wildercb/PrivacyTextBooks1.2 · Datasets at Hugging Face

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data.”28
Whether included in privacy laws or, later on, in separate security laws,
the security safeguards approach to regulating data security aims to require
organizations to implement security safeguards to protect personal data.
This approach differs significantly from breach notification, which focuses
only on providing notice that a data breach has occurred. Security
safeguards involve various best practices that organizations should
undertake regarding data security. Examples of safeguards include having a
chief security officer, having a comprehensive security program, having key
policies for security, controlling access to data, encrypting data, backing up
data, properly retaining and destroying data, and so on.
Types of Security Safeguards Laws
Broadly, there are two approaches to security safeguards laws: (1) the
standards approach, and (2) the reasonableness approach. The standards
approach provides a list of particular safeguards that organizations must
implement. In contrast, the reasonableness approach broadly mandates
“reasonable” data security safeguards but doesn’t specify particular ones.
This approach tackles the issues case-by-case. Over time, though, as
reasonableness laws are enforced, specific security measures emerge from
the cases.
THE STANDARDS APPROACH
Security laws that use a standards approach specify a series of security
safeguards that must be followed. For example, the Homeland Security Act,
which included the Federal Information Security Management Act
(FISMA) of 2002, adopts this approach. FISMA requires all federal
agencies “to develop, document, and implement an agency-wide program to
provide information security for the information and information systems
that support the operations and assets of the agency.”29
The Health Insurance Portability and Accountability Act (HIPAA)
regulations in the early 2000s adopts a hybrid standards approach. The
HIPAA Privacy Rule uses the reasonableness approach, merely stating that
administrative, technical, and physical safeguards should be used. But the
HIPAA Security Rule of 2003 uses the standards approach, including a
detailed list of 18 administrative, technical, and physical standards as well
as 36 implementation specifications, which indicate more specifically how
to comply with a standard.30 For example, companies must “Implement
technical policies and procedures for electronic information systems that
maintain electronic protected health information to allow access only to
those persons or software programs that have been granted access rights.”31
States have also enacted data security laws, some of which take a
standards approach.32 The most notable state security law was passed by
Massachusetts in 2007—the first state-level safeguards law. The law sets
forth a series of various administrative, physical, and technical safeguards
such as maintaining a written information security program, conducting risk
assessments, and auditing third-party service providers, among other
things.33 The security laws of Oregon and Nevada also employ a standards
approach.34
The standards approach is only used in a handful of security laws.
Lawmakers and rulemaking agencies are reluctant to pin down specifics
when the state of data security is constantly evolving due to new threats and
technologies. By far, the most common approach is the reasonableness
approach.
THE REASONABLENESS APPROACH
Under the reasonableness approach, laws typically require organizations to
protect personal data with “reasonable” or “appropriate” or “adequate”
safeguards. These words essentially mean the same thing, and they establish
a standard that is open-ended and vague. In applying this standard to
particular cases, regulators look to common practices.35
An early example of the reasonableness approach is the Privacy Act of
1974, which requires that federal governmental agencies “establish
appropriate administrative, technical, and physical safeguards to insure the
security and confidentiality of records.”36 The Federal Communications
Commission (FCC) has adopted a reasonableness approach to enforcing
against security violations by companies providing radio, television, phone,
and cable services.37 States have also enacted a number of data security
laws, most of which take a reasonableness approach.38
The most significant and prevalent user of the reasonableness approach
is the U.S. Federal Trade Commission (FTC). Since the late 1990s, the FTC
has used its broad authority under the FTC Act to bring enforcement actions
against companies that have had unreasonable data security. The FTC Act
grants the FTC the authority to enforce against companies that engage in a
“deceptive” or “unfair” trade practice. The FTC’s early cases involved
claiming “deception” when a company promised “reasonable” data security
in its privacy policy yet failed to live up to this promise.39 A deceptive act
or practice is a material “representation, omission or practice that is likely
to mislead the consumer acting reasonably in the circumstances, to the
consumer’s detriment.”40
For example, in 2002, the FTC brought an enforcement action against
Eli Lilly, a pharmaceutical company. Eli Lilly manufactured Prozac, a drug
used for treating depression. Eli Lilly offered customers a service that
would send them email reminders to refill their prescriptions. The company
later decided to stop the service, and it sent out an email to notify all
subscribers. Unfortunately, Eli Lilly made one of the most basic blunders of
email—it put all the individuals in the “To” line of the message rather than
in the “BCC” line. The result was that all users of this service now knew
each other’s identity. The FTC faulted Eli Lilly for not living up to its
promises to maintain the confidentiality and security of people’s personal
data because Eli Lilly failed to adequately train and oversee its employee
who sent the email.41
Later on, beginning with In the Matter of TJX Companies, Inc. in 2008,
the FTC began enforcing reasonable security in the absence of any
particular promises made by companies.42 The FTC has claimed that
unreasonable security is an “unfair” trade practice that “causes or is likely
to cause substantial injury to consumers which is not reasonably avoidable
by consumers themselves and is not outweighed by countervailing benefits
to consumers or competition.”43
Interestingly, in determining which security practices are unreasonable,
the FTC has relied heavily upon the National Institute of Standards and
Technology (NIST) Special Publication 800-53.44 This framework consists
of a series of standards. Over time, as the FTC has determined that various

data.”28

Whether included in privacy laws or, later on, in separate security laws,

the security safeguards approach to regulating data security aims to require

organizations to implement security safeguards to protect personal data.

