It sounds like Yahoo has some explaining to do if it wants Verizon to go ahead with the $4.8 billion deal to buy its internet business: Verizon says it’s inclined to declare the impact of the massive data breach that affected at least 500 million Yahoo users as a “material” event.

“I think we have a reasonable basis to believe right now that impact is material,” Verizon General Counsel Craig Silliman told a small group of reporters, as reported by The Washington Post. “And we’re looking to Yahoo to demonstrate to us the full impact if they believe it’s not. They’ll need to show us.”

Even though U.S. officials have said privately that the Federal Bureau of Investigation believes that Russian government hackers were behind the breach, the state-sponsored nature of the attack doesn’t affect the analysis of materiality, he added. A material event could be anything that affects an organization’s strategic direction, mission, or business operation.

“From a legal perspective,” he said, “the question… ‘is it a state-sponsored attack’? isn’t really relevant in terms of what we’re looking at. The question is whether this [had] a material or an adverse effect on the asset we are buying.”

Yahoo says the investigation — still ongoing — has not turned up any evidence that any payment card data or bank information was included.

Verizon just raised a big warning flag for Yahoo [The Washington Post]

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