DMA leads effort to wind back our data breach notification protections
Of course, that’s not their headline, but it’s my reading of their attempt to claim that they are “leading” industry in supporting a national data breach notification law.
Under their recommendations, which you can read below in their press release and letter to members of Congress, they want a federal law that would pre-empt the patchwork of state laws. That’s great – but only as long as the federal law is a strong law that does not erode consumer protections already in place.
Note, however, that what the DMA proposes is a “significant risk of of identity theft or other economic harm” as the trigger for notification. So if you’re just horribly distraught that a breach resulted in exposure of your personal and sensitive information, but it’s unlikely to cause you economic impact, they wouldn’t have to tell you.
The DMA’s proposal would also permit much longer delays in notification to consumers, for which they offer some reasonable justification, but there needs to be a limit. The criminals aren’t sitting around and waiting for entities to notify us before they begin misusing our information, so delaying for months for a forensic investigation is not balanced by the risk to consumers, who should be alerted promptly so we can take steps to protect ourselves.
The DMA proposal would also prohibit individual cause of action so we couldn’t sue a business that had a data breach.
And just to protect their own asses even more at our expense, the DMA and the associations it is “leading” want to prevent the FTC from having any additional civil penalty authority. The fact that they’re against it is enough to make me for it.
All told, the DMA proposal is protective of businesses, but not the consumer, whom they thoughtfully don’t want to “overburden” with notifications. Yeah, right.
Here’s their press release:
The Direct Marketing Association (DMA) today lead a broad group of industry associations in asking Congress to pass a national data breach notification law.
The letter, signed by sixteen trade associations representing thousands of the leading companies across the information economy, notes that American businesses have compelling incentives to protect sensitive information and maintain valuable customer relationships – and that they work tirelessly to implement security measures to safeguard data.
“Businesses have compelling incentives to protect sensitive information and maintain valuable customer relationships,” the letter stated. “We need Congress to act now to enact legislation to help businesses effectively inform and ultimately protect the customers they serve when data compromises do occur.”
Among other important provisions for a national breach notification law, the letter highlighted the vital nature of preempting the current patchwork of state laws. “We continue to believe that meaningful data breach notification legislation must establish a clear federal standard that preempts the patchwork of state laws in this area,” said the letter. “Currently, disparate laws in 47 states plus the District of Columbia, Guam, Puerto Rico and the Virgin Islands, frustrate efficient and uniform breach notification to consumers.”
For nearly a decade, DMA has supported the passage of a uniform national standard for breach notification. Last year, DMA named the passage of a federal breach notification law as one of “Five Fundamentals for the Future” that Congress should focus on in order to protect the data-driven economy.
“Just last month, DMA strongly praised the White House for affirming its support for passing a national data breach notification standard,” said Rachel Nyswander Thomas, DMA’s vice president of government affairs. “We will continue to work with the Administration and Congress to pass such a federal standard.”
The full text of the letter follows:
May 22, 2014
The Honorable Harry Reid
Washington, D.C. 20510
The Honorable John Boehner
U.S. House of Representatives
Washington, DC 20515
Dear Majority Leader Reid and Speaker Boehner,
As Congress continues to examine the issues surrounding data breach legislation, we the undersigned associations write to express our ongoing support for a uniform national standard for data breach notification. We represent thousands of the leading companies in the information economy. Our member companies use data in responsible and innovative ways that have revolutionized the delivery of products and services to their customers and fostered many additional consumer benefits, such as virtually limitless free Web content. In short, information and information-sharing has changed the everyday lives of most Americans and has significantly contributed to U. S. economic growth overall.
Businesses that provide products and services valued by consumers must be engaged in constantly building consumer trust. American businesses work tirelessly to implement security measures to safeguard data. Unfortunately, business systems are also under constant assault from criminals employing sophisticated techniques. In fact, according to the recently released ninth annual Ponemon Institute “Cost of Data Breach Study: Global Analysis,” the most expensive data breaches were those caused by malicious and criminal attacks. In the U.S. these costs are the highest in the world, reaching $246 per record compromised. Businesses have compelling incentives to protect sensitive information and maintain valuable customer relationships.
We agree that the delivery of proper notification to affected individuals when data is compromised is a vitally important issue for both businesses and consumers. To this end, we have worked collaboratively with Members of Congress in both chambers and on both sides of the aisle over the years to help identify a workable path toward passage of a federal data breach notification law. As discussions continue in the 113th Congress, we remain committed to supporting the enactment of legislation that will provide consumers with timely information and meaningful protections without unnecessarily hampering critical business operations.
We continue to believe that meaningful data breach notification legislation must establish a clear federal standard that preempts the patchwork of state laws in this area. Currently, disparate laws in 47 states plus the District of Columbia, Guam, Puerto Rico and the Virgin Islands, frustrate efficient and uniform breach notification to consumers. This is particularly true when a data breach affects individuals nationwide who reside in a number of the jurisdictions covered by these various laws. Enforcement of a uniform federal standard should also be consolidated under the appropriate federal government agency or agencies.
Further, any federal notification regime should only be triggered a by a breach event that poses asignificant risk of identity theft or other economic harm to the affected individuals. We remain concerned that an overly-inclusive trigger would cause consumers to be burdened with unnecessary notifications that could ultimately lead to consumer complacence when a truly actionable breach occurs. Similarly, a too broadly-drawn definition of sensitive personally identifiable information (sensitive PII) – one that captures non-sensitive data elements such as consumer information one might find in a printed or online telephone directory – could unnecessarily trigger notice when no real threat of identity theft or fraud exist. A balanced bill would also exclude public records and information derived from public records from its scope.
As we have learned from several recent data breaches, businesses are best equipped to protect and notify consumers when they are provided sufficient time to gather the facts, secure their systems, and work with law enforcement before prematurely notifying the public. Initial breach detection, the restoration of system security, and a forensic analysis to determine which data may have been compromised and which customers may be affected are necessary but complicated tasks that often take months to complete. However, we do believe that businesses should always act to notify consumers without unreasonable delay, and, if additional time is required to complete what often becomes a criminal investigation, then law enforcement involved in helping companies track down criminals responsible for the breach should not have their investigation compromised by premature public notification.
Given the complexities of both data breach response and notification – often layered with the added complication of an ongoing criminal investigation — we believe that a federal notification standard should not allow for a private right of action. Similarly, we do not believe that the Federal Trade Commission should be granted additional civil penalty authority in this area.
We need Congress to act now to enact legislation to help businesses effectively inform and ultimately protect the customers they serve when data compromises do occur.
We look forward to working with you on these important issues.
American Association of Advertising Agencies
American Advertising Federation
Association of National Advertisers
Consumer Data Industry Association
Direct Marketing Association
Electronic Retailing Association
Electronic Transactions Association
Global Address Data Association
Interactive Advertising Bureau
MPA – The Association of Magazine Media
National Business Coalition
National Retail Federation
Online Publishers Association
Retail Industry Leaders Association
TechAmerica, powered by CompTIA
CC: Members of the Senate Committee on Commerce, Science, and Transportation; Committee on the Judiciary, and Committee on Banking, Housing and Urban Affairs; and members of the House Committee on Commerce and Energy; Committee on the Judiciary; and the Financial Services Committee