This approach differs significantly from breach notification, which focuses

only on providing notice that a data breach has occurred. Security

safeguards involve various best practices that organizations should

undertake regarding data security. Examples of safeguards include having a

chief security officer, having a comprehensive security program, having key

policies for security, controlling access to data, encrypting data, backing up

data, properly retaining and destroying data, and so on.

Types of Security Safeguards Laws

Broadly, there are two approaches to security safeguards laws: (1) the

standards approach, and (2) the reasonableness approach. The standards

approach provides a list of particular safeguards that organizations must

implement. In contrast, the reasonableness approach broadly mandates

“reasonable” data security safeguards but doesn’t specify particular ones.

This approach tackles the issues case-by-case. Over time, though, as

reasonableness laws are enforced, specific security measures emerge from

the cases.

THE STANDARDS APPROACH

Security laws that use a standards approach specify a series of security

safeguards that must be followed. For example, the Homeland Security Act,

which included the Federal Information Security Management Act

(FISMA) of 2002, adopts this approach. FISMA requires all federal

agencies “to develop, document, and implement an agency-wide program to

provide information security for the information and information systems

that support the operations and assets of the agency.”29

The Health Insurance Portability and Accountability Act (HIPAA)

regulations in the early 2000s adopts a hybrid standards approach. The

HIPAA Privacy Rule uses the reasonableness approach, merely stating that

administrative, technical, and physical safeguards should be used. But the

HIPAA Security Rule of 2003 uses the standards approach, including a

detailed list of 18 administrative, technical, and physical standards as well

as 36 implementation specifications, which indicate more specifically how

to comply with a standard.30 For example, companies must “Implement

technical policies and procedures for electronic information systems that

maintain electronic protected health information to allow access only to

those persons or software programs that have been granted access rights.”31

States have also enacted data security laws, some of which take a

standards approach.32 The most notable state security law was passed by

Massachusetts in 2007—the first state-level safeguards law. The law sets

forth a series of various administrative, physical, and technical safeguards

such as maintaining a written information security program, conducting risk

assessments, and auditing third-party service providers, among other

things.33 The security laws of Oregon and Nevada also employ a standards

approach.34

The standards approach is only used in a handful of security laws.

Lawmakers and rulemaking agencies are reluctant to pin down specifics

when the state of data security is constantly evolving due to new threats and

technologies. By far, the most common approach is the reasonableness

approach.

THE REASONABLENESS APPROACH

Under the reasonableness approach, laws typically require organizations to

protect personal data with “reasonable” or “appropriate” or “adequate”

safeguards. These words essentially mean the same thing, and they establish

a standard that is open-ended and vague. In applying this standard to

particular cases, regulators look to common practices.35

An early example of the reasonableness approach is the Privacy Act of

1974, which requires that federal governmental agencies “establish

appropriate administrative, technical, and physical safeguards to insure the

security and confidentiality of records.”36 The Federal Communications

Commission (FCC) has adopted a reasonableness approach to enforcing

against security violations by companies providing radio, television, phone,

and cable services.37 States have also enacted a number of data security

laws, most of which take a reasonableness approach.38

The most significant and prevalent user of the reasonableness approach

is the U.S. Federal Trade Commission (FTC). Since the late 1990s, the FTC

has used its broad authority under the FTC Act to bring enforcement actions

against companies that have had unreasonable data security. The FTC Act

grants the FTC the authority to enforce against companies that engage in a

“deceptive” or “unfair” trade practice. The FTC’s early cases involved

claiming “deception” when a company promised “reasonable” data security

in its privacy policy yet failed to live up to this promise.39 A deceptive act

or practice is a material “representation, omission or practice that is likely

to mislead the consumer acting reasonably in the circumstances, to the

consumer’s detriment.”40

For example, in 2002, the FTC brought an enforcement action against

Eli Lilly, a pharmaceutical company. Eli Lilly manufactured Prozac, a drug

used for treating depression. Eli Lilly offered customers a service that

would send them email reminders to refill their prescriptions. The company

later decided to stop the service, and it sent out an email to notify all

subscribers. Unfortunately, Eli Lilly made one of the most basic blunders of

email—it put all the individuals in the “To” line of the message rather than

in the “BCC” line. The result was that all users of this service now knew

each other’s identity. The FTC faulted Eli Lilly for not living up to its

promises to maintain the confidentiality and security of people’s personal

data because Eli Lilly failed to adequately train and oversee its employee

who sent the email.41

Later on, beginning with In the Matter of TJX Companies, Inc. in 2008,

the FTC began enforcing reasonable security in the absence of any

particular promises made by companies.42 The FTC has claimed that

unreasonable security is an “unfair” trade practice that “causes or is likely

to cause substantial injury to consumers which is not reasonably avoidable

by consumers themselves and is not outweighed by countervailing benefits

to consumers or competition.”43

Interestingly, in determining which security practices are unreasonable,

the FTC has relied heavily upon the National Institute of Standards and

Technology (NIST) Special Publication 800-53.44 This framework consists

of a series of standards. Over time, as the FTC has determined that various