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The Florida Bar Journal
September/October, 2016 Volume 90, No. 8
What We Talk About When We Talk About “Reasonable Cybersecurity”: A Proactive and Adaptive Approach

by Kevin L. Miller

Page 22



Data breaches have become so commonplace that only the truly far-reaching events seem to be noticed anymore. However, a recent breach that exposed the data of 6.4 million children, in what experts called the largest known hack affecting youngsters,1 got the attention of the U.S. Congress.2 On November 14, 2015, VTech, “the global leader in electronic learning products from infancy to preschool and the world’s largest manufacturer of cordless phones,” was hacked.3 The stolen data included the children’s names, gender, and birthdates, as well as the mailing addresses and email addresses of their parents, secret questions and answers for password retrieval, IP addresses, and download history.4 There was enough information in the breach that complete family profiles could be reconstructed. Also exposed were the kids’ photos, audio recordings, and chat logs gathered by “Kid Connect,” a service that allows parents with a smartphone app to chat with their kids via a VTech tablet.5 The logs, pictures, and recordings could be traced back to specific usernames, allowing those possessing the hacked data to identify the people chatting and in the photos.6 The hacker who perpetrated the attack anonymously disclosed to a reporter, “Frankly, it makes me sick that I was able to get all this stuff.”7

The hacker gained access with an “SQL injection” attack, a well-known way of using rogue database query language to bypass security and allow free access to the information inside.8 An analysis by Troy Hunt, a cybersecurity expert, revealed that VTech had failed to enact even the most basic of security measures, including failing to secure the data in transit with basic SSL encryption, storing security questions and answers in unencrypted plaintext, and failing to enhance password “hashes” by “salting.”9 All of these measures have been standard practice in systems security for at least a decade.10 “It’s taken me not much more than a cursory review of publicly observable behaviours to identify serious shortcomings,” Hunt wrote.11

The VTech hack demands our attention not only for the sensitivity of its victims, but also because VTech’s example so sharply contrasts with reasonable conduct and good practice. Studying VTech’s experiences and choices can provide organizations with valuable insights about how they should be approaching cyber-risk. This article provides an overview of the cybersecurity legal framework and advocates for a proactive and adaptive approach to managing cyber-risk that transcends today’s reactive paradigm.

Legal and Regulatory Framework of Cybersecurity
The current U.S. legal framework for cybersecurity is a patchwork, consisting of a number of overlapping federal standards aimed at regulated entities in various sectors, state cyber-breach notification laws, state statutes, and caselaw arising from consumer’s actions against companies. Despite the lack of a comprehensive standard, a requirement for organizations to implement affirmative cybersecurity practices has arisen as a result of the body of administrative law stemming from Federal Trade Commission (FTC) enforcement actions. Although the FTC lacks any specific statutory authority to regulate cybersecurity policy, it has repeatedly used its broad §5 authority to prohibit “unfair or deceptive acts or practices in or affecting commerce” to enforce data protection standards against companies.12

A “deceptive” act is a representation or omission that is likely to mislead a consumer into using a product or service.13 In the context of cybersecurity, when an organization claims in its website security policy that it “adequately secures data” but then fails to implement good cybersecurity practices, it has committed a deceptive act subject to FTC action.14 The agency may also interpret the existence or lack of a given cybersecurity practice as “unfair” when it causes, or is likely to cause, injury to consumers.15 In contrast to the deceptive practices standard, the organization does not need to have represented itself to consumers as having adequate data security.16 No actual cyber-breach needs to have arisen under either standard.17

While the precise boundaries of the FTC’s authority are unsettled, over the course of approximately 100 cases, the agency has established an evolving conception of “reasonable cybersecurity” in general commerce.18 The FTC has been less than sympathetic with organizations that allege “reasonable cybersecurity practice” is too amorphous a standard for guidance. Indeed, at a panel discussion on cybersecurity issues on March 9, 2016, FTC Commissioner Terrell McSweeny expressed incredulity that organizations continue to claim that “reasonable security” is an ambiguous term.19 Guidelines for implementing reasonable security processes are “all over our website,” said Commissioner McSweeny. “It means having a process, appointing responsible people for implementing the process, providing training, and so on.... Companies not making any attempts at reasonable security measures are doing so at their own risk.”20 The risk to which Commissioner McSweeny refers is the legal and regulatory risk of FTC audit and enforcement activities.21

Regulated Sectors
In addition to the FTC baseline oversight applicable to general commerce, many business sectors have individualized practices, standards, and regulatory bodies. In some cases, these define a rigid compliance framework to which businesses in that sector will be held accountable by overseeing regulatory agencies. In other cases, the practices and guidelines are not rigidly enforced or audited, but instead frame the understanding of reasonable cybersecurity practice for that sector. While each of the individual regulatory agencies has its own enforcement personnel and objectives, most have a reasonable cybersecurity standard and interpret that standard in light of the practices and guidelines applicable to that sector.

The individual practices and guidance of each agency are too numerous and complex to comprehensively discuss here, but a few examples are illustrative. The Federal Communications Commission (FCC) has powers similar to the FTC’s to regulate broadcasters and common carriers under §222 for their treatment of customer data.22 The FCC recently previewed new draft broadband privacy rules that would extend the requirements for minimum security processes and consumer data breach notification to internet service providers.23 The Commodity Futures Trading Commission (CFTC) broadly requires reasonably designed cybersecurity practices for companies operating in the financial markets and has drafted numerous guidelines relating to the security of transaction data and consumer personal and financial information.24 CFTC’s chair views cybersecurity as “the primary risk to financial markets.”25 The Consumer Financial Protection Bureau (CFPB) enforced a consent order and $100,000 civil monetary penalty against Dwolla, Inc., an online payment platform.26 Among other things, Dwolla claimed, but failed, to comply with payment card industry (PCI) standards.27 This example shows that the CFPB is willing both to interpret and enforce external industry standards when regulated entities are deceptive about compliance. Dwolla also failed to encrypt even the most sensitive customer data, including bank account information and Social Security numbers, contradicting its claim to encrypt and store securely 100 percent of consumers’ information.28 The consent order mandated that Dwolla obtain outside auditing for a period of five years to ensure compliance with “procedures and standards generally accepted in the profession.”29

Florida and Other States
Cyber-breach notification laws now exist in 47 states.30 In general, these laws require companies to notify consumers when their personal information is divulged during a cyber-breach, though the laws vary in details such as the timing and method for notification.31 On July 1, 2014, the Florida Information Protection Act (FIPA) enacted the latest instance of Florida’s cyber-breach notification law, F.S. §501.171, replacing and strengthening the prior statute (§817.5681). Florida’s law is relatively unique and progressive in several aspects. For instance, Florida’s meaning of “personal information” expands the typical definition from items, such as Social Security and financial account numbers to include user names, email addresses, and security questions/answers, recognizing that this information may be used to compromise multiple online accounts.32 Florida requires notification to the state attorney general when more than 500 individuals in Florida have been affected, even when the “risk of harm” exception can be invoked with respect to the individuals themselves.33 The new law also permits the Florida attorney general to request copies of forensic reports, breach plans and policies, and other information when necessary.34 The Florida law retains the previous statute’s provision of monetary penalties for failure to notify within the required 30-day period.35

Notification laws in other states have also become more stringent. Until recently, most state statutes made available an exemption or “safe harbor” from notification requirements when the stolen data was encrypted.36 As of July 1, Tennessee is the first state to remove the literal encryption safe harbor from its cyber-breach notification statute.37 While Tennessee still allows companies to perform a “risk of harm” analysis that may exempt them from notification requirements, Tennessee’s new law recognizes that encryption is not a panacea, especially when outdated or flawed encryption protocols were used or the encryption key was compromised.

Several states, including Florida, Connecticut, and California, have also been active in devising forward-looking approaches to enforcement. The recent Florida statute now includes a reasonable cybersecurity-like standard, requiring organizations to “take reasonable measures to protect and secure data in electronic form containing personal information.”38 Connecticut requires a publicly posted privacy policy.39 Like FTC and other federal agencies, Connecticut is willing to bring enforcement actions even when no data breach has occurred.40 Connecticut also works closely with federal agencies to bring coordinated enforcement actions.41 The California Attorney General’s Office issued its “Data Breach Report 2012-2015” that outlines businesses’ responsibilities to protect personal information and report data breaches.42 The report states that, “failure to implement all the [Center for Internet Security’s Critical Security c]ontrols that apply to an organization’s environment constitutes a lack of reasonable security” under the state’s information security statute.43

Other Initiatives
Other forms of guidance, such as those promoted by industry groups or related to the nature, origin, or target of the data itself, can shape the meaning of reasonable cybersecurity over time. For instance, federal statutes mandate a variety of restrictions on how the data of children and students must be treated regardless of the operative business sector. The Children’s Online Privacy Protection Act (COPPA) regulates the collection and storage of data for children ages 13 and under.44 The Family Educational Rights and Privacy Act governs educational privacy.45 Adding an additional layer of complexity, Common Sense Media, a nonprofit policy group, recently announced a privacy evaluation initiative to conduct compliance reviews of education technology companies with respect to federal law and guidance from the Department of Education’s model terms of service.46 In some cases, international law can even come into play; for example, the European Union General Data Protection Regulation mandates a separate and rather onerous set of restrictions on companies that store, possess, or use the data of individuals residing in the European Union member states.47

Late in 2015, Congress passed the Cybersecurity Information Sharing Act (CISA), which establishes a statutory framework to encourage the voluntary sharing of cybersecurity information between companies and the government.48 Among other things, CISA offers liability protection for companies that share cyber-threat info via a Department of Homeland Security Portal.49 The hope is that the portal will increase cooperation between companies in identifying and stopping new cyber-threats. It is not far-fetched to think that, while information sharing is voluntary, a time is coming in the near future when keeping up-to-date on known threats using well-known and effective cybersecurity information portals may become an established part of reasonable cybersecurity practice.

Proactive vs. Reactive Cybersecurity
The near ubiquity of state cyber-breach notification laws is testament to the practically universal belief that organizations should notify individuals when hackers steal their data. This bare statutory duty has in some cases disoriented companies with respect to their deeper legal obligations under a reasonable cybersecurity standard. Companies have become quite adept at enacting incident response plans that notify customers and relevant agencies, provide a year of credit monitoring, and hire cyber-defense contractors to review and secure their data systems after the fact. However, such plans are directed at what to do after one’s defenses have failed, rather than implementing reasonable cybersecurity to avoid problems. To analogize, in hurricane-prone Florida, it would be the difference between a disaster preparedness plan that included a family meeting point, a list of what to load in the car before evacuation, and the insurance policy details, as opposed to a plan that includes installing storm windows, extra strapping on the house to tie the roof, frame, and foundation together, cleaning the gutters, and solving those pesky drainage problems.

It is clear from the foregoing discussion that an organization has affirmative responsibilities to protect key customer data, and that the notion of reasonable security is shaped by and evolves with technology, regulatory guidelines, and common practices in a business sector. These responsibilities, and the company’s burden to implement a process that adapts to changing practice over time, must be proactive, rather than reactive, at its core. As Troy Hunt wrote in the aftermath of the VTech hack: “Despite the frequency of these incidents, companies are just not getting the message; taking security seriously is something you need to do before a data breach, not something you say afterwards to placate people.”50

