The German regulator has issued one of its largest penalties ever for data privacy lapses involving fraud and weak authentication.
Germany’s Federal Commissioner for Data Protection and Freedom of Information (BfDI) has fined Vodafone GmbH, the German arm of the global telecom provider, €45 million (about $51.4 million) for privacy and security violations. The penalty stems from two major issues: fraudulent activities by partner agencies and serious flaws in customer authentication systems.
The €15 million portion of the fine addresses Vodafone's failure to properly oversee partner agencies, whose employees engaged in deceptive contract practices. The remaining €30 million targets weaknesses in the company’s MeinVodafone platform and customer hotline, which left eSIM profiles vulnerable to unauthorized access.
According to BfDI, employees at third-party partner agencies created fictitious contracts or altered existing ones without customer consent. These fraudulent actions went unchecked due to insufficient monitoring by Vodafone.
Separately, the company’s digital platforms failed to secure customer identity verification adequately. Attackers were able to exploit weak authentication processes to gain access to eSIM profiles, sensitive virtual SIM cards used to activate mobile service.
Vodafone responded by overhauling both internal and external processes, cutting ties with untrustworthy partners, and replacing vulnerable systems. The company also enhanced its auditing procedures to prevent recurrence.
Federal Commissioner. Dr. Louisa Specht-Riemenschneider stated that while the penalties are serious, her office tries to promote proactive compliance. “Where data breaches take place, sanctions must be imposed. However... I also want to ensure that data breaches do not occur in the first place,” she stated.
She also acknowledged Vodafone’s full cooperation throughout the investigation and noted the company’s voluntary efforts to support public education initiatives in data protection and digital literacy.
Vodafone has already paid the fines and made several million euros in donations to programs addressing media literacy, data security, and cyberbullying.
The case reflects a broader regulatory shift in Europe, where enforcement increasingly focuses on both internal security controls and third-party risk. Telecom providers are under growing pressure to oversee their own networks and the practices of affiliated vendors. As digital services continue to expand through external partnerships, organizations must take a more proactive role in securing their systems and the wider networks they depend on.
An eSIM is a digital version of a SIM card used to activate mobile service. If compromised, attackers can potentially reroute calls, intercept messages, or gain access to a user’s mobile identity.
Telecom companies often outsource customer service and sales functions to partner agencies to expand reach and reduce costs, but this introduces third-party risk if oversight is lacking.
Fines are based on the severity of the violation, the number of individuals affected, the duration of non-compliance, and the company’s cooperation with the investigation.
While the fines were imposed on Vodafone GmbH, other regional branches may now reassess their own practices to avoid similar risks and penalties.
Yes, individuals may have the right to seek compensation under GDPR if they can show that the privacy failures caused them harm or financial loss.