California has long had some of the toughest data breach notification laws in the country and, in 2018, attorney general Xavier Becerra announced a new law to address certain limitations of the original SB 1368 bill that went into force in July 2003.
The new legislation expands on existing laws to add requirements for organizations to notify their customers if their passports, ID numbers, or biometric data are stolen. It aims to close various loopholes in current legislation, and was partly enacted in response to enormous data breaches such as the Marriot hotel chain breach, in which 383 million records were stolen.
It shouldn’t come as any surprise that businesses in California are facing constant threats from hackers and other malicious actors. Being home to Silicon Valley, the state has long been a leader in information security legislation. Many states have followed a similar model, but for organizations based in or with branches in California, the new laws place very specific requirements on data breach notification.
The primary measures companies need to take is to report data breaches within 72 hours of them being identified, verify that personally identifiable information (PII) was adequately encrypted at the time, and provide detailed reports for legal and auditing proceedings. Although the introduction of the law was greeted with some hostility, particularly by technology companies, it will come into effect at the end of 2020.
What else does the new law stipulate?
The consumer-focused law aims to make it harder for hackers to get their hands on private data while also forcing organizations to be more transparent about how they collect data and what they do with it. To that end, businesses must disclose precisely which information they will collect and specify why they need it and what they intend to do with it.
If a business wishes to send the data to third parties, they’re also legally obligated to specify who those third parties are. Furthermore, businesses will have to allow their customers to opt out of their data being sold to third parties, and they cannot retaliate by changing the pricing or level of service. They can, however, offer financial incentives to collect data.
In many ways, the new data-protection laws mirror those of the General Data Protection Regulation (GDPR), which was introduced in the European Union last year, and enforces strict practices on the collection and use of data. While many businesses struggle to overcome compliance challenges, it’s more important than ever to stay a step ahead.
Information privacy and security are now some of the biggest concerns of modern times, so it’s only to be expected that the introduction of legislation such as SB 1368 will soon be mirrored across other states and countries. As cyberthreats continue to evolve, compliance is only going to get harder, hence the need for a more proactive approach.
Why your business needs a compliance strategy
Overcoming compliance hurdles isn’t easy, but it does help protect both your customers’ data and, consequently, your brand’s reputation. By adopting a culture of continuous improvement with regular security and compliance audits, your business will be better placed to stay ahead of both cyberthreats and legislative changes alike.
It’s essential to have a compliance strategy; a clearly defined process that incorporates crucial factors like ongoing security awareness training, compliance auditing, and multiple layers of protection. Above all, it requires a culture change; one in which information security and privacy are considered business advantages rather than just a necessary evil.
Valley Techlogic provides network security services and compliance advice to organizations in Winton, Merced, and Atwater. Call us today for immediate support.