U.S. Senate leaders may be close to reaching an agreement on a legislative proposal that would establish a national data breach notification and security standard (the Data Acquisition and Technology Accountability and Security Act) which would streamline nationwide reporting requirements for businesses. However, there are a plethora of reasons it may not make much progress through Congress this year. The current 49-state, soon to be 50-state, patchwork of breach notification laws that are all different in various meaningful ways makes compliance with a nationwide breach (which is what typically occurs in companies) quite tedious. This proposed federal legislation would set a national standard for securing customer data and reporting data breaches.
Similar legislation has stalled in Congress for nearly a decade, but recent events, including numerous high profile data breaches and other events where data was misused, the EU Parliament’s approval of the General Data Protection Regulation (GDPR) with an enforcement date of May 25, 2018, and California’s proposed ballot initiative on privacy (improving consumers’ rights regarding collection and usage of their data), have catalyzed Congress once more. Last week, senators introduced legislation called Customer Online Notification for Stopping Edge-provider Network Transgressions (CONSENT Act). The bill requires explicit opt-in consent from users to share, use, or sell any personal information, notification any time data is collected, shared, or used, and new security and breach reporting requirements. The CONSENT Act relies on the Federal Trade Commission to enforce any violations of those new rules.
There are many obstacles to enacting federal data privacy and security legislation, including disputes over preemption of state law, reasonable security standards, penalties, and exemptions. After Republicans took control of the White House and both chambers of Congress last year, federal regulatory activity diminished, and cities and states have stepped in to fill the void. The attorneys general of 31 states are pressing lawmakers to scrap the Data Acquisition and Technology Accountability and Security Act, arguing that it waters down more stringent state laws requiring prompt notification of breaches to consumers. Since South Dakota passed a new law in March, every state but Alabama has data breach laws in effect which require companies to notify consumers when their personal information hacked. And last week Alabama’s governor signed the final state data breach law which goes into effect on May 1, 2018. The attorneys general argue that these state laws have catalyzed greater transparency about data breaches and improved steps companies can take to prevent breaches from occurring again.
In addition to state laws, some cities have taken affirmative steps regarding data security. NYC Mayor de Blasio announced the launch of a cybersecurity initiative, NYC Secure, which is supposed to defend New Yorkers from malicious cyber activity on mobile devices, public Wi-Fi networks, and beyond. The first program is a smartphone protection app which issues warnings to users when suspicious activity is detected on their mobile devices.
Stay tuned to see who wins the state versus federal power struggle over data privacy and security—exciting times are ahead!