A Reasonable Cybersecurity Process
What might a proactive plan for reasonable cybersecurity look like? Massachusetts requires that companies storing or using personal information about a state resident develop a written information security plan, or WISP, for protecting the data.51 The Massachusetts regulations mandate such sensible computer security protocols as 1) user authentication and access controls (i.e., having user accounts with passwords and restricting access to electronic data to individuals who reasonably need it); 2) encryption of data when it travels across public networks or resides on portable devices; 3) changing vendor-default passwords; 4) monitoring systems for unauthorized access; and 5) keeping malware detection software reasonably up-to-date.52 The regulations also require employee training and minimum yearly audits of the security measures.53

Clearly, such preparations transcend the act of creating (and posting on the company website) a privacy and security policy intended to assure customers that “only the highest grade of encryption is used” and “we never share your data with anyone,” etc. WISP-like plans may deal with certain very basic security threats at the time the plan is drafted and, for some organizations, eliminating such already well-known weaknesses can be a huge leap in itself. A WISP might have prevented the real-life FTC enforcement actions against companies for storing data for longer than necessary, failing to encrypt data,54 and failing to have proper access controls.55

However, a company can comply with WISP regulations and still fall short of true preparation. Little in Massachusetts’ WISP regulation suggests a process by which VTech could have identified and known about the SQL-injection attack that compromised its systems, even though such attacks have been a known weakness for over a decade. Yet, basic security errors such as these drive the security community crazy and severely damage a company’s reputation. Such errors can also bring down FTC enforcement action: At least one case has been brought by FTC for a company’s failure to provide protection from known security threats (SQL injection) in code libraries.56 However current VTech’s systems might have been at the time they were created, they failed to acknowledge or adapt to changing cyber-threats. Writing about the VTech breach, Troy Hunt said: “There’s a sense of systems from a bygone era...you get the distinct sense that VTech’s [IT] assets were created a long time ago and then just...left there.”57

Security by Design
What is important to an organization is not necessarily what is on the plan today, but whether it can continuously identify and mitigate new types of risks and react to new legal standards. Most organizations have a mixture of technologies and data systems to secure, so effective cybersecurity needs to account for a range of issues, from operations, configuration, and maintenance of third-party products, to patching open-source code libraries embedded in custom software, to securely designing new custom software capabilities. Optimally, cybersecurity is integrated into the design phase of a data system or technology and serves as an opportunity to introduce security and privacy by design, as well as good data ethics.

Achieving security by design means involving business units and legal counsel at important checkpoints during conversations about system architecture. Such checkpoints have traditionally not been part of a development team’s process, but are increasingly necessary to combat today’s cybersecurity risk. To assist in the development of cross-functional process teams, the National Institute of Science and Technology (NIST) has constructed a cybersecurity framework that aims to help an organization “align its cybersecurity activities with its business requirements, risk tolerances, and resources.”58 The framework is meant to be applicable to a wide range of sectors and is intended to be used by an organization to create (or enhance) its individualized processes adapted from sector-specific guidelines. For organizations just starting to grapple with cybersecurity compliance processes, the NIST framework can be used as a template for creating a new, adaptive cybersecurity process.

Business units need to be involved to help ensure that the data being collected is reasonably related to the objective of the product or service in the marketplace. An organization needs to know why it is gathering each piece of information it collects; who it is gathering the information from; where it is stored (e.g., locally on the device or in the cloud); what it is to be used for in both the short and long term; how long the organization needs to retain it; and with what entities the company shares the data. Doing this effectively requires a dialogue between IT, business units, and legal counsel, and likely involves senior management and board oversight to frame these questions in the context of current and future business goals.

Left to their own devices to design a data model for a new system, data architects naturally gravitate toward systems that maximally interrelate data with the least redundancy, a design principle called “normalization.” Loosely speaking, the goal is a system in which any given data entity can be related to any other.59 Like many companies would have done, VTech designed a normalized data structure that easily cross-linked children, parents, and other collected data and metadata. When a hacker was able to compromise VTech’s relational database with a SQL injection attack, VTech’s databases yielded its secrets in all their clear, optimized, and interrelated glory.60 This allowed the hacker to see the complete picture of familial relationships and attributes with very little effort.

