Person who owns or licenses the computerized data must notify individuals within 45 days after determining that a breach has occurred. They are the reason consumers were made aware of the significant data breaches that caught Congress’s attention in 2005. Data breach notification laws have two main goals. This article is part of the Future Agenda, a series from Future Tense in which experts suggest specific, forward-looking actions the new Biden administration should implement. In the United States, companies are largely not required by law to protect your personal data. However, some states requiring notification to state authorities do not have a minimum threshold amount of affected residents, meaning that a breach affecting a single resident in that state will also require giving notice to the relevant state authorities. Data breach notification laws typically cover personally identifiable information or individually identifiable information. (B) N O PREEMPTION PRIOR TO VALID AGREEMENT .—Subsections (a)(2) and (b) of section 7 shall not apply to a breach of security that occurs before a valid agreement under paragraph (1) is in effect. social security numbers), health data, or financial data. In today’s digital world in which a data breach can occur at any time to any business, every business needs to have a plan for how it will respond to a data breach and then train its employees to identify and report a breach when it occurs. Named the Alabama Data Breach Notification Act of 2018 (S.B. Those headaches are further compounded for multinational companies by foreign laws that allow for heavy penalties seemingly directed at U.S.-based tech firms. Summarizing Federal & State Data Breach Notification Laws. Security breaches involving your personal information – also referred to as data breaches – can create a significant risk of fraud or identity theft if the information is acquired by the wrong person. In addition, California requires businesses to offer affected individuals at least 12 months of free credit monitoring services, and Connecticut recently amended its law to require businesses to offer at least 2 years of free credit monitoring services to affected individuals. Notification or discovery of security breach, but notification not required if, after an appropriate investigation by the person or after consultation with the relevant federal, state, or local law enforcement agencies, person determines that a risk of identity theft or other fraud to any consumer is not reasonably likely to occur as a result of the breach. This means there are reasons to pass a federal data protection law not just from an ethical standpoint but also from a purely practical perspective . For the purposes of this article, the 50 U.S. states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands will be referred to collectively as “states” unless otherwise noted. By Philip N. Yannella & Kristen Poetzel Ricci on September 13, 2018. The Biden Administration Needs to Keep Underseas Internet Cables From Drowning. Federal mandatory data breach notification laws come into force November 1, 2018 What you need to know Does this legislation apply to small organizations? 318), it went into effect on June 1, 2018. This proliferation of laws around the world isn’t just a sign that the U.S. has fallen behind on this issue, it’s also an indicator of how much work U.S.-based companies are already doing around data security in order to operate in other countries. Join Slate Plus to continue reading, and you’ll get unlimited access to all our work—and support Slate’s independent journalism. Additionally, many states’ laws include a “risk of harm” analysis, under which the notification requirement is triggered if the perceived risk of harm from a breach reaches a certain threshold. New America, and The Act expands the kinds of personal information covered by the District’s data breach notification law. State laws on data breach notification. Each state’s data breach notification law functions to protect the residents of their respective states. The Office can seek up to $150,000 for data breaches that have not been properly disclosed to Indiana customers. Assemble a team of expertsto conduct a comprehensive breach response. A federal data protection law might even introduce a new enforcement agency, as CPRA introduces in California. The FTC can investigate companies that do not adhere to their stated privacy policies and do not have safeguards to protect customer data, but no broad federal law exists regarding breach notifications. › Chapter 38 - Data Breach Notification Act of 2018. The chart is a summary of basic state notification requirements that apply to entities who “own” data. The first proposed federal data breach notification law was introduced to Congress in 2003, but it never exited the Judiciary Committee. A federal data protection law should, at minimum, include a clear definition of what constitutes personal data, standards for what precisely companies have to do to protect that data, what they have to tell their customers about their data collection, sharing, and analysis practices, what penalties may result from failing to meet these requirements, and, finally, a threshold for how large a company has to be before it is required to comply with these requirements, in order to avoid squashing new, smaller entrants in the market. It’s an embarrassment that in 2020 that the country that played such an integral role in building and then commercializing the Internet has fallen so woefully behind other nations in developing suitable policy and regulatory measures to address the resulting risks. Others disagreed, saying a new federal law that doesn’t preempt state laws would create a 49th data breach regulation for businesses to comply with. If you value our work, please disable your ad blocker. is a partnership of It strikes a good balance between providing individual consumers with transparency and access to their data and requiring reasonable security measures for that data without placing an unduly onerous burden on businesses, while also considering the importance of international harmonization and interoperability. Security breach notification laws or data breach notification laws are laws that require individuals or entities affected by a data breach, unauthorized access to data, to notify their customers and other