation and boost the bottom line. The public perception that
drug companies profit grossly and often unethically from matters of life and death has led
to public mistrust. Reports of pharmaceutical companies’ frauds or settlements in legal
cases aggravate matters further.3 In an increasingly competitive marketplace withdwindling new drug product pipelines and soaring generic penetration, public relations
setbacks potentially have enormous repercussions on the bottom line. Therefore, thebenefits for outreaching CSR practices can be manifolds, although effective CSR
programs will not be a cheap practice for companies. Embracing CSR can redeem theindustry’s reputation with the general public4, since there is strong external pressure on
pharmaceutical companies to help combat global health problems. Therefore, access to
medicines initiatives has long been the focal point of pharma’s CSR strategy not only toretain brand reputation, but also to develop access in developing markets.

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Merck & Co., Inc., established in 1891, is currently one of the world’s sevenlargest pharmaceutical companies by market capitalization and revenue with operation in
more than 140 countries.5 It is of interest to notice George Merck’s (son of the Merck’s
founder) words in a speech at the Medical College of Virginia in 1950: “We try never toforget that medicine is for the people. It is not for the profits. The profits follow, and if
we have remembered that, they have never failed to appear. The better we haveremembered that, the larger they have been.”6 Apparently, the Merck’s senior leader had
recognized a responsibility not just to its shareholders, but also to the wider society
audience around the world. One of the best illustrations of Merck’s CSRs came during
World War II, when Merck made streptomycin, a powerful antibiotic to treat tuberculosis
and varieties of infectious disease, freely available to patients.7 Merck has also been
conducting many CSR programs for its employees and communities. Recently Merck is
actively initiating many CSR programs for global health initiatives, such as Mectizan
Donation Program (MDP), UN/Industry Accelerating Access Initiative, African
Comprehensive HIV/AIDS Partnership (ACHAP), Global Alliance for Vaccination and
Immunization (GAVI), etc.8
This paper attempts to analyze the Merck’s CSR programs focusing on the MDP
which is the most well-known CSR example from pharmaceutical companies. Merck’s
vision and philanthropy strategy, costs and outcome for the MDP program will beanalyzed. Then, main challenging issues for Merck’s CSR programs, such as monitoringand evaluation as well as transparency and accountability of the company’s businesspractice on CSR programs, will be examined followed by some recommendations.

2. Merck’s vision and corporate philanthropy strategy
Merck’s missions are to be fully responsible for 1) profitable economy, 2) abiding
the laws of society, 3) ethicality to do what is right, just, and fair, and 4) philanthropy tocontribute to various kinds of social, educational, recreational, or cultural purposes.9 In
response to global social activism10, Merck has adopted various voluntary regulatory
standards to protect its reputation and brand.11 Among these regulations, Merck3

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March 26, 2012emphasizes a code of conduct, aligning with ethical and philanthropic responsibilities,
which includes their five core values: 1) business for preserving and improving human
life, 2) the highest standards of ethics and integrity, 3) the highest level of scientificexcellence to improving human and animal health, 4) profits, but only from work thatsatisfies customer needs and benefits humanity, and 5) to most competitively meetsociety's and customers' needs. 12 In addition, Merck institutionalized its commitment to
CSR in 1957 by creating the not-for-profit Merck Company Foundation to fund most of
its charitable activities.13 It is said that, since its inception, the Merck Company
Foundation has contributed more than $560 million to support important initiatives that
address societal needs and are consistent with Merck's overall mission to enhance thehealth and well-being of people around the world.14 Merck’s annual charitable spendingcomes predominantly (over 80%) from the Foundation’s endowments, supplemented withcash contributions from Merck operating funds.15
Although Merck undertook a wide range of philanthropy work on the national
level, the majority of its initial contributions programs were diffused and unfocusedrather than being tied to well thought-out social or company goals.16 The major growthin Merck’s charitable spending and donations can be traced to a shift in the Foundation’s
strategy in the mid-1990s with changes from education in the U.S. to global initiatives,
from many little projects to few larger ones, and towards evaluating the impact ofcharitable programs.17 In doing so, Merck’s philanthropy priorities are now aligned with
their business capabilities and mission, particularly for improving/expanding global
access to healthcare, promoting/integrating environmental sustainability, and contributing
to local communities where Merck has major facilities. In 2006 alone, Merck's
philanthropic contributions totaled $826 million (see Figure 1 in Appendix).18
Besides the Merck Company Foundation, Merck has invested to create inside
governances for CSR. This CSR framework and commitment to annually review its
progress towards the goals and objectives of the framework are expensive processes.
Without Merck’s understanding that CSR is an effective business organizing strategy forincreasing the financial bottom line while simultaneously building civil society, theinvestment and commitment to its CSR would be not possible. Nowadays there are theFoundation’s Oversight Committee, Office of Corporate Responsibility, Public Policy4