This data model efficiently served the purposes of VTech’s IT department, but was independent of any tangible business objective and almost certainly did not factor in the very real legal and reputational risk of compromising the privacy and security of children. Had a reasonable cybersecurity process been followed, a conversation with the legal department might have quickly revealed the requirements of COPPA. Stakeholders with other perspectives might have inquired whether videos and chat logs needed to be stored “in the cloud” rather than remaining on the local device. This single decision transformed the company’s risk dramatically — from little or no liability stemming from a single individual losing their personal device to massive liability for compromising the privacy and security of millions of children and adults.

Following a rational process to link business objectives and risks to data system design has a related benefit to consumer privacy and the organization’s cyber-risk: It naturally steers the organization toward the “principle of least data.”61 Lacking any outside direction, IT sometimes takes the perspective that almost any data that can be gathered should be — an extension of Parkinson’s Law: “Data expands to fill the available storage space.” This happens because IT, lacking knowledge of a long-term strategy for a product line, over-gathers data “just in case.” This natural IT instinct has been further exacerbated in recent years by low-cost, scalable data storage and the rise of big data analytics, which promises to transform massive, loosely related, and often unstructured data-sets into business intelligence using predictive algorithms to see unanticipated relationships between data.62

Every piece of data collected carries a burden and a responsibility. For example, many companies take the unreflective, default stance of building a customer login profile and storing all the customer’s card and personal data for even the simplest one-time transaction. Since PCI standards dictate that stored credit card information (such as card numbers, expiration dates, and CVV codes) be encrypted, storing it carries some risk.63 A company can identify the business drivers behind storing credit card data by asking relevant questions, such as: Does the business need the card number for a single charge? Is it offering a service that has recurring monthly charges of the same amount? Is it storing the data for convenience to the customer in returning to the online store? Is this a convenience that the customer actually wants, or does it deter some customers? Is the business storing the data to preserve information for accounting or auditing purposes? Does the business value of storing all this information exceed the risk if the systems are compromised? A process that identifies and prioritizes business objectives and risks, the applicable legal frameworks, and applies those metrics to each unit of data being stored has a much better chance of reducing the risk of a cyber-breach.

New Risks: The Internet of Things
Concern for the security and privacy of user information is no longer confined just to what users deliberately share with companies over websites or in the course of purchase transactions. New forms of data, collected from new kinds of devices, have dramatically altered the landscape in recent years. Loosely categorized as the “internet of things,” or “IoT,” devices are as far-ranging as smart thermostats for adaptively controlling home climate control systems, internet-accessible door locks, fitness bracelets that track vital statistics over time and provide health assessments, pacemakers that can be remotely configured, and connected automobiles. To perform their functions, these devices gather, store, and transmit vast quantities of passive data that is capable of exposing sensitive facts about users such as health status (e.g., high blood pressure, pregnancy), location, and habits. In some cases, this information is actively biometric (e.g., fingerprints, facial recognition, retinal pattern) or quasi-biometric (e.g., resting heart rate; breathing patterns; walking speed and cadence; even the force, pattern, and speed of a swipe motion on a touch device). A compromise of biometric data carries with it a new level of risk, since biometric data is — unlike passwords — generally immutable; once lost, a fingerprint is lost forever and can no longer be reliably used as an access control mechanism for devices.