parties about the breach, as well as take specific steps to remedy the situation based on state legislature. Illinois provides for both enforcement by the Illinois State Attorney General, as well as a private right of action for Illinois residents. Future Tense Federal laws Edit Fortunately, there are a number of promising versions of such legislation already drafted, and growing support from the private sector for the federal government to act on this issue. That’s not to say that the United States should pass the exact same regulations as Europe or any other country—indeed, one of the advantages that Congress has from waiting so long to act on this issue is the ability to avoid some of the pitfalls of those laws, including the excessively high maximum fines permitted and the overly broad right to be forgotten measures, which have been construed as requiring search engines to remove news articles about harassment allegations under the European GDPR. Arizona State University States Approach Federal Data Breach Law with Caution With 47 different state laws on what companies are supposed to do when they become victims of cyberattack, is it time for federal legislation? 318), it … ©1996-2020 Davis Wright Tremaine LLP. Certainly it led to more reporting back in the early 2000s when California passed its law long before Congress seemed to have any appetite for such legislation. “Preempting state law would make consumers less protected than they are right now,” reads the letter signed by 47 state and territorial attorneys general. We’ve already seen that happen with data breach notification laws in this country. Now 48 US states, the District of Columbia, Guam, Puerto Rico and the US Virgin Islands have enacted their own data breach notification laws that require affected individuals to be notified in the event of an information security breach. Slate relies on advertising to support our journalism. In recent years, news of large-scale breaches of customer data held by retailers such as Target and The Home Depot, followed by class action litigation brought by the affected customers, has become commonplace and has led to intensifying demand for robust data protection laws in the United States. Moreover, Congress has waited so long to act that it already has a lot of examples it can draw on and learn from when it comes to data protection legislation—besides the CCPA, there’s the European General Data Protection Regulation, the Japanese Act on the Protection of Personal Information, the Brazilian General Data Protection Law, and the Indian Personal Data Protection Bill that appears to be nearing passage in India, to name just a few. that examines emerging technologies, public policy, and society. Data Security Breach Notification Laws Gina Stevens Legislative Attorney April 10, 2012 Congressional Research Service 7-5700 www.crs.gov R42475 . Congress has tried and repeatedly failed to pass a national notification law. Organizations that conduct business across all 50 states therefore have a considerable compliance challenge. One draft worth highlighting, particularly since it comes from a bipartisan congressional commission, is the Personal Data Security and Privacy Protection Act of 2020 draft proposed earlier this year by the Cyberspace Solarium Commission. [1] Examples of federal data privacy and protection laws are: HIPAA (Health Insurance Portability and Accountability Act), which protects individuals’ medical and other health information; GLBA (Gramm-Leach-Bliley Act), which requires financial institutions to protect their individual customers’ personal and financial information; and COPPA (Children’s Online Privacy Protection Act), which protects the personal information of children under 13 years of age. Please refer to the last revised date on each summary page for information on when the most recent updates have been made to the individual state summaries. It ups the game for businesses that manage the personal data of Massachusetts residents. This article is intended to promote awareness of these data breach notification laws, and to highlight certain aspects of these laws. Illinois requires for the notice to include, at a minimum, contact information for the three major consumer reporting agencies (Equifax, Experian and TransUnion) and the Federal Trade Commission, and guidance that an individual can obtain information from these agencies about obtaining fraud alerts and security freezes. (A) O THER FEDERAL LAW.—An agreement under paragraph (1) shall not effect a covered entity's obligation to provide notice of a breach of security or similar event under any other Federal law. Amendments to the Massachusetts’ data breach notification law went into effect on April 11, 2019. Read a New Short Story by Paul Theroux About a Future Pandemic, The Best Video Games We Played This Year (We Had Time for Lots of Them). Cybersecurity is a moving target and it may well be that data protection regulation needs to be revisited periodically and updated. Justia › US Law › US Codes and Statutes › Code of Alabama › 2019 Code of Alabama › Title 8 - Commercial Law and Consumer Protection. If you do not own the data at issue, consult the applicable laws and contact legal counsel. On July 25, New York Governor Andrew Cuomo signed two data security and breach notification bills into law. Therefore, a data breach affecting residents located in all 50 states, the District of Columbia and the U.S. territories could potentially require 50 or more different versions of notices that comply with each jurisdiction’s particular requirements. Generally, data breach notification laws apply to persons or businesses that own or license computerized data that includes PII. Discuss: At hearing on federal data-privacy law, debate flares over state rules Sign in to comment. Slate is published by The Slate Group, a Graham Holdings Company. It’s such a significant point that we wrote an illuminating white paper on this very subject to help you decide when to report a ransomware attack under various state, federal, and international laws. In the meantime, businesses and practitioners will need to contend with the current patchwork of federal and state laws in the event of a data breach. Following a breach of unsecured protected health information, covered entities must provide notification of the breach to affected individuals, the Secretary, and, in