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March 26, 2012

and Responsibility Council, Corporate Responsibility Report Working Group, Executive
Committee, Board Committee on Public Policy and CSR, and Ethics Office to oversee
and ensure its CSR programs.19 Merck’s 40 pages of Code of Conduct are translated in
27 languages with comprehensive internal and external ethics training, and awarenessprograms are thorough.12 Additionally Merck Group International has signed the United
Nations Global Compact on international standards for CSR.20 In respond to its growing
portfolio of global health initiatives, the Merck Company Foundation has been
established in four ethics centers around the world (UAE in 1998, South Africa in 2000,
Columbia in 2001, Turkey in 2003), while engaging a partnership with the W.DC-based
Ethics Resouce Center (ERC).21 Furthermore, Merck also explores ways to recruit otherdrug companies in providing affordable drugs to developing countries while sustaining
their research and development programs.

3. Analysis on Merck’s CSR programs focused on the MDP
Onchocerciasis, more commonly known as “river blindness” is transmitted
through the bite of black flies and can cause intense itching, disfiguring dermatitis, eyelesions, and over time blindness and premature death. More than 100 million people areat risk of infection, and it is estimated that 18 million are currently infected. Mectizan isa broad-spectrum anti-parasitic medicine which rapidly kills microfilaria. However,since it does not kill the adult worms, infected individuals need annual single oral dose of
Mectizan for the 10-15 year which is a life span of the adult worms. In 1987, Merckbegan a program to donate its new drug Mectizan to “all that need it for as long as
needed.”22
The MDP is a multi-sectoral private-public-partnership involving the World
Health Organization (WHO), the World Bank and the UNICEF, as well as ministries ofhealth, non-governmental development organizations and local communities to provide
medical, technical and administrative oversight of the donation of Mectizan22,24 (seeFigure 2 in Appendix). Cross functional management teams, such as the Mectizan Expert
Committee, the Mectizan Donation Program Secretariat at the Task Force for Child5

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March 26, 2012

Survival & Development, and Office of Contributions, participate in design, oversight,
evaluation, and reporting. Applying organizations and ministries must demonstrate theability to distribute Mectizan safely and effectively to endemic areas for at least five
years, with appropriate systems established for storage and handling of drugs,
surveillance, management and reporting of adverse drug reactions, recordkeeping andreporting of treatments administered on an annual basis.22
Since the program's inception, Merck has donated more than 2 billion tablets ofMectizan, with more than 600 million treatments approved since 1988. In December of
2007, Merck announced a donation of $25 million over eight years as part of an initiativewith the World Bank to raise approximately $50 million to help eliminate river blindness
in Africa. The World Bank has raised the remaining $25 million, providing all thefunding necessary for 28 African countries affected by river blindness to develop selfsustaining Mectizan distribution programs by 2015. The program currently reaches
approximately 80 million people in 30 African, six Latin American countries, and the
Middle East (Yemen) each year.25 Today, the delivery system for Mectizan also
provides a mechanism to support other health and social services, such as treatment forthe prevention of lymphatic filariasis, vitamin A distribution, cataract diagnosis,
immunization campaigns, training programs for community health workers and censustaking.
Merck's involvement is considered a key factor in the success against the river
blindness disease all over the world. Cost-effectiveness and cost-benefit analysis studies
for the MDP by WHO and the World Bank indicated that the program indeed thrives for
public benefits, with decreased incidence of river blindness patients in the developing
countries (see Table 1 in Appendix). The results were also verified by prestigious
research groups such as Johns Hopkins-Bloomberg School of Public Health.26

