wildercb/PrivacyTextBooks1.2 · Datasets at Hugging Face

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A main purported goal of breach notification is to help protect consumers,
but it is not clear that the laws achieve this purpose. Recall the Target
breach that we discussed earlier. Under the law of most states, Target was
required to individually notify affected customers. Target sent out a letter
from its CEO that stated, in part:
Target learned in mid-December that criminals forced their way into our systems and took guest
information, including debit and credit card data. Late last week, as part of our ongoing
investigation, we learned that additional information, including name, mailing address, phone
number or email address, was also taken. I am writing to make you aware that your name,
mailing address, phone number or email address may have been taken during the intrusion.
People are affected by so many breaches, and they receive letters like this
all the time. The letters say little to help people assess their risk, and there is
often not much people can do except to keep a more watchful eye on their
credit, change their passwords, and hope that nothing bad happens to them
in the future.
People also experience “breach notification fatigue.” Receiving
countless notices becomes tiresome, making some people throw up their
hands and think that all is hopeless.25 People might not respond with as
much concern or take protective steps after receiving so many breach
notifications.
Notification timelines are getting shorter as a way to make laws tougher.
The GDPR requires companies to send notifications without “undue delay”
but not later than 72 hours after becoming aware of the breach. The Federal
Deposit Insurance Corporation (FDIC) has proposed a 36-hour time
frame.26 But shorter timelines aren’t always beneficial. In the initial days
following a breach, not enough is known about the nature, size, and scope
of the data breach to report details accurately. Too much attention is placed
on how to make the notification and not enough on figuring out what went
wrong and how to stop the bleeding.
States and countries are racing to create the shortest possible reporting
and notification deadlines. Reporting often occurs too soon to provide
accurate, meaningful information.
Even when people do receive a notice, there often isn’t much they can
do about the breach. People can change their passwords and keep an eye on
their credit card transactions, but they can’t change their fingerprints, and
Social Security Numbers are very difficult to change.
UNPRODUCTIVE INCREASE IN THE COSTS OF A BREACH
A byproduct of breach notification is that it increases the costs and pain of a
breach. Reporting a breach to all the different regulators involved is a
cumbersome and complicated task—and it’s very expensive. A myriad of
different deadlines and requirements must be met—and often in a very short
period of time.
Notification letters are quite costly to send, especially for large breaches
involving tens of millions of people. Breach notification in essence works
like a strict liability fine, as it involves costs regardless of whether an
organization was at fault for a breach. Organizations must pay costs to
notify based on the size of the breach not based on how careless they were.
Lawmakers often aim to deter careless conduct by making fault the
trigger for liability. The idea is to increase costs for those acting carelessly.
Because the costs of notification are not based upon a company’s fault,
however, notification rules impose the same costs on everyone. Those who
have strong security must face the same costs as those who have poor
security.27 This is a lost opportunity to incentivize better data security. Of
course, other laws can penalize fault, such as private litigation, but as we
will discuss later, this type of law isn’t working very well either.
When California first conceived of breach notification, few knew the full
scope of our data vulnerability. The breach notification law was a critical
intervention at the right time. But our understanding of the problem has
evolved over time and so too must our rules. Breach notification provides
valuable transparency and some reputational incentives to invest in
meaningful data safeguards, but it achieves these goals at a tremendously
high expense, siphoning resources and money from other measures to
address security. Breach notification is also problematic when policymakers
view it as the primary response to data breaches. Breach notification is
being asked to do far more than it is capable of. It provides transparency,
but it doesn’t provide prevention, protection, or a fix.
Too much money and resources are spent on notification with not
enough being achieved. There are ways to provide transparency at a
fraction of the time and cost. For example, lawmakers might remove the
requirement for notifying individuals about a data breach in lieu of more
robust public disclosure requirements that ensure high visibility of a breach
in the media and by regulators. Although breach notification produces light,
it also generates a lot of unnecessary heat. Resources could be better
allocated to other security measures that would help improve data security.

Figure 3.1
SECURITY SAFEGUARDS LAWS
A second type of data security law is what we refer to as security
safeguards laws. These types of laws existed long before breach
notification laws. They are the workhorse of data security law.
Safeguards laws differ from breach notification laws because safeguards
laws involve administrative, physical, and technical data security standards.
Breach notification is mainly about providing information about data
breaches.
Security safeguards were incorporated into many of the privacy laws of
the 1970s, 1980s, and 1990s. It is important to note that security was often
dealt with in privacy laws rather than separate security laws. These days,
things have changed, and legislatures often pass independent security laws.
The reason why security was included in privacy laws traces back to the
original set of Fair Information Practice Principles (FIPPs), which have
formed the backbone of most data privacy laws. The FIPPs were famously
articulated in the 1973 Report by the U.S. Department of Health, Education,
and Welfare (HEW). The report, Records, Computers, and the Rights of
Citizens, was an early attempt to address the rights and responsibilities
associated with keeping data about individuals. The report recommended
the passage of a code of FIPPs, which have been highly influential in
shaping countless privacy laws. Among the FIPPs was the following: “Any
organization creating, maintaining, using, or disseminating records of
identifiable personal data must assure the reliability of the data for their
intended use and must take reasonable precautions to prevent misuse of the

A main purported goal of breach notification is to help protect consumers,

but it is not clear that the laws achieve this purpose. Recall the Target

breach that we discussed earlier. Under the law of most states, Target was

required to individually notify affected customers. Target sent out a letter

from its CEO that stated, in part:

Target learned in mid-December that criminals forced their way into our systems and took guest

information, including debit and credit card data. Late last week, as part of our ongoing

investigation, we learned that additional information, including name, mailing address, phone

number or email address, was also taken. I am writing to make you aware that your name,

mailing address, phone number or email address may have been taken during the intrusion.