Companies are being called upon with increasing insistence to treat this data responsibly. In January 2015, the FTC issued a IoT privacy and security report.64 The report reiterated the agency’s position that reasonable security should be incorporated into IoT devices, even while acknowledging that the principle of least data (data minimization) may be difficult to apply in devices that use machine learning algorithms to make predictions from large quantities of passively gathered historical data.65 Industry groups like the Biometrics Institute have formed to encourage responsible use of biometric data by vendors who incorporate active or quasi-biometric capabilities into their products. The group has released its biometrics privacy guidelines to offer best practices to organizations for protecting biometric data and complying with regulatory principles.66

Good Cybersecurity is Good Business
Cyber-breaches cost companies worldwide an average of $3.8 million per incident in direct losses.67 The associated reputational risk may be far worse than the direct costs, if the reaction of parents and security personnel to the VTech hack are any indicator. Around 44 percent of consumers claim that it is impossible for a company to win back their confidence once it has lost their personal data.68 That may be why cybersecurity is the top concern of 70 percent of public company directors according to a recent survey.69

Providing potential customers with good security and privacy can have an indirect benefit on the bottom line. Most people have had the experience of changing their minds about buying a product because something in the check-out process made them feel uneasy about the transaction. In fact, surveys show that approximately 17 percent of online transactions are abandoned during check-out due to concerns about payment security.70 Increasingly, an effective arrow in a company’s marketing quiver is its ability to communicate respect for customer data and good data privacy ethics. When the company openly and accurately (not falsely) describes its cybersecurity philosophy and measures, and shows the consumer a professional approach, its ability to close the sale can only improve.

An effective process advances an organization’s ability to work with outside partners. Cybersecurity insurance carriers, for instance, have become increasingly rigorous and sophisticated with their requirements; to be insurable at a cost-effective rate (or at all), companies are being asked to provide detailed information about their cyber-risk management programs. Insurers are also creating coverage exclusions for risky behaviors. In addition, working with third parties as a service provider, or even becoming party to a merger, acquisition, or joint venture becomes much easier with an effective cybersecurity process. Practically every good business transaction agreement today has substantial cybersecurity-related representations and diligence requirements. This issue is often overlooked by companies until the deal gets tanked because one side realizes during its diligence that the other side is clueless about cybersecurity and exposes them to massive risk. This outcome is a real tragedy in an age when a majority of new startup companies’ exit strategy hinges on being acquired by a larger entity.

Conclusion
The technological and regulatory landscape is complex and difficult to navigate with a number of players, standards, and objectives that are sometimes in tension with one another. The only way to keep up with it is not to form a static policy, but a dynamic process that is capable of adapting to rapidly changing technology and incorporating ongoing changes in guidance. The days are rapidly coming to a close, if not gone already, when reasonable practice does not include security by design development models and a proactive process for seeking out and combatting ongoing cyber-threats. In this new environment, legal counsel should strive to work with organizations proactively as an integrated part of the process team, rather than merely after a breach occurs.


1 VTech, FAQ About Cyber Attack on VTech Learning Lodge, https://www.vtech.com/en/press_release/2016/faq-about-cyber-attack-on-vtech-learning-lodge/.

2 Senator Ed Markey, Press Release, Sen. Markey & Rep. Barton to VTech: How Do You Protect Children’s Information? (Dec. 2, 2015), available at http://www.markey.senate.gov/news/press-releases/sen-markey-and-rep-barton-to-vtech-how-do-you-protect-childrens-information.

3 VTech, Corporate Profile, https://www.vtech.com/en/about-us/; Vtech, FAQ About Cyber Attack on VTech Learning Lodge.

4 Troy Hunt, When Children Are Breached — Inside the Massive VTech Hack (Nov. 28, 2015), http://www.troyhunt.com/2015/11/when-children-are-breached-inside.html.

5 Lorenzo Franceschi-Bicchierai, Hacker Obtained Children’s Headshots and Chatlogs From Toymaker VTech, Motherboard (Nov. 30, 2015), http://motherboard.vice.com/en_us/read/hacker-obtained-childrens-headshots-and-chatlogs-from-toymaker-vtech.


6 Id.

7 Id.

8 See note 4.

9 Id.

10 See, e.g., Christoph Wille, Storing Passwords — Done Right!, AspHeute.com (Jan. 5, 2004), http://www.aspheute.com/english/20040105.asp. However, salted passwords have been in use in UNIX systems since the 1970s.