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4. Main issues and recommendations
Margolis and Walsh have examined nearly 100 studies of the relationshipbetween CSR performance and corporate financial performance (CFP) over the last 30
years.27 Most studies point to a positive relationship between CSR performance and
CFP. Of the 80 studies that examined whether CSR performance predicts CFP, 42 founda positive relationship, 19 found no relationship, 15 studies reported mixed results, andonly four studies found a negative relationship. Recently, the debate about CSR has
shifted, that it is no longer about whether to make substantial commitments to CSR, but
how.28 Major identified issues from the current analysis are monitoring/evaluation of
CSR programs and transparency/accountability of the company’s business practices.

•

Monitoring/evaluation on CSR programs
Although evaluation for its CSR program like the MDP indicated that the program

indeed thrives for public benefits, Merck began to re-evaluate how to measure its
corporate responsibility efforts since 2010.29 Merck had categorized the existingmeasurements according to the priority areas of its new framework: Access to Health,Environmental Sustainability, Employees, and Ethics and Transparency. Then, the list of
36 key performance indicators (KPIs)19 has applied globally to cover and serve all thebusiness units with the exception of joint ventures as a baseline measurement for the CSR
activities. Merck is reporting on this complete list of measurements in its CSR reportfrom year of 2011.30 Still, current sets of key performance indicators at Merck are very
complex (see Table 2 in Appendix). Consequently, it will be difficult to convey its CSR
performance internally as well as externally. Therefore, Merck needs to work on
simplified version for better communicating with publics and stakeholders, while keeping
current matrix for actual evaluation, if necessary. Clearer and better communication withoutside evaluators, especially a third party, will be a win-win strategy certification. For
example, Merck in recent years has won numerous recognitions such as award for theenvironmental protection efforts and top on the list of “1000 Most Sustainable
Companies”31,32 meeting the criteria for inclusion area ranked according to financial,environmental, social, and corporate governance key performance indicators. And
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March 26, 2012financial management companies screening their portfolios against nonfinancial criteriasuch as CSR or the ethical investing community enlist Merck belongs on their portfolio
like the Calvert Large Cap Value Fund Engagement companies.33•

Transparency/accountability of the company’s business practices
Even though Merck’s intension and success of the MDP is publicly praised,certain business practices by Merck are not free from public criticism. Few recent cases
are Vioxx case, payment of reprinted articles which are favorable to Merck on phony
medical journal, and Medicaid overbilling filed by whistleblowers, which Merck agreed
to pay more than $650 million without an admission of liability or wrongdoing.34 For
instance, in 1999, the U.S. Food and Drug Administration (FDA) approved Vioxx fortreating arthritis, which became one of the most prescribed drugs in history. However,further studies by Merck and by others found an increased risk of heart attack associatedwith Vioxx. Then Merck adjusted the labeling of Vioxx to reflect possible cardiovascularrisks in 2002 and notified the FDA that it was voluntarily withdrawing Vioxx from themarket. The FDA has since recommended that Vioxx be put back on the market, butwith a more prominent warning regarding cardiovascular risks on its label. Still, lawsuitsby about 50,000 people who used Vioxx were followed, which ultimately have cost
Merck $58 million settlement.35 However, in 2004 the prestigious medical journal theLancet published that “the unacceptable cardiovascular risks of Vioxx were evident as
early as 2000...”36 and criticized Merck for having kept the drug on the market as long as
it did before withdrawing it.
It is apparent that violation on CSR practices is very costly, not greenwashing.37
Therefore, Merck should increase visibility for the right and wrongs of business up front
using technology, oversight bodies, and third-party reporting system. Shareholder
engagement, which Merck has initiated from 2010 with limited presence, to exchange
information, views and recommendations, and share activities and progress against key
goals should be encouraged more actively by the form of one-on-one meetings, expert
input forums or roundtable discussions, industry coalitions or formal partnerships.
Greater transparency on the Merck website about information on policy, lobbying costs,8

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March 26, 2012

trade associations and other tax-deductions for its donation will guide and ensure Merck’s
sounding and responsible business practices.

5. Conclusion

There are many foreseeable reasons why Merck wants to integrate CSR into its
business. Besides improving brand reputation around the world and attracting andretaining employees and investors, there are important financial benefits in meeting thehigher social and environmental standards and in differential marketing for the
products.38 As Merck’s affirmative corporate social agenda moves from mitigating harm
to reinforcing strategic philanthropy tied with a social issue36 for global health initiatives,
the greater benefit both for the public and the firm has been achieved. Since 1987, the
MDP has approved more than 530 million treatments of Mectizan for river blindness. In
retrospect, Merck CEO’s decision more than two decade ago, “a Mectizan’s open-ended
donation” is responsible for an unparalleled success story of CSR by a pharmaceuticalcompany, after Merck pursued unsuccessfully both commercial sales at market prices andthird-party payers at either market or discounted prices. 24 Nowadays, throughcommercial activities and CSR programs, Merck is creating innovative business solutions
that are able to reach both of those markets in different ways while delivering widesocietal value such as providing medicine access to poor developing countries.
Regardless of whether the purpose behind Merck’s motivation for CSR programs is toboost to its corporate image and brand identity, to mitigate effects of disaster like theVioxx incident, or to use as a powerful recruitment tool, we need to foster privatecompanies’ CSR activities and encourage its CSR-related processes with betteraccountability and transparency across the company. When company’s CSR strategies
are aligned with its business strategies, private corporations will be able to generatecommercial business and investor interest while providing goods for the global health.
Excellent example of corporate citizenship can stimulate other companies to emulate the
CSR activities. By adopting autonomous governance structures and increasing
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March 26, 2012transparency by external verification, firm’s CSR efforts would be more credible to its
target stakeholders including publics.

6. Reference
1. Friedman, M. (1970). The Social responsibility of Business is to Increase its Profits.
NY Times, September 13.
2. World Economic Forum. (2002). Global Corporate Citizenship: The Leadership
Challenge for CEOs and Boards, www.weforum.org/corporatecitizenship. (accessed
March 3, 2012).
3. Silverman, E. (2011). Pharma Fraud Continues To Fill The US Treasury.
http://www.pharmalot.com/2011/12/pharma-fraud-continues-to-fill-the-us-treasury/.
(accessed March 3, 2012).
4. Tolve A. (2011). Pharma and CSR: Why good deeds are good business.
Eyeforpharma. http://social.eyeforpharma.com/marketing/pharma-and-csr-why-gooddeeds-are-good-business. (accessed March 10, 2012).
5. Merck. Our history. http://www.merck.com/about/our-history/home.html. (accessed
March 10, 2012).
6. Madhavan, K. S. (2009). The secret of success of great visionary companies.
http://en.articlesgratuits.com/the-secret-of-success-of-great-visionary-companiesid4126.php. (accessed March 3, 2012).
7. Ryan, F. (1992). Tuberculosis: the greatest story never told : the human story of thesearch for the cure for tuberculosis and the new global threat. FPR-Books Ltd.
8. Caines, K., Buse, K., et. al. (2004). Assessing the Impact of Global HealthPartnerships. pp. 1-45.
9. Merck. Views and positions. http://www.merck.com/about/views-andpositions/home.html. (accessed March 10, 2012).
10. Vogel, D. (2008). Private Global Business Regulation. Annual Review of Political
Science 11, pp. 261–82.