certain circumstances, to the media. If Congress cannot agree on the minutia, delegation may be a viable solution. Photo illustration by Slate. Due to the increased complexity and challenge in responding to a data breach arising from the differences between the various state data breach notification laws, the most important consideration is swift action in compliance with the applicable law(s) once the breach is discovered. In 2017, there was a disastrous breach at Equifax, Yahoo’s admission that billions of its email accounts were compromised, Deep Root Analytics’ a… We acknowledge the traditional custodians of Australia and their continuing connection to land, sea and community. As of the writing of this article, there appears to be some indications that Congress may again consider implementing new federal data privacy legislation. In Illinois, substitute notice requires an email notice to be sent to affected persons, a conspicuous posting on the business’s Internet web site for a minimum of 30 days, and notification to major statewide media. Security breach laws typically have provisions regarding who must comply with the law (e.g., businesses, data or information brokers, government entities, etc. The Data Security and Breach Notification Act of 2015, “aims to tackle the nation’s growing data security threats and challenges.” So far, that sounds pretty good to me. Data breach notification laws typically cover “personally identifiable information” or “individually identifiable information.” No single federal law or regulation governs the security of all types of sensitive personal information. Acknowledgement of Country. For example, the California Consumer Privacy Act allows California residents whose PII is disclosed in a data breach to claim statutory damages of up to $750 per resident per incident or actual damages, whichever is greater, and individual residents may combine their claims into a class action. Generally, a “breach” is defined as an unauthorized acquisition of computerized data that compromises the security, confidentiality, or integrity of PII maintained by the person or business. The state laws on breach notification have been critical for consumers. In addition, many states’ laws allow for delay of notice subject to investigations by law enforcement and to restore the reasonable integrity of the data system. New laws in Alabama and South Dakota in March 2018 brought the number of states with security breach notification bills to 50. The Data Breach Notification laws which started in California in 2003, and have now spread over most of the USA, have provided a stimulus to companies doing business there to take the protection and use of the personal data in their care with much greater seriousness and commitment realising that their companies’ reputations are at stake. The only thing worse than a data breach is multiple data breaches. If your organization handles or works with a certain type of data, you have a legal obligation to protect that data. But it’s no longer 2002 and we shouldn’t need California to drag us, state by state, over the course of more than a decade, into a similarly confusing system of dozens of inconsistent data protection and privacy laws that companies have to scramble to comply with. Cyber Investigation Expert: Federal Data Breach Law Expert | Computer Breach Investigation Expert | Computer Investigation Expert | Cyber Forensics Expert Delaying breach notifications could attract a fine up to $10,000 per day plus state attorneys’ fees, with a fine of $10,000 possible for each violation. There are some exceptions—certain specific types of data are regulated (health information, for instance, or data about children under 13), and the California Consumer Privacy Act, which went into effect this year, imposes some security and privacy requirements on companies collecting information about California residents. Now that the South Dakota data breach notification law has been enacted, Alabama is the only state that has not yet introduced state-level data breach notification … Companies may also be required by state data breach laws to act to minimize the effects of a breach. Uniform, predictable law on data security and notification is urgently needed. Each state’s law provides for an enforcement mechanism, either under the data breach notification law itself or a related consumer protection statute. The most common provision is that notification must be given “in the most expedient time possible and without unreasonable delay” following discovery or notification that a breach occurred. Most of the federal bills related to data security and data breach notification pending in Congress preempts the states. We acknowledge the traditional custodians of Australia and their continuing connection to land, sea and community. Data breach notification laws typically require covered entities to implement a data breach notification policy, and include requirements for incident reporting and handling and external breach notification. State laws on data breach notification. Move quickly to secure your systems and fix vulnerabilities that may have caused the breach. Under each state’s data breach notification laws, a resident of a state must receive notice of the breach according to the law of that particular state. Depending on the size and nature of your company, they may include f… This publication should not be construed as legal advice or legal opinion on any specific facts or circumstances. Breach laws that have a data acquisition threshold therefore would not require a notification to be filed with a regulatory agency or sent to affected individual in the case of ransomware. South Dakota introduced its … Data breach notification laws concern “personal information” or “personally identifiable information” (“PII”) of individuals, which is generally defined as an individual’s first name/initial and last name in combination with unencrypted sensitive data such as a social security number, driver’s license number, bank account number or credit/debit card number, medical or health insurance information, or a computer user name … A uniform federal law governing notification of data breaches would be welcome, but it should pre-empt related state laws if it is going to be helpful to employers, observers say. discovery or notification, consistent with the legitimate needs