11 See note 4.

12 15 U.S.C. §45.

13 Id.

14 See, e.g., Petco Animal Supplies, No. 032-3221 (F.T.C. May 5, 2005).

15 See, e.g., FTC v. Neovi, Inc., 604 F.3d 1150, 1156 (9th Cir. 2010).

16 See id.; see also 15 U.S.C. §45(n).

17 See, e.g., Guess?, Inc., No. 022-3260 (F.T.C. Aug. 5, 2003).

18 See Federal Trade Commission, Data Security, https://www.ftc.gov/datasecurity.

19 Terrell McSweeny, Comm’r of the Fed. Trade Comm’n, Address at Cybersecurity for a New America 2016 Conference (Mar. 9, 2016).

20 Id.

21 Id.

22 47 U.S.C. §222.

23 Fed. Communications Comm’n, News Release, Chairman Wheeler’s Proposal to Give Broadband Consumers Increased Choice, Transparency & Security with Respect to Their Data (Mar. 10, 2016), available at http://transition.fcc.gov/Daily_Releases/Daily_Business/2016/db0310/DOC-338159A1.pdf.

24 See, e.g., System Safeguards Testing Requirements for Derivatives Clearing Organizations, 80 Fed. Reg. 80113 (Dec. 23, 2015) (to be codified at 17 C.F.R. pt. 39); System Safeguards Testing Requirements, 80 Fed. Reg. 80139 (Dec. 23, 2015) (to be codified at 17 C.F.R. pts. 37, 38, 49).

25 System Safeguards Testing Requirements for Derivatives Clearing Organizations, 80 Fed. Reg. at 80137.

26 See In the Matter of Dwolla, Inc., No. 2016-CFPB-0007 (C.F.P.B. Mar. 2, 2016), available at http://files.consumerfinance.gov/f/201603_cfpb_consent-order-dwolla-inc.pdf.

27 Id. at ¶20 and 27.

28 Id. at ¶27.

29 Id. at ¶52.c.x.

30 See National Conference of State Legislatures, Security Breach Notification Laws, http://www.ncsl.org/research/telecommunications-and-information-technology/security-breach-notification-laws.aspx.

31 Id.

32 Fla. Stat. §501.171(1)(g).

33 Fla. Stat. §501.171(3)(a).

34 Fla. Stat. §501.171(3)(c).

35 Fla. Stat. §501.171(9).

36 See, e.g., Fla. Stat. §501.171(1)(g).

37 State of Tennessee, SB 2005, 2016 Tenn. Pub. Chap. No. 692 §2, available at http://share.tn.gov/sos/acts/109/pub/pc0692.pdf.

38 Fla. Stat. §501.171(2).

39 Conn. Gen. Stat. §42-471 (2015).

40 See Divonne Smoyer and Aaron Lancaster, State AGs: The Most Important Regulators in the U.S.?, The Privacy Advisor (Nov. 26, 2013), https://iapp.org/news/a/state-ags-the-most-important-regulators-in-the-us/.

41 See Divonne Smoyer and Christine Czuprynski, Q&A: Connecticut AG Talks Privacy Enforcement, Collaboration with the FTC, The Privacy Advisor (Aug. 26, 2014), https://iapp.org/news/a/qa-connecticut-ag-talks-privacy-enforcement-collaboration-with-the-ftc/.

42 Cal. Dept. of Justice, California Data Breach Report 2012-2015 (Feb. 2016).

43 Id. at v. (emphasis added); Cal. Civ. Code §1798.81.5(b).

44 5 U.S.C. §6501.

45 20 U.S.C. §1232g.

46 See Graphite, District Privacy Evaluation Initiative, https://www.graphite.org/privacy/; U.S. Dept. of Education, Protecting Student Privacy While Using Online Educational Services: Model Terms of Service (Jan. 2015), available at http://ptac.ed.gov/sites/default/files/TOS_Guidance_Jan%202015_0.pdf.

