Privacy & Cybersecurity Law Blog

On January 14, 2011, the European Network and Information Security Agency (“ENISA”), which was created to enhance information security within the European Union, published a report entitled “Data breach notifications in the EU” (the “Report”).

Currently, there is wide debate throughout the EU regarding data breach notification requirements.  The debate stems from recent high-profile data breach incidents and the introduction of mandatory data breach notification requirements for telecommunication service providers imposed by EU Directive 2009/136/EC (amending EU Directive 2002/58/EC, the “e-Privacy Directive”), which must be integrated into EU Member States’ national laws by May 25, 2011.  The goal of the Report is to assist Member States, regulatory authorities and private organizations with their implementation of data breach notification policies.

The United States Congress is currently considering several bills addressing cybersecurity issues.  Below are brief summaries of four such bills.

The Grid Reliability and Infrastructure Defense (“GRID”) Act

The GRID Act was passed by the House of Representatives on June 9, 2010. This bill would amend the Federal Power Act to grant the Federal Energy Regulatory Commission (“FERC”) authority to issue emergency orders requiring critical infrastructure facility operators to take actions necessary to protect the bulk power system. Prior to FERC issuing such an order, the President would have to issue a written directive to FERC identifying an imminent threat to the nation’s electric grid.  FERC would be required to consult with federal agencies or facility operators before issuing an emergency order only “to the extent practicable” in light of the nature of the threat. The GRID Act is being considered by the Senate Committee on Energy and Natural Resources at this time.

According to BNA’s Privacy Law Watch, on March 8, 2010, Senator Patrick Leahy asked President Obama to nominate members for the dormant Privacy and Civil Liberties Oversight Board.  The Board, which was created in 2004 upon the recommendation of the 9/11 Commission, focuses on ensuring that privacy and civil liberties concerns are incorporated into anti-terrorism laws and regulations.  Although President Obama had pledged in May 2009 to reconstitute the board, which has had no members since January 2008, privacy advocates say that his focus on cybersecurity issues has delayed ...

A lawsuit that will soon commence in Arizona has the potential to alter the data breach liability landscape by making data security auditors liable for data breaches experienced by the companies they audit.  The case, Merrick Bank Corp. v. Savvis Inc., has its origins in events that began in 2003, when Merrick Bank (“Merrick”) offered to hire CardSystems Solutions (“CardSystems”) to process credit card transactions for its merchant customers.  The offer was contingent upon CardSystems achieving certification under VISA’s Cardholder Information Security Program (“CISP”), which is the predecessor to the Payment Card Industry Data Security Standard (“PCI DSS”).  Savvis audited CardSystems in 2004 and found that it had “implemented sufficient security solutions” and followed “industry best practices.”  VISA certified CardSystems shortly after receiving Savvis’ audit report.  In 2005, CardSystems revealed that it had experienced an information security breach that compromised forty million payment cards.

The White House today released the report from the 60-day cybersecurity review the President ordered in February. Speaking to a packed audience in the East Room, President Obama outlined the broad range of threats facing the digital infrastructure, focusing not only on national security and organized crime attacks, but also on identity theft and incursions into individual privacy.

He promised a “new comprehensive approach to securing our nation’s infrastructure,” including appointment of a White House cybersecurity coordinator reporting to both the National Security Council and the National Economic Council. The coordinator would have broad responsibilities, but little direct authority, although the President did promise that the coordinator would have access to him.

News last week that Chinese and Russian hackers had infiltrated the U.S. electrical power grid gave practical significance to already high-profile issues in Washington -- how better to secure the nation’s cyber-infrastructure.  Late in 2008, the Center for Strategic and International Studies Commission on Cyber Security for the 44th Presidency (the Commission) released a report citing the U.S.’s failure to protect cyberspace as “one of the most urgent national security problems” facing the Obama administration.  The failure threatens the safety and well-being of the United States and its allies and raises immediate risks for the economy.  In a global economy, where economic strength and technological leadership are as important to national power as military force, failing to secure cyberspace puts the U.S. at a disadvantage.  When Chinese and Russian intruders apparently left software on networks supporting the U.S. power grid that could be used to compromise electric and water systems, the warnings of the Commission proved true in a real-world way.

Former Silicon Valley entrepreneur Rod Beckstrom has tendered his resignation from the post of Director of United States National Cybersecurity Center, effective March 13, 2009.  In his resignation letter to Secretary of Homeland Security Janet Napolitano, Mr. Beckstrom complained of inadequate funding and criticized the National Security Agency’s dominant role in “most national cyber efforts.”  He characterized this arrangement as “bad strategy” because “intelligence culture is very different than a network operations or security culture,” and he argued ...