United States: The Cybersecurity Race: Executive Branch Takes The Lead While Congress Watches From The Bleachers

The federal government sector has been abuzz lately with whispers and shouts about pending cybersecurity regulations, frameworks, and requirements. This attention is not particularly surprising, especially given the recent high-profile data breaches, the litigation threats surrounding those breaches, the recent identification of the encryption-disabling, consumer data threatening "Heartbleed SSL" OpenSSL vulnerability, and recent reports that the September 2013 cyber-incursion into the U.S. Navy's Intranet network could have been prevented with the proper security contracting mechanism.  Notably, however, while these stories – and the resultant damages that these stories' topics leave in their wake – remain in the headlines, Congress has yet to act (and according to Senator Evan Bayh (D-IN), will likely not be acting anytime soon). By contrast, the Executive branch, and especially the FTC, is in a full-on sprint and tackling cybersecurity wherever it can be found.

Speaking in New York at the American Bar Association Section of International Law 2014 Spring Meeting, Senator Bayh indicated his belief that comprehensive cybersecurity legislation will not be coming out of the 113th Congress.  Hovering between prophecy and promise, Senator Bayh stated that only upon a detrimental cyber-attack "that significantly harms the country," would he suspect effective cyber-legislation to be passed.  For a myriad of reasons let us hope that doesn't happen because, aside from the harm an attack will cause, Senator Bayh also warned that legislation in the wake of an attack would likely result in "mandatory standards that will make what's been proposed, at least right now, pale in comparison. Because we always way overreact once we've been attacked, and both sides need to get that in their minds, because that's what is coming,"

Meanwhile, while Congress waits and opines, industry should be aware that the Executive branch is on the offensive. Here is a summary of some of the most current events:

  • On January 23, 2014, the General Services Administration ("GSA") and the U.S. Department of Defense ("DOD") published the Final Report of the Joint Working Group on Improving Cybersecurity and Resilience through Acquisition. The report proposed six overarching changes be made to the U.S. acquisition strategies to imbue cybersecurity concerns into all stages of federal purchasing.  While still only recommendations, federal contractors should take note that many of these recommendations may find their way into new contracts, options, and renewals.  Most notably:
  1. Instituting baseline cybersecurity requirements as a condition of contract award;
  2. Requiring government contractors to receive training about the acquisition cybersecurity requirements of the organization's government contracts;
  3. Developing Common Cybersecurity Definitions for Federal Acquisitions that would be included in the Federal Acquisition Regulations;
  4. Creating a government-wide hierarchy of cyber-risk criticality for acquisitions;
  5. Assuring secure supply chains and authentic parts (which, unsurprisingly, overlaps with proposed DOD rules at DFARS 252.246-7007, addressing risks in supply chain management);
  6. Integrating security standards into acquisition planning and contract administration.
  • On February 12, 2014, the National Institute of Standards and Technology ("NIST"), in coordination with industry, issued its "Framework for Improving Critical Infrastructure, Version 1.0."  The framework is rudimentary and limited in scope to addresses, for now, physical or virtual "critical infrastructure" of the United States whose loss would pose a "debilitating impact on security, national economic security, national public health or safety, or any combination thereof." As a basic framework for cybersecurity, Version 1.0 is flexible and provides standard questions that may be answered with flexible tools while not prescribing what to do or what tools to buy.  Adoption of the framework is encouraged but remains voluntary. However, advocates of the framework suggest that future participation may be incentivized by federal programs and grants, that the framework itself may become the de facto standard for private sector cybersecurity in data breach litigation, and that it may form the outline or basis for future legislation.
  • The Securities and Exchange Commission ("SEC") recently held a cybersecurity roundtable on March 26, 2014 to address cybersecurity issues and its existing cybersecurity guidance.  While there are currently no detailed regulations enacted, the SEC did issue cybersecurity guidance in October 2011. Based on the premise that securities laws are designed to elicit disclosure of timely, comprehensive and accurate information about risks and events that a reasonable investor would consider important to an investment decision, the guidance proposes that significant cybersecurity issues should be disclosed as risk factors under Regulation S-K. During the March 26 event, SEC Commissioner Luis Aguilar stated his continuing commitment to address cybersecurity risks and hinted at expanding the SEC's non-rule, non-regulation, non-statement guidance "to ensure the proper functioning of the capital markets and the protection of investors." While it is unclear what measures the SEC may take to address cybersecurity and data breaches, it is clearly an area that publicly traded companies should monitor and be prepared for, particularly where increased risks continue to proliferate in the media.
  • Finally, the Federal Trade Commission ("FTC") recently tackled cybersecurity on two fronts, first by allaying concerns companies may have when sharing cybersecurity information and, second, by addressing the competitive impact of failing to abide by cybersecurity standards in enforcement actions.
  1. On April 10, 2014, the FTC and the Department of Justice issued a joint policy statement clarifying that the sharing of properly designed cyber threat information will likely not raise antitrust concerns. The agencies recognized that the sharing of cyber threat information has the potential to improve the security of information systems and emphasized that the legitimate sharing of cyber threat information can be viewed different than the sharing of competitively sensitive information such as current or future prices and output or business plans that may trigger antitrust concerns. Differentiating the two types of data, the guidance noted that the non-antitrust triggering cyber threat information would likely be technical and limited in nature and unlikely to raise competitive concerns.  The guidance can be found here.
  2. In enforcement actions, the FTC addressed cybersecurity issues when it settled charges against two companies that reportedly misrepresented the security of their mobile applications and failed to protect the transmission of the sensitive personal information of consumers.  In a March 28, 2014 statement, the FTC noted that its decision reflects concern that many companies, like those cited, "have failed to properly implement SSL encryption" on their mobile apps and that the decision should serve as a warning to "remind app developers of the need to make data security central to how they design their apps." Notably, one primary issue behind the FTC's decision was one of the company's lack of "a clearly publicized and effective channel for receiving security vulnerability reports." And, in case there is any question as to whether the FTC has the authority to act against companies with allegedly faulty cybersecurity practices, one need look no further than an April 8, 2014 opinion from the U.S. District Court in the District of New Jersey, available here.  While stopping short of granting the FTC expansive cybersecurity policing power, the decision (and all the recent FTC actions related to cybersecurity) may stoke investigations, and even private law suits, related to so-called "deceptive" trade practices.

The key takeaway here is that companies should be wary of cybersecurity issues from every possible angle. Policy and compliance monitoring should take place anywhere cybersecurity or computer security is an issue. In terms of data breaches, while many states –such as California – may have comprehensive breach notification laws, companies should take note that even in the absence of a federal statute, the hodgepodge of general policies in place at a number of agencies allow for federal enforcement. The bottom line is that it is not just the hackers for which you need to remain vigilant, it is also the regulators – and there are an awful lot of them looking to make cybersecurity more "secure."  Whether you are a federal contractor, a public company, or a small-time app developer, make sure your compliance plan properly accounts for cybersecurity. Do not be lulled into complacency by a less-than energized Congress.  For once, Congressional gridlock may be a good thing, as noted by Senator Bayh. Cybersecurity is too fast, too complicated, and too dynamic for the legislature to effectively tackle the issue responsibly.  However, cybersecurity issues remain a focus of the federal government and the Executive Branch will continue to take the lead as terms such as "OpenSSL" and "Stack Overflow" become a part of the news cycle and our daily conversation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
29 Nov 2017, Webinar, Los Angeles, United States

This webinar will cover issues that California employers must face when managing a remote workforce of employees who “telecommute” for work. Due to the growing number of employees that work from home, California employers must know how to manage this new remote workforce in order to offer competitive career opportunities for a new generation of employees, while also being careful not to violate the complex California employment laws that govern these work arrangements.

30 Nov 2017, Conference, Brussels, Belgium

The European Competition and Regulatory Law Review (CoRe), the Computer and Communications Industry Association (CCIA) and the Vrije Universiteit Brussel (VUB) are delighted to invite you to our joint conference discussing some of today’s most frequently asked questions: Does competition law enforcement require an update for online markets?

4 Dec 2017, Conference, Virginia, United States

The Government Contract Management Symposium (GCMS) is held annually by the National Contract Management Association (NCMA) in the Washington, DC metro area. Formerly intended for those in federal sector, it has grown to provide training for professionals in both government and industry contracting.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.