How Recent Data Breaches are Changing the Face of Cybersecurity for the Private Sector

Holland & Knight LLP
Contact

If "The Year of the Breach" and the rapid start to data breaches in 2015 have taught us anything, it is that any company is susceptible to a cyber attack; and, while data breaches are not a new concept, the way the private sector must start to think about them is. One of the more recent well-known breaches produced a vast array of non-traditional compromised information, ranging from valuable intellectual property (IP) to sensitive employee information to embarrassing emails from executives. The most recent large-scale, confirmed breach also involved compromised employment information, and while there is yet no indication that medical diagnosis or treatment information was exposed, it is safe to assume that attackers will attempt to go after such information in the near future, as the healthcare industry increasingly gets targeted. On the other hand, there are also other attackers out there who are solely focused on obtaining identity records (SSNs, dates of birth, first and last names, addresses, etc.) because of their value in hijacking accounts and perpetrating finely-tuned social engineering attacks. 

Since the large number of data breaches in 2013 made the headlines, many consumers—and possibly even the media outlets—may be numb to the news of yet another data breach, but we think the most recent breaches have changed the cybersecurity landscape for the private sector.

State-Sponsored Cyber Attacks Aren't Limited to Traditional Military Targets

Before the recent news reports, state-sponsored cyber attacks could traditionally be categorized as being matters of national security or defense and unrelated to the general business world. There certainly have been state-sponsored attacks on private and public companies, but none have gone as public as they have in late 2014 and early 2015; and, to the extent the private sector was targeted by state actors, the business sector generally contemplated this as involving critical infrastructure. However, recent breaches have blurred the line between traditional military targets and conventional criminal activity against the business sector. 

Early reports are pointing the finger at China for what may prove to be the largest breach in the history of the healthcare industry, and the Federal Bureau of Investigation (FBI) publicly confirmed that North Korea was responsible for a recent well-known cyber attack against the entertainment industry.  Before December 2014, a major entertainment corporation and the maker of the ever-popular game console might have considered themselves at risks of online hacking—after all, hackers often enjoy messing with millions of gamers and making systems "go dark" on Christmas morning—but this perception changed once North Korea launched its cyber attack.  In that moment, going to the movies was no longer thought of as a holiday family outing, as the hackers threatened 9/11-style attacks at the premiere of a U.S. film.  While a data breach was, by no means, a far-fetched concept for such an entity, surely most company executives—and the general public—did not envision that a cyber attack would devolve into terroristic threats. 

Consequently, when national actors are involved, there is an intermingling of state and private interests that is otherwise not present with the traditional private sector attack. This structure has the potential to change the dynamics of a data breach investigation:  with the latter, the company typically has the authority to decide whether to involve law enforcement; whereas, with the former, federal law enforcement will likely take the reins and insert itself into the matter.

Money Isn't Everything

Historically data breaches in the business world have been thought of as being financially motivated (e.g., credit card numbers, SSNs, bank account information, etc.). When discussing the "data breach" topic, financial institutions and the retail industry are the primary potential targets that come to mind. However, recent breaches demonstrate that cyber attacks on businesses can be politically motivated and, if nothing else, used as a method of inducing sheer embarrassment for the victims. Further, even where attacks are motivated by financial gain, the scope has extended beyond the customary monetary crimes directed at individuals to include economic advantages at the national level, with state actors targeting major U.S. businesses. As a result, companies can no longer think about and plan for data breaches solely in the context of credit card and bank account numbers; there may be other pieces of data of significant interest to the attackers, which the company has not taken into account in its breach preparedness program.

The Resulting Harm May Be Irreversible

When the impact of a cyber attack is limited to financial harm, such as a stolen credit card number, there is a strong possibility that the damage can (ultimately) be amended. Banks can reverse fraudulent charges, and consumers can enroll in credit protection services to prevent future malicious activity, such as a cyber criminal opening a new line of credit in the victim's name. However, when consumers experience invasions of privacy that go beyond monetary impacts, there is often no remedy for the impending harm. 

For example, with respect to health information, as soon as a patient's medical diagnosis has been released to the public, the information is out there forever, and there is no taking it back. Such harm extends well beyond the financial implications of what was once thought of as the traditional data breach. Family members could, for example, find out about a loved one's terminal illness before he or she was ready to share this information. 

Similarly, when employees' salary information is made publicly available, you cannot "erase" it from the memory of his or her colleagues, who are now negotiating for higher pay. And while one may ask for forgiveness, you certainly cannot expunge the stigma associated with salacious and inane comments made over email that have now come to the public light. Thus, risks to a company's brand and reputation are tremendously higher when the potential harm to the victims exceeds the parameters of financial impacts.

So What Does This Mean for the Business World? 

The recent breaches tell us that no matter who you are or what your organization does, your company could be the next data breach victim, and the new cyber landscape only reinforces the need to address these issues on the frontend. The bottom line is that affected customers are not going to care if the attacker is China or a teenage hacker in the basement; they will care that the attack happened in the first place. Thus, no matter the motivation driving the attack or the responsible party behind it, it is imperative that businesses exercise breach preparedness.

