United States: New Proposed Federal And New York State Cybersecurity And Data Privacy Initiatives

Last year proved to be full of unprecedented challenges to the cybersecurity infrastructure of the U.S. economy. Security breaches at Sony Pictures, Target, Apple, JPMorgan, and Home Depot have featured prominently in the news cycle over the past year and highlighted the many risks faced by public companies and their board members. Indeed, the National Association of Corporate Directors has listed cybersecurity as one of the three critical challenges for public company directors in 2015, and not without good reason. Beyond the reputational harm that these breaches may cause, they inflict significant economic costs. The full costs of a breach often extend long beyond the breach itself, as companies like Target and Sony face class action suits in the aftermath of their attacks.

To combat growing cybersecurity threats, the Obama administration and the New York attorney general have recently presented several legislative proposals. Given the bipartisan support for protecting individuals, companies, and government entities against cyber-attacks, new cybersecurity and data privacy legislation in some form appears to have a good chance of passage. We summarize notable recent initiatives here.

The Obama Administration's Proposed Cybersecurity Legislation

On January 12, in a speech at the Federal Trade Commission in Washington, President Obama outlined the new cybersecurity legislation he will propose. The president noted that nearly every state has a unique data breach notification law, making it confusing and costly for companies to notify customers of data breaches. The president plans to introduce a bill, called the Personal Data Notification & Protection Act, that will create a "single, strong national standard" requiring companies to notify consumers within thirty days of a data breach. The president also said that he would introduce legislation to "close loopholes in the law so we can go after more criminals who steal and sell the identities of Americans - even when they do it overseas."

In conjunction with President Obama's January 12 speech and this week's State of the Union address, the White House released three legislative proposals. One proposal would establish a national standard for data breach notification. Business entities that discover security breaches affecting "sensitive personally identifiable information" would have thirty days to notify customers, barring certain exceptions (for instance, notification would be delayed if it would impede a criminal investigation or damage national security). For large-scale data breaches and breaches involving federal government databases or employees, business entities would be required to notify the Department of Homeland Security (DHS). In turn, the DHS would notify appropriate federal agencies. Notably, as proposed, the bill would preempt the incongruent collection of state data breach notification laws.

The administration released a second legislative proposal intended to encourage the private sector to share cyber-threat information with the DHS's National Cybersecurity and Communications Integration Center (NCCIC). The NCCIC could share such information with relevant federal agencies and private-sector organizations (known as Information Sharing and Analysis Organizations). Companies that voluntarily share threat information would receive protection from civil and criminal actions, and the shared information would be shielded from public disclosure or use as evidence in regulatory enforcement actions. This proposed legislation would also preempt state data laws regarding cyber-threat information sharing.

The third legislative proposal would further empower law enforcement to combat cybercrimes. As the White House described in a press release, the legislation

would allow for the prosecution of the sale of botnets, would criminalize the overseas sale of stolen U.S. financial information like credit card and bank account numbers, would expand federal law enforcement authority to deter the sale of spyware used to stalk or commit ID theft, and would give courts the authority to shut down botnets engaged in distributed denial of service attacks and other criminal activity.

Additionally, this legislation would allow prosecutors to use the Racketeering Influenced and Corrupt Organizations Act, or RICO, to prosecute cybercrimes. The legislation would also update and clarify several provisions of the Computer Fraud and Abuse Act to expand the government's capacity to target cybercriminals.

During his State of the Union address, President Obama said that his administration is "making sure our government integrates intelligence to combat cyber threats" and urged Congress "to finally pass the legislation we need to better meet the evolving threat of cyber-attacks, combat identity theft, and protect our children's information." The White House is expected to push forward on the proposed cybersecurity legislation in the coming months.

N.Y. Attorney General's Bill to Strengthen Data Security and Expand Customer Protection

At the same time President Obama is proposing new and uniform federal cybersecurity standards, New York Attorney General Eric T. Schneiderman recently released a proposal that would "overhaul New York State's data security law and require new and unprecedented safeguards for the personal data of consumers."

The attorney general's proposed bill seeks to:

  • Expand the definition of "private information" to include both the combination of an email address and password, and the combination of an email address and a security question and answer, as well as to include in the definition pertinent medical information.
  • Require entities that collect and/or store private information to have reasonable security measures that include:
    • Administrative safeguards to assess risks, train employees, and maintain safeguards.
    • Technical safeguards to (i) identify risks in their respective network, software, and information processing; (ii) detect, prevent, and respond to attacks; and (iii) regularly test and monitor systems controls and procedures.
    • Physical safeguards, including special disposal procedures, intrusion detection and response measures, and protection of physical areas where information is stored.
    • Certification mechanisms, whereby entities that engage in annual independent third-party audits and certifications that confirm their compliance with New York's reasonable data security requirement receive, during litigation, the benefit of a rebuttable presumption that they have reasonable data security measures.
  • Provide a legislative safe harbor - which may include the elimination of liability altogether-as an incentive for a company that implements a heightened level of data security.
  • Improve data sharing between the government and private companies by providing protections, in the event of a data breach, for a company's voluntary disclosure of internal forensic reports to law enforcement.

The Consumer Privacy Bill of Rights

The Obama administration has also been working to develop a Consumer Privacy Bill of Rights built around a set of core principles. According to details released by the White House, some of these principles include:

  • The right for consumers to decide what personal data companies collect from them and how companies use that data.
  • The right for consumers to know that their personal information collected for one purpose cannot then be misused by a company for a different purpose.
  • The right for consumers to have their information stored securely by companies that are accountable for its use.

The Student Digital Privacy Act

The Obama administration also released details on a proposed Student Digital Privacy Act. According to a White House statement, the legislation "would prevent companies from selling student data to third parties for purposes unrelated to the educational mission and from engaging in targeted advertising to students based on data collected in school."


As we begin this new year, companies and their directors should continue to monitor the progress of proposed cybersecurity and data privacy initiatives. The government's focus on cybersecurity risks underscores the importance of businesses establishing clear protocols to give consumers confidence that their data is appropriately protected. It is also critical that companies develop the tools they need to protect against security threats and control reputational and economic damage should a data breach occur.

The Cybersecurity, Privacy and Data Protection Team

Kramer Levin's Cybersecurity, Privacy and Data Protection practice is an interdisciplinary team of attorneys from the United States and Europe with litigation, regulatory, technology and compliance experience. Our team advises on the most cutting-edge technology and data security issues at every stage, representing clients ranging from entrepreneurial start-up entities to multinational Fortune 100 companies in a variety of sectors. We help clients navigate the rapidly evolving and challenging privacy law landscape by providing practical strategies to identify and manage the legal and reputational risks associated with these emerging and dynamic issues. Many of our attorneys have served in senior positions in government, as prosecutors and trial attorneys, counsel for Congressional committees and as advisors in the development of EU law.

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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions