Japan: Data Privacy Or Cybersecurity: Which Is More Important?

Last Updated: 29 October 2018
Article by Scott A. Warren

To any good lawyer, the answer is 'both' are important.  However, most in-house counsel know the answer is which receives the limited available budget.  Compliance budgets usually follow the greatest risks for the company.  Therefore, in Europe, where the EU's General Data Protection Regulation is the scariest new compliance issue, it stands to reason that data privacy will take a larger portion of the budget than cybersecurity.  However, in the US, where the penalties for poor cybersecurity can be huge (from governmental penalties, to class action and shareholder derivative lawsuits), I believe it is generally the opposite. 

What about much of the rest of the world, where the penalties for loss of personal data or for a cyber breach are insubstantial to non-existent?  In many such places, I have seen a much lower budget allotment to either issue.  Indeed, across Asia, some of the very largest companies do not even have an Information Security Officer, or someone else designated as responsible for keeping data, personal or otherwise, protected.  Where there is little investment, it follows that there is little awareness of what is actually happening to the data that a company holds.

This is particularly the case where hackers use Advanced Persistent Threats, which are data breaches designed to penetrate and hide within a corporate network, siphoning off information over a long period. Cybersecurity expert Mandiant released a report in 2015 indicating the global median time from when a hacker has entered a network and the time when the company is aware of the hack, is 205 days.  In Asia, this time between hack and awareness of the hack occurring is 520 days.  With this state of affairs, some technologically advanced companies in Asia are particularly at risk for losing their hi-tech advantage or trade secrets by hackers (or governments) that want to catch up quickly.

I often encourage companies to think about the issue from a broader trade secret perspective.  Think of all the data you want to protect (from employee lists to marketing plans, from intellectual property to acquisition strategy, from customer personal data to big data analysis), and then take steps to protect it.  We all may not be in jurisdictions that equally punish the loss of personal data, but all companies want to protect their competitive advantage from their competitors.  It is especially important to do this analysis in advance, as most countries require companies to show they took reasonable steps to protect their trade secrets in order to be able to make a claim under the law.  In my experience, corporate secrets are items that company management will likely be willing to fund to protect, if they are aware that they are at risk.

No matter what drives the decision to fund, the steps to any good data protection or cybersecurity program are essentially the same:

  • Map out what data you have or intend to collect;
  • Determine what laws apply to that data;
  • Identify what security you have in place to protect it;
  • Prepare a gap analysis of what needs to be addressed;
  • Take steps to bridge those gaps;
  • Test to ensure compliance.

It is especially important to identify what laws apply to the data you have, as increasingly, data privacy and cybersecurity laws are going cross-borders to govern what you do with your data wherever it may sit.  This fundamental shift makes a more-inclusive global legal analysis essential.  The law that apply in the EU, the US, China and Japan all have different standards and important points to follow.  For example, the definition of what is a data breach and when you have to notify individuals and/or the authorities varies significantly.  In the US, a notifiable data breach often requires acquisition of the data (i.e. proof of removal).  In the EU, mere access to the data constitutes a notifiable breach within 72 hours of awareness of the breach, in most instances.  In China, simply discovering security flaws and vulnerabilities in your network products and services requires notification to the government and network users.  In Japan, you are only required to '"make an effort" to notify in the event of a breach.  Many other countries have in effect, or are now passing, laws governing data breach notifications.

Companies need to plan now for what laws would affect them in the event of a data breach.  Data breach issues can be quite traumatic for companies to deal with, in and of themselves.  If you are also trying to sort through, for the first time, what laws apply to the data involved, it is easy to make costly and fineable mistakes.  You can include a synopsis of these laws in your Incident Response Plan, which is your guide as to how to handle data breach situations.

Once an incident response plan is in place, it is important for organizations to undertake data breach drills (aka tabletop exercises) in order to properly prepare.  I had an experience in my corporate days, where a data breach occurred and we quickly assembled our Incident Response Team.  The IT manager first proudly announced that the servers were up and running after only a few hours of down time.  I asked for the servers so that we could study them for what happened.  The IT manager indicated that they had wiped the servers in order to load the data more quickly.  His solution was great from an IT perspective, but not so great from an evidentiary perspective.  Therefore, it is important to test your Incident Response Plan in order to see if you are truly ready.

In the end, does it really matter which, data privacy or cybersecurity, is most important? Aren't data privacy and cybersecurity just two different sides of the same coin: Poor data privacy leads to poor cybersecurity, and vice versa?   The answer is yes.  To prevent this, companies must start the process of identifying and protecting your data, whether it be personal information or corporate secrets.  Then, continue down that path, expanding the process until you have considered all of the risks that could negatively affect your company.

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.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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.

Disclaimer

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.

General

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