Recently, South Dakota and Alabama passed data breach notification laws. These were the last two states to pass such laws, and now all 50 states have breach notification laws. There’s also a federal breach notification requirement under HIPAA (passed with the HITECH Act of 2009).
In 2003, California passed the first data breach notification law. The law didn’t get a lot of attention until the ChoicePoint data breach was announced in 2005. That breach attracted national media attention largely because people started receiving notification letters in the mail. Other states started to follow California’s lead, passing their own breach notification laws. Now, just 15 years later, a milestone has been reached with all 50 states having breach notification laws. Washington, DC also has a breach notification law.
There still is no omnibus federal breach notification statute — just the requirement for health data (protected health information) under HIPAA. Other countries have started to jump on the notification bandwagon. Canada will have a breach notification requirement starting on November 1, 2018. In the EU, the GDPR has a breach notification requirement.
I have mixed feelings about breach notification laws. On the pro side, they have shed a lot of light on data breaches, which used to remain hushed up. The bright light has shown us just how woeful the state of data security is. Individuals have learned a lot from the process as well, including how often their data is affected.
But on the con side, breach notification laws are a great expense to comply with, amounting to a de facto strict liability fine on organizations that suffer a breach. The expense is the same no matter whether a company was careful, negligent, or even reckless with regard to its data security. But the most problematic thing about breach notification laws is that they have put so much focus on breach response when so many other dimensions of data security are being neglected. Many policymakers have looked to breach notification as the primary policy response to the problem of data security, but breach notification alone is far from a solution.
Professor Woodrow Hartzog and I are currently working on a book that will explore these issues, so please stay tuned.