While the Senate Judiciary Committee approved three data breach and privacy bills, it's still unclear whether a federal data breach notification law will pass this year.
The Senate Judiciary Committee approved three data security
and privacy bills over strong objections from Republican members last week. The
opposition may complicate efforts to pass comprehensive cyber-security
legislation this year, observers said.
Committee members voted along party lines, 10 to 8, on Sept.
22 to approve the bills introduced by Sens. Dianne Feinstein (D-Calif.),
Richard Blumenthal (D-Conn) and Chairman Patrick Leahy (D-Vt). These bills, and
any
other cyber-security bills that come out of other committees, such as the
Senate Commerce Committee, will be consolidated into a single bill before being
presented to the full Senate for debate and vote.
The Senate Commerce Committee is still working on getting
Republican support for its data breach bill, introduced by
Chairman Jay
Rockefeller (D-W.Va).
"Congress has considered
data breach legislation
several times before, so the chances that any of the current bills will be
enacted are unclear," wrote
Harley
Geiger, policy counsel at the non-profit public interest organization
Center for Democracy and Technology. Cyber-security legislation faces "significant
hurdles to enactment," he noted.
These bills as approved by the Judiciary Committee would require
firms to safeguard personal data collected from consumers and establish a
national data breach notification law. The federal law would override the
patchwork of state laws that organizations currently have to follow in the case
of a data breach. However, if the state or local laws have state-specific
information about victim protection and assistance programs, those requirements
will remain intact.
Businesses that maintain personally identifiable information
on 10,000 or more Americans must develop a personal data privacy and security
program to regularly assess, manage and control risks, train employees, test
regularly for vulnerabilities, require outsourcing partners overseas to secure
the data, and periodically assess the program's effectiveness. Victims must be notified of a breach within
60 days by telephone or e-mail unless the organization could prove the breach
did not cause much harm or if disclosure it would threaten a criminal
investigation. Businesses must also post a media notice and alert credit
reporting agencies if the breach involves 5,000 or more individuals.
Sen. Chuck Grassley (R-Iowa) warned that the bills could
result in "over-notification" that would desensitize consumers to the
dangers of identity theft. The bills also would be a burden on small businesses,
according to Grassley.
"Under this bill, we may end up with more burdensome
regulations, small businesses forced into bankruptcy, jobs lost and consumers
still going unprotected because the over-notifications will be ignored,"
Grassley said in a statement referencing Feinstein's bill.
Feinstein's
Data Breach Notification Act would require federal agencies and businesses
that "engage in interstate commerce" who possess data containing
sensitive personally identifiable information to disclose any breaches.
Blumenthal's
Personal Data Protection and Breach Accountability Act would set up a
process to help companies establish appropriate minimum security standards to
safeguard sensitive consumer information and require companies to notify
individuals promptly after a data breach.
Leahy's
Personal Data Privacy and Security Act would establish a national standard
for companies to follow when reporting data breaches and require businesses to
implement data privacy and security programs to prevent them in the first
place. The bill also includes criminal penalties. Leahy had introduced similar
measures in 2005, 2007 and 2009 which had gone through the Judiciary Committee
but failed to get enough votes in the full Senate to become law.
"The problems of data breach and lax information
security are only growing more prevalent, so perhaps this time is different,"
Geiger said.
Leahy noted that in past years, privacy legislation received
bipartisan support. If the Republicans continue to object to the bills, it's possible
the cyber-security bill will fail in the Senate. Grassley said more changes needed
to be made.
Some Republican amendments were approved, such as a
mandatory three-year prison sentence for those convicted of fraud in the Leahy
bill. The bill was also amended to clarify that it was not illegal under the
Computer Fraud and Abuse Act to violate agreements like Website terms of
service or acceptable use policies.
The Electronic
Frontier Foundation praised the amendment, noting that it will protect
"ordinary computer users who happen to breach terms of use." CDT's
Geiger noted that it would focus the CFAA on the identity thieves and hackers
it was designed to target.
In the House, a task force of 12 Republicans led by Rep.
William Thornberry (R-Texas) is expected to send its cyber-security
recommendations to House Speaker John Boehner and Majority Leader Eric Cantor
on Oct. 3.
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