Have a Plan

If your business touches the Internet in any way (and all do) you have to be thinking about information security and incident response—and the time to do so is not after your first breach happens. Create policies and procedures to address potential cyber incidents, and ensure that these protocols encompass all relevant aspects of your organization (e.g., IT, legal, compliance, public relations, etc.).  Furthermore, as previously discussed, attackers are no longer focused solely on financial data; therefore, companies must be sure that relevant policies contemplate "non-traditional" data and incorporate procedures designed to address the protection and handling of such data accordingly.  Companies must also conduct regular reviews and periodic trainings to make certain that the policies are up-to-date and well understood across the organization.  

Regulators have repeatedly stated that there is no such thing as perfect security and that just because a breach happens does not mean that a company violated the law. What matters is that companies are making a substantial effort to address and prepare for the cyber threat and are taking matters like information security and privacy seriously. Testing, as will be touched on below, is one of the main things regulators want to see and have said that doing so will inform their prosecutorial discretion. Having a comprehensive cyber incident response plan is the first step in demonstrating a genuine concern for these matters.

Establish Relationships with Regulators, Law Enforcement and Other Necessary Vendors 

Just as with creating written policies, the time to establish relationships with law enforcement, regulators, and third-party vendors is not mid- or post-breach. Law enforcement has an interest in "catching the bad guys" just as much as the company who suffered the breach, and this is especially the case in instances where the culprit is a state actor. It is often forgotten that consumers, businesses, law enforcement and regulators alike all have a common interest in preventing data breaches and mitigating the impacts of malicious cyber activity. 

Similarly, it is critical that companies develop relationships and make arrangements with third-party vendors, such as credit monitoring companies, forensic firms, law firms, public relations firms, etc., in advance of a major incident. Attempting to coordinate mass mailings, manage the extremely high volume of inquiries that will be flowing into call centers, and articulate meaningful and sound public statements at the height of a crisis (all the while trying to determine what actually happened) only adds "fuel to the fire." Establishing relationships with these entities before you are obligated to engage them further substantiates that your organization is taking these matters seriously and will be beneficial if and when the time comes for their involvement down the road by facilitating a more streamlined and manageable incident response process.

Test, Test, Test

A company can have a seemingly perfect plan on paper, but it can be rendered meaningless if the policies are not effective and internalized by key players in the process. Companies who test their incident response policies have a significant advantage over those who first execute these procedures amidst a real life crisis, from both a practical as well as a liability standpoint. 

Responding quickly and accurately to the public is critical. Delay increases liability risk as well as costs.  For example, the California Attorney General (AG) took action against a company that had a security incident and waited approximately three months after completing forensics and one month after finishing its contents inventory to notify impacted customers. As a result, the company is now obligated to provide notification to affected consumers on a "rolling basis," must notify as soon as an impacted individual is identified, and must do so even if its investigation is ongoing.1 In addition, less than a week into the most recent major breach, at least six state AGs as well as state insurance commissioners have launched investigations into the incident. 

Cyber exercises allow organizations to identify gaps and rectify "problem areas" before an actual breach occurs and, ideally, avoid repeating past mistakes. Moreover, exercises further solidify that your company is taking privacy and security seriously and can help to inform prosecutorial discretion of regulators in the future (i.e., if regulators see that you are regularly testing your cybersecurity policies and programs, they may be less likely to launch an investigation or bring an action against you, as they will be more concerned with those companies who suffered a breach but were not testing). Finally, as prevalent as data breaches have become, consumers are expecting that companies address and prepare for these risks. 

It is important to note that cyber testing should be a continuous process. As new threats emerge and as the landscape continues to change, companies must continually test their programs to ensure that current vulnerabilities are adequately addressed. Beth Dugan, Deputy Comptroller for Market Risk at the Office of the Comptroller of the Currency, emphasizes that companies must establish "a tone at the top" with periodic risk assessments to develop "a sound security culture." Deputy Dugan went on to state:

Recovery and restoration plans need to be re-evaluated for technology environments that present different or new risks. Given the importance of the cyber threats and their potential impact, they must be a priority and addressed within a firm's risk governance framework and culture.

While the next target may be unknown, the next data breach is inevitable—and what that company is doing now to prepare for that event will dictate the severity and impending aftermath thereof.

1Stipulation for Entry of Final Judgment and Permanent Injunction, California v. Kaiser Found. Health Plan, Inc., Case No. RG14711370 (Cal. Super. Ct. Feb. 10, 2014), available at http://oag.ca.gov/sites/all/files/agweb/pdfs/privacy/kaiser_stipulation.pdf.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Holland & Knight LLP | Attorney Advertising

Written by:

Holland & Knight LLP
Contact
more
less

Holland & Knight LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.