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11. Merck. Our value. http://www.merck.com/about/our-values/home.html. (accessed
March 10, 2012).
12. Merck/MSD. Code of Conduct: Our values and standards: the basis of our success.
http://www.merck.com/about/code_of_conduct.pdf. pp. 1-40. (accessed March 10,2012).
13. Merck. Foundation. http://www.merckresponsibility.com/giving-atmerck/foundation/home.html. (accessed March 2, 2012).
14. CSRwire. (2010). The Merck Company Foundation Announces Over $800,000 in
Grants to New Jersey Groups. http://www.csrwire.com/press_releases/28485-TheMerck-Company-Foundation-Announces-Over-800-000-in-Grants-to-New-JerseyGroups-. (accessed March 10, 2012).
15. Chadwick, R. F. (1992). The concise encyclopedia of the ethics of new technologies.
Academic Press.
16. Porter, M., Kramer, M. (2002). The Competitive Advantage of Corporate
Philanthropy. Harvard business Review, pp. 57-68.
17. Merck. Committed to Leading the Future of Healthcare.
www.merck.com/about/philanthropy/9.htm. (accessed February 22, 2012).
18. The Global Pharmaceutical Industry. (2007). Social and Environmental Factors: The
Growing Emergence of Global Standards.
http://www.duke.edu/web/soc142/team2/social.html. (accessed March 10, 2012).
19. Merck. Governance. http://www.merckresponsibility.com/corporateresponsibility/governance/home.html. (accessed March 2, 2012)
20. United Nations Global Compact. Participants & Stakeholders.
http://www.unglobalcompact.org/participant/6523-Merck-Co-Inc-. (accessed March 10, 2012).

21. Ethics Resource Center. ERC Fellows Member Firms.
http://www.ethics.org/page/erc-fellows-member-firms. (accessed March 10, 2012).
22. FACT Sheet – Merck Mectizan® Donation Program – River Blindness(Onchocerciasis). MCT-2007-PA-003-BK.
http://www.merckresponsibility.com/priorities-and-performance/access-tohealth/community-investment/public-and-private-partnerships/mectizan-donationprogram/home.html. (accessed March 1, 2012).
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23. UNICEF. Merck supports the worldwide fight against river blindness.
http://www.unicefusa.org/news/news-from-the-field/merck-pia.html. (accessed
February 22, 2012).
24. Peters, D. H., Phillips, T. (2004). Mectizan Donation Program: evaluation of apublic–private Partnership. Tropical Medicine and International Health 9:4, pp. a4–
a15.
25. CoyneI, P.E., Berk, D. W. (2002?). The Mectizan (Ivermectin) donation program forriver blindness as a program for pharmaceutical industry donation programs. World
Bank. pp. 1-28.
26. Waters, H. R., Rehwinkel, J. A., and Burnham, G. (2004). Economic evaluation of
Mectizan distribution, Tropical Medicine and International Health 9:4, pp. a16–a25.
27. Margolis, J. D., Walsh, J. P. (2001). People and Profits. Mahwah, N.J.: Lawrence
Erlbaum.
28. Smith, N.C. (2003). Corporate Social Responsibility: not whether, but how? Centre
for Marketing Working Paper No. 03-701. London Business School.
http://www.london.edu/marketing (accessed March 10, 2012).
29. Personal communication with James Class (Director, Global Public Policy at Merck).
30. Merck. (2011). Responsibility: Corporate Responsibility Report 2011.
http://www.merck.de/company.merck.de/en/images/Merck_CR_Report_2011_EN_tc
m1612_72028.pdf. (accessed March 2, 2012).
31. Kropp, R. (2010). Merck Tops List of 1K Most Sustainable Companies.
http://www.greenbiz.com/news/2010/09/17/merck-tops-list-1k-most-sustainablecompanies. (accessed March 2, 2012).
32. Staton , F. (2011). Merck, Novartis top drug-approval rankings FiercePharma. http://www.fiercepharma.com/story/merck-novartis-top-drugapproval-rankings/2011-08-03#ixzz1oSo1lhSa. (accessed March 10, 2012).
33. Calvert .Calvert Large Cap Value Fund Engagement companies (as of 6/30/2011).
http://www.calvert.com/nrc/literature/documents/tl10067.pdf?litID=TL10067.
(accessed March 2, 2012).
34. Wikipedia. Merck & Co.: Recent Case Histories.
http://en.wikipedia.org/wiki/Merck_%26_Co. (accessed February 22, 2012).
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35. Brenson, A. (2008). Courts Reject Two Major Vioxx Verdicts. The New York Times.
http://www.nytimes.com/2008/05/30/business/30drug.html?_r=2&partner=rssnyt&e
mc=rss&oref=slogin. (accessed March 10, 2012).
36. Horton, R. (2004). Vioxx, the implosion of Merck, and aftershocks at the FDA. The
Lancet, 364:9450, pp. 1995-96.
37. Conroy, M. E. (2007). Branded. New Society Publishers.
38. Porter, M., Kramer, M. (2006). Strategy and Society: the Link between Competitive
Advantage and Corporate Social Responsibility. Harvard Business Review, pp 78-92.

