New EU Breach Notice Rule is Strict, but One Rule May Be Less of a Headache than 49 U.S. Laws

Talk of the necessity for effective data breach notification rules has been everywhere recently.  A strict new rule requiring breach notice within 72 hours of discovery is coming to the European Union as of May 2018 has companies concerned about compliance. The U.K. privacy regulator is offering advice on how that new EU rule may apply after Brexit. Canada is preparing to implement its own mandatory breach notice law.

The Equifax Inc. breach exposed the personal information of nearly every adult in the U.S., yet the country lacks a uniform federal data breach notification law.

Instead, U.S states present a patchwork of breach notice laws. The District of Columbia and 48 U.S. states have breach notification laws, with a variety of standards that trigger when regulators and affected individuals must be notified. California—which in 2002 became the first state to adopt a breach notice law--mandates notification when “information was, or is reasonably believed to have been, acquired.” Colorado requires notification only when an organization is aware there has been a breach of the system.

The U.S. state laws also set different risk of harm triggers for when notification of a breach is required. California for example, doesn’t give a strict time, but only requires notification “in the most expedient time possible and without unreasonable delay.” Florida, on the other hand, requires notification “expeditiously as practicable and without unreasonable delay,” but also sets a 30-day limit from the time a breach is discovered.

Co-chairman of the Congressional Cybersecurity Caucus Rep. Jim Langevin (D-R.I.) Sept. 18 reintroduced the Personal Data Notification and Protection Act to provide for a single national breach notification standard. Although the House "has been pretty partisan," the bill has bipartisan appeal, an aide to Langevin told Bloomberg BNA.

BreachLangevin’s aim with the bill is to start the conversation for a national data breach notice law even if the bill doesn't get enacted into law, the aide said.

The bill would require that any company that collects sensitive personally identifiable information about more than 10,000 persons during a 12-month period give notification to affected individuals following the discovery of a breach. Notice must be given “without unreasonable delay,” no later than 30 days after the breach is discovered.

Most state breach notice laws allow companies to hold off immediately notifying affected individuals of breaches until they take measures to identify and stop the breach. Waiting until law enforcement or national security officials request a company to delay notification until they determine making the breach known won’t compromise an investigation.

What all this adds up to is a compliance headache for companies and lots of hard to answer questions for each breach incident. Equifax waited for six weeks from when it discovered the breach until it notified affected individuals. The company has come under fire from lawmakers, consumers, and regulators for the delay. But whether that was reasonable under the circumstances remains to be seen.

To keep up with the constantly evolving world of privacy and security sign up for the Bloomberg BNA Privacy and Security Update.

By George R. Lynch