Mandatory data breach notification law comes into effect today. Now what? It all depends on proper regulation and enforcement

February 22, 2018 |

The Privacy Amendment (Notifiable Data Breaches) Act 2017 commences operation today.  There has been more than a ripple of reporting on what is a significant change to the regulatory landscape, ranging from the nerdy techy journals such as Computerworld, start up daily and InnovationAus to the insurance publications such as insurance and risk  to the general media such as Mumbrella and SBS. The coverage has been general but hits the key points, that in the event of a data breach involving authorised loss or access to personal information organisations and agencies must consider whether they are obliged to notify persons and the Information Commissioner of that breach. There is a hyperventilating report in the Canberra Times which, while good in parts, extrapolutes the law as it now exists with what might conceivably happen without the burden of evidence.  That is little better than crystal ball gazing.  The article seems to be suggesting that the effect of the legislation will be a blizzard of emails to customers and the possibility of “data breach notification fatigue.”  This sort of argument is a riff familiar in parts of America where 48 states have data breach notification laws which has meant that there have been multiple notifications arising from breaches.  To the extent that there is an identifiable fatigue, and what exactly that entails, is very much debatable.  Surveys of Americans have highlighted a high level of concern about the security of personal information (such as the Pew Research’s survey on privacy in September 2016).  Those who assert there is data fatigue are commonly representing businesses or defence lawyers given data breaches can attract class actions in the United States.  It is always a fraught exercise to look to another jurisdiction, with all their cultural and legal distinctions, and predict an identical outcome.

What is clear from the legislation is that organisations will need a step by step analysis of the breach and whether the elements of the scheme have been met to trigger that obligation.  It is far from a straightforward exercise and potentially can be quite complex involving weighing whether there was the likelihood of the risk of serious harm arising from the breach. It is certainly more complex than the reportage to date suggests.

The legislation has the real potential to affect many organisations and make them take a more serious approach to their privacy protections.  It could have a very positive and long lasting impact on data security in Australia.  Or it could end up being a dead letter law, as happens with much privacy protection in Australia at the moment.  As with all regulation the effectiveness has more to do with the effectiveness of the enforcement than what the regulations say.  And that is the rub given the legislation is structured such that the Commissioner must initiate most actions.  If he or she is disinclined to take an assertive role then there is little an individual can do under the Privacy Act.  There are other more complicated options that can be taken for a data breach which causes damage but it is a much more difficult process.  The Commissioner’s office has been more focused on talking than doing.  That could, and should, change.

The Information Commissioner has sent out an alert advising of the scheme’s commencement.  It provides:

The Notifiable Data Breaches scheme comes into force

 

Starting today, Australian Government agencies and organisations required to secure personal information under the Privacy Act 1988 (Privacy Act) have mandatory data breach notification and assessment obligations under the Notifiable Data Breaches (NDB) scheme.

These agencies and organisations must notify individuals affected by a data breach that is likely to result in serious harm.

The NDB scheme formalises a long-held community expectation for transparency when a data breach occurs. It also reinforces the accountability of agencies and organisations for personal information security, encouraging a higher standard of privacy protection across the public and private sector.

Learn more with our recently released resources:

1.       Data breach preparation and response — A guide to managing data breaches in accordance with the Privacy Act 1988 (Cth)

This guide consolidates information provided in our Data breach notification — a guide to handling personal information security breaches released in 2014, the guide to developing a data breach response plan released in 2016, and the resources published to assist entities in complying with the NDB scheme last year.

In doing so, it provides a valuable and convenient resource for staff involved in privacy compliance and data breach response.

2.       Receiving data breach notifications

This resource for the Australian public provides guidance on what to expect when you receive a data breach notification, including how organisations might deliver notifications and when a privacy complaint can be made to our Office.

3.       What to do after a data breach notification

This resource provides a wide range of actions you can take to reduce the risk of experiencing harm after a data breach. For example, it includes tips on combatting the harm that may result from a breach involving financial information, and steps you can take when you believe you may be a victim of identity fraud.

The Information Commissioner’s media release of 19 February 2018 gives a good overview of the structure and operation of the scheme providing:

The Office of the Australian Information Commissioner (OAIC) has released new resources for the Australian public ahead of the commencement of the Notifiable Data Breaches (NDB) scheme on 22 February 2018.

The NDB scheme mandates that Australian Government agencies and the various organisations with obligations to secure personal information under the Privacy Act 1988 (Cth) (Privacy Act) notify individuals affected by data breaches that are likely to result in serious harm.

One of the new resources published by the OAIC, titled Receiving data breach notifications, provides useful guidance on what to expect when you receive a data breach notification, including how organisations might deliver notifications and when a privacy complaint can be made to the OAIC.

The other new resource, What to do after a data breach notification, provides a wide range of actions you can take to reduce the risk of experiencing harm after a data breach.

Among the information provided are tips on combatting the harm that may result from a breach involving financial information or contact information and steps to take when you believe you may be a victim of identity fraud.

The OAIC has worked with consumer groups, not-for-profits, and Australian Government agencies in the development of these resources.

The Australian Information Commissioner, Timothy Pilgrim, said, “the Notifiable Data Breaches scheme formalises a long-standing community expectation to be told when a data breach that is likely to cause serious harm occurs.

“The practical benefit of the scheme is that it gives individuals the chance to reduce their risk of harm, such as by re-securing compromised online accounts. The scheme also has a broader beneficial impact — it reinforces organisations’ accountability for personal information protection and encourages a higher standard of personal information security across the public and private sectors.

“By reinforcing accountability for personal information protection, the NDB scheme supports greater consumer and community trust in data management. This trust is key to realising the potential of data to benefit the community, for example, by informing better policy-making and the development of products and services.”

The 2017 Australian Community Attitudes to Privacy Survey found that 94 per cent of Australians believe they should be told if a business loses their personal information. Ninety-five per cent said they should be told if a government agency loses their personal information.

Organisations are required to notify the Australian Information Commissioner in addition to notifying individuals affected by an ‘eligible data breach’ (a data breach that is likely to result in serious harm). Failures to comply with the NDB scheme can attract fines up to $2.1 million.

The OAIC’s new resources for the Australian public can be read online: www.oaic.gov.au/individuals/data-breach-guidance.  

The OAIC has published a suite of guidance for organisations to assist them in implementing the requirements of the NDB scheme. This guidance can be found at: www.oaic.gov.au/ndb.

Background information

Previous statements from the Office of the Australian Information Commissioner

Mandatory data breach notification: https://www.oaic.gov.au/media-and-speeches/statements/mandatory-data-breach-notification

Enforcement powers of the Office of the Australian Information Commissioner

  • The Privacy Act confers a range of enforcement powers on the Commissioner, including:
    • accept an enforceable undertaking (s 33E)
    • bring proceedings to enforce an enforceable undertaking (s 33F)
    • make a determination (s 52)
    • bring proceedings to enforce a determination (ss 55A and 62)
    • report to the Minister in certain circumstances following a CII, monitoring activity or assessment (ss 30 and 32)
    • seek an injunction including before, during or after an investigation or the exercise of another regulatory power (s 98)
    • apply to the court for a civil penalty order for a breach of a civil penalty provision (s 80W).
  • The ‘civil penalty provisions’ in the Privacy