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Appendix

Figure 1. Merck Contributions and Donations.18

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reporting adverse
experiences

Figure 2. Mectizan Donation Program and Partnerships(Adapted from Peters and Phillips24).

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Table 1. Economic Cost, Cost-Benefit, Cost-Effectiveness Analyses on Merck’s
MDP.24-26

Economic

Permanent workers at the coffee plantation without onchocercal skincost

disease (OSD) earned, on average, 29.7 Birr ($5.32 = 5.2% of per-capitaGDP) more per month than workers with disease

Cost-benefit- Net Present Value (NPV) including both land and labor benefits: $3.7B

analysisover a 39 year program life and using a 3% discount rate or $485M using
a 10% discount rate.
- NPV of $15.5 million and ERR of 6% at a 10% discount rate for the
1996–2009 project horizon, while for the 1996–2017 project horizon the
NPV was $53.7 million and the ERR was 17%.
- NPV using a 3% societal discount rate to be $307 million, for an ERR
of 24%, and a corresponding NPV of $87.6 million with a
10% discount rate

Cost-

Persons with OSD spend an additional $8.10 over a 6-month period in

effectivenesscomparison with their non-OSD counterparts, and to spend an additional

analysis6.75 h seeking health care over the same 6-month period.
Average per-capita annual health expenditures in Nigeria, Sudan andEthiopia are $23, $48 and $25, respectively

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Table 2. Key Performance Indicators (KPIs) at Merck.19

Research & Development
Research & Development
Percentage of top 20 global burdens of illness addressed by our products andpipeline (as defined by WHO and excluding accidents, premature birth andself-inflicted injuries)
Number of GCP/PV audits by regulatory agencies of Merck or clinical trial
investigators that led to significant fines, penalties, warning letters or
product seizures
Number of (new) initiated licenses for new technologies
Narrative of compounds provided to Product Development Partnerships
Manufacturing & Supply
Number of product recalls in the United States
Number of countries we currently supply with our products

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Number (and examples) of local and regional manufacturing partnerships(globally)
Number of products available via local and regional partnerships
Registration
Number of new registrations (per year) by region
Percent of local regulatory agency GCP/PV training requests fulfilled which
will help strengthen agency capabilities with their GCP/PV complianceoversight role
Enumeration of products that are submitted or have achieved WHO prequalification
Commercialization
Number of products for which we have access pricing
Number of countries where at least one product has intra-country pricing of
public and private sectors
Amount of investment into patient and provider education programs
Community Investment
Number of healthcare workers trained through our major programs andpartnerships
Amount of investment in partnerships for activities to address underlying
barriers to health, such as nutrition and access to clean water.
Number of patients reached through our major programs & partnerships

Total Greenhouse Gas (GHG) emissions (as CO2e) (million metric tons)

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Emissions of Volatile Organic Compounds (VOCs) (metric tons)
Total water usage (billions of gallons)Hazardous waste generated/recycled (metric tons)
Non-hazardous waste generated/recycled (metrics tons)

Diversity & Inclusion
Percentage of women in executive roles** (US)
Percentage of women on the Board
Percentage of under-represented ethnic groups on the Board
Percentage of under-represented ethnic groups in the workforce (US)Wellbeing
Percentage of employees engaged or fully engaged (Merck Culture Survey)
Percentage of employees who completed health assessment (US)Overall turnover rate *** (%)
Employee Lost Time Incident Rate (LTIR)
Employee Recordable Injury Rate (RIR)
Volunteerism
Percentage of employees who took release time according to the global
policy on employee volunteerism
Total number of volunteer hours

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Percentage of employees trained on our Code of Conduct
Number of substantiated concerns raised to the Office of
Ethics/Ombudsman/AdviceLine
Total number of substantiated complaints regarding breaches of customer
privacy and losses of customer data

20