47 European Union, General Data Protection Regulation (Apr. 27, 2016), available at http://data.consilium.europa.eu/doc/document/PE-17-2016-INIT/en/pdf.

48 114th Congress, Cybersecurity Information Sharing Act of 2015 — S.754 (2015), available at https://www.congress.gov/bill/114th-congress/senate-bill/754/text.

49 Id. at §106.

50 See note 4.

51 Mass. Gen. Laws Ch. 93H §3; 201 C.M.R. 17, available at http://www.mass.gov/ocabr/docs/idtheft/201cmr1700reg.pdf.

52 See 201 C.M.R. 17.04.

53 See 201 C.M.R. 17.03.

54 See, e.g., BJ’s Wholesale Club, No. 052-3069 (F.T.C. Sept. 22, 2010).

55 See, e.g., ChoicePoint, Inc., No. 052-3069 (F.T.C. Sept. 22, 2010).

56 See, e.g., Cardsystems Solutions, Inc., No. 052-3148 (F.T.C. Sept. 8, 2006).

57 See note 4.

58 Nat’l Inst. of Standards and Tech., Framework for Improving Critical Infrastructure Cybersecurity: Version 1.0 at 1 (Feb. 12, 2014), available at http://www.nist.gov/cyberframework/upload/cybersecurity-framework-021214.pdf.

59 See Scott Wambler, Introduction to Data Normalization: A Database “Best” Practice, AgileData.org, http://agiledata.org/essays/dataNormalization.html.

60 See note 4.

61 See, e.g., Mark Ninnikhoven, The Principle of Least Data, LinkedIn (Nov. 29, 2015), https://www.linkedin.com/pulse/principle-least-data-mark-nunnikhoven.

62 See generally, Stephen Baker, The Numerati 12-15 (2008).

63 See PCI Security Standards Council, PCI DSS Quick Reference Guide 14-15 (May 2015), available at https://www.pcisecuritystandards.org/documents/PCIDSS_QRGv3_1.pdf.

64 FTC Staff Report, Internet of Things: Privacy & Security in a Connected World (Jan. 2015), available at http://www.ftc.gov/system/files/documents/reports/federal-trade-commission-staff-report-november-2013-workshop-entitled-internet-things-privacy/150127iotrpt.pdf.

65 Id. at 20-21.

66 Biometrics Institute, Media Release: Biometrics Institute Publishes Revised Version of Its Biometrics Privacy Guidelines (Feb. 2, 2016), available at http://www.biometricsinstitute.org/news.php/190/media-release-biometrics-institute-publishes-revised-version-of-its-biometrics-privacy-guidelines.

67 IBM, Ponemon Institute, 2015 Cost of Data Breach Study, http://www-03.ibm.com/security/data-breach/.

68 Daniel Humphries, Survey: Consumer Confidence in the Security-Breach Era (June 11, 2014), http://intelligent-defense.softwareadvice.com/consumer-confidence-security-breach-era-0614/.

69 EisnerAmper, Concerns About Risks Confronting Boards: Sixth Board of Directors Survey 5 (2016), http://www.eisneramper.com/uploadedFiles/Resource_Center/PDF/2015-2016%20Concerns.pdf.

70 David Moth, Nine Case Studies and Infographics on Cart Abandonment and Email Retargeting, Econsultancy, (Sept. 25, 2013), https://econsultancy.com/blog/63466-nine-case-studies-and-infographics-on-cart-abandonment-and-email-retargeting/.


Kevin L. Miller is a shareholder at Labyrinth Law PLLC, where he is an intellectual property, patent, and technology law attorney. His practice focuses on cybersecurity, privacy, and other legal issues arising from cutting-edge technologies. Before becoming an attorney, he was a software engineer and architect for several major technology companies and an adjunct professor of computer science. He is the author of several articles on cybersecurity and privacy issues and a book on software development design techniques. He is currently a member of The Florida Bar Committee on Technology.

[Revised: 08-25-2016]