With federal data breach notification legislation slated for passage this year, enterprises that collect and maintain personal information will have another reason for securing their networks.
Experts from the legal, business and IT worlds agree that although the environment is in flux, companies should begin protecting their data from theft and themselves from liability now.
It is becoming clearer that data protection is no longer the responsibility of an organizations IT personnel alone, and that high-level officials also play a role.
In prosecuting breaches, the government will target company officers if they were aware of security problems and had some control over them, said Joel Winston, associate director of the Division of Privacy and Identity Protection at the Federal Trade Commission.
“From the FTCs standpoint, there are situations where we do hold individual corporate officers responsible,” Winston said at the Data Integrity Summit in Washington, D.C. sponsored by the Cyber Security Industry Alliance.
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He added that so far, the FTCs targets have been companies with extreme network security problems. “If you look at the cases weve brought, these were not close calls. These were companies that had nothing in place.”
There is no simple, clearly defined way for organizations to satisfy data protection requirements, and each company must identify its own specific threats and risks and take steps to address them.
“I think its a daunting task for any corporate official to figure out what their obligations are,” Winston said, adding that numerous federal, state and international laws establish different requirements.
The standard for liability often boils down to whether an organization has taken reasonable measures to protect data, and what is reasonable for one company might not be for another, said Randy Sabett, special counsel for the Information Security and Cybercrime Practice Group at Cooley Godward LLP in Washington.
“There are many different shades of gray here,” Sabett said. “Whats appropriate for one company is not necessarily going to be appropriate for another company. You cant just say anymore: Well, I couldnt afford to do this.”
Part of the difficulty in establishing a harmonized data protection regime stems from the ad hoc nature of the evolution from paper to electronic records, said Howard Schmidt, president and CEO of R&H Security Consulting LLC.
Frequently, no companywide policies were written for classification and retention of electronic data, he said.
“Weve got to start from ground zero,” Schmidt said.
Some security experts suggest that companies develop a means of measuring security, even if standard measures are not available. Daniel Geer, vice president and chief scientist at Verdasys Inc., said that the industry needs to move away from “managing by with adjectives.”
“If theres anything we need right now, its metrics. Even a bad quality measure, if carried forward, you can get trend data out of,” Geer said. “You cannot manage what you cannot measure.”
Most importantly, experts agree, companies that collect and maintain personal data must ensure that there is no gap between their stated data protection policies and their practices. Such gaps could be considered negligence.
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