People are affected by so many breaches, and they receive letters like this

all the time. The letters say little to help people assess their risk, and there is

often not much people can do except to keep a more watchful eye on their

credit, change their passwords, and hope that nothing bad happens to them

in the future.

People also experience “breach notification fatigue.” Receiving

countless notices becomes tiresome, making some people throw up their

hands and think that all is hopeless.25 People might not respond with as

much concern or take protective steps after receiving so many breach

notifications.

Notification timelines are getting shorter as a way to make laws tougher.

The GDPR requires companies to send notifications without “undue delay”

but not later than 72 hours after becoming aware of the breach. The Federal

Deposit Insurance Corporation (FDIC) has proposed a 36-hour time

frame.26 But shorter timelines aren’t always beneficial. In the initial days

following a breach, not enough is known about the nature, size, and scope

of the data breach to report details accurately. Too much attention is placed

on how to make the notification and not enough on figuring out what went

wrong and how to stop the bleeding.

States and countries are racing to create the shortest possible reporting

and notification deadlines. Reporting often occurs too soon to provide

accurate, meaningful information.

Even when people do receive a notice, there often isn’t much they can

do about the breach. People can change their passwords and keep an eye on

their credit card transactions, but they can’t change their fingerprints, and

Social Security Numbers are very difficult to change.

UNPRODUCTIVE INCREASE IN THE COSTS OF A BREACH

A byproduct of breach notification is that it increases the costs and pain of a

breach. Reporting a breach to all the different regulators involved is a

cumbersome and complicated task—and it’s very expensive. A myriad of

different deadlines and requirements must be met—and often in a very short

period of time.

Notification letters are quite costly to send, especially for large breaches

involving tens of millions of people. Breach notification in essence works

like a strict liability fine, as it involves costs regardless of whether an

organization was at fault for a breach. Organizations must pay costs to

notify based on the size of the breach not based on how careless they were.

Lawmakers often aim to deter careless conduct by making fault the

trigger for liability. The idea is to increase costs for those acting carelessly.

Because the costs of notification are not based upon a company’s fault,

however, notification rules impose the same costs on everyone. Those who

have strong security must face the same costs as those who have poor

security.27 This is a lost opportunity to incentivize better data security. Of

course, other laws can penalize fault, such as private litigation, but as we

will discuss later, this type of law isn’t working very well either.

When California first conceived of breach notification, few knew the full

scope of our data vulnerability. The breach notification law was a critical

intervention at the right time. But our understanding of the problem has

evolved over time and so too must our rules. Breach notification provides

valuable transparency and some reputational incentives to invest in

meaningful data safeguards, but it achieves these goals at a tremendously

high expense, siphoning resources and money from other measures to

address security. Breach notification is also problematic when policymakers

view it as the primary response to data breaches. Breach notification is

being asked to do far more than it is capable of. It provides transparency,

but it doesn’t provide prevention, protection, or a fix.

Too much money and resources are spent on notification with not

enough being achieved. There are ways to provide transparency at a

fraction of the time and cost. For example, lawmakers might remove the

requirement for notifying individuals about a data breach in lieu of more

robust public disclosure requirements that ensure high visibility of a breach

in the media and by regulators. Although breach notification produces light,

it also generates a lot of unnecessary heat. Resources could be better

allocated to other security measures that would help improve data security.

Figure 3.1

SECURITY SAFEGUARDS LAWS

A second type of data security law is what we refer to as security

safeguards laws. These types of laws existed long before breach

notification laws. They are the workhorse of data security law.

Safeguards laws differ from breach notification laws because safeguards

laws involve administrative, physical, and technical data security standards.

Breach notification is mainly about providing information about data

breaches.

Security safeguards were incorporated into many of the privacy laws of

the 1970s, 1980s, and 1990s. It is important to note that security was often

dealt with in privacy laws rather than separate security laws. These days,

things have changed, and legislatures often pass independent security laws.

The reason why security was included in privacy laws traces back to the

original set of Fair Information Practice Principles (FIPPs), which have

formed the backbone of most data privacy laws. The FIPPs were famously

articulated in the 1973 Report by the U.S. Department of Health, Education,

and Welfare (HEW). The report, Records, Computers, and the Rights of

Citizens, was an early attempt to address the rights and responsibilities

associated with keeping data about individuals. The report recommended

the passage of a code of FIPPs, which have been highly influential in

shaping countless privacy laws. Among the FIPPs was the following: “Any

organization creating, maintaining, using, or disseminating records of

identifiable personal data must assure the reliability of the data for their

intended use and must take reasonable precautions to prevent misuse of the