of the law enforcement agency or with any measures necessary to determine the scope of. By quickly identifying the information disclosed in a breach and the individuals affected so that prompt notice can be sent, a business can help contain and reduce the risks of its customers or employees falling victim to fraudulent transactions and identity theft, as well as mitigate its own risks of litigation from customers or employees affected by the breach. Individual states differ on whether additional forms of notice, such as by telephone or by electronic means are acceptable. But those piecemeal solutions do not come close to adequately addressing the huge gap at the heart of U.S. civilian cybersecurity policy: the absence of a federal data protection law. In addition, some states allow for “substitute notice” to be given in certain circumstances if the business can demonstrate that the cost of providing notice would exceed a certain amount (such as $250,000 in the case of Illinois), that the class of affected persons to be notified exceeds a certain number (such as 500,000 in the case of Illinois), or if a data collector (business) does not have sufficient contact information for the persons affected. At present, there are a few national standards in place regarding data breach notification of potential victims, but federal laws are limited at this time to financial institutions (the Gramm-Leach-Bliley Act, 15 U.S.C. Mobilize your breach response team right away to prevent additional data loss. With these steps in place, businesses can be confident that they are doing everything possible to safeguard the personal data of their customers and employees in compliance with the law. Notify Massachusetts Residents About a Data Breach (or a Potential Data Breach) Some states such as California allow for affected individuals to have a private right of action to sue a business directly. How a federal data protection or privacy law … It only took 15 years. With the recent passage of data breach notification laws in Alabama and North Dakota, all U.S. states and the District of Columbia now require that companies let us know when our personal data are breached. Each state’s law differs on what specific information the notice must include. The result is that while the EU has one basic law covering data protection, privacy controls and breach notification , the U.S. has a patchwork of state and federal laws, common law and public and private enforcement that has evolved over the last 100 years and more. This publication may constitute Advertising Material. So far, data protection laws in the U.S. have taken several different forms, including state website privacy policy laws (such as the California Online Privacy Protection Act (CalOPPA)), state general privacy laws (such as the California Consumer Privacy Act (CCPA)), Washington’s new privacy law and the Illinois Biometric Information Privacy Act), state data breach notification laws, and federal statutes providing for protection of specific types of information.1 Of these different approaches to data protection, data breach notification laws have reached a particularly high level of adoption in the U.S., with all 50 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands having passed data breach notification laws as of 2020.2 The purpose of data breach notification laws is to place affirmative obligations on entities holding certain personal data of individuals to provide timely notification of breaches to the individuals affected, and in some cases require entities to notify relevant state authorities as well. (2) EXTENDED DELAY OF NOTIFICATION.—If the notification required under subsection (a) is delayed pursuant to paragraph (1), a business entity shall give notice 30 days after the day At the top of the Biden administration’s cybersecurity agenda should be passing a piece of legislation that lays out clear definitions as well as security and privacy standards for personal information. 4828-5324-9087.2. The notice timing requirement varies widely among the states and demands a close review of the applicable individual state laws. The laws in all 50 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands allow for notice to be given by written letter. “Preempting state law would make consumers less protected than they are right now,” reads the letter signed by 47 state and territorial attorneys general. Other states such as California contain more detailed requirements for the format and contents of the notice. The Biden administration can’t make this happen on its own—but if it wants to find opportunities for bipartisan action in Congress, a data protection law is a great place to start. (2) EXTENDED DELAY OF NOTIFICATION.—If the notification required under subsection (a) is delayed pursuant to paragraph (1), a business entity shall give notice 30 days after the day The amendments require businesses to offer complimentary credit monitoring for 18 months if a breach involves a resident’s Social Security number. Take steps so it doesn’t happen again. You’ve run out of free articles. For more information about state data breach notification laws or other data security matters, please contact one of the following individuals listed below or another member of Foley’s Cybersecurity practice. Summary: Alabama became the final state in the U.S. to enact a data breach notification law on March 28, 2018. All contents © 2020 The Slate Group LLC. Insights from the frontlines of privacy and data security law. Risk of Harm Trigger for Notification Exists You can cancel anytime. Fortunately, Congress has been presented with a variety of statutory options from which it can craft data breach law. A data breach notification law would supplant the patchwork, state-based approach that appears unworkable from both compliance and litigation standpoints. And it’s not just embarrassing, it’s actively harmful—to consumers whose personal data is being stolen or exposed on a regular basis and to companies that lack clear guidance on how they should be protecting their customers’ data. In several states, a violation of the applicable data breach notification law is considered an unfair or deceptive trade practice that may be enforced by a state attorney general or other government authority and subject a business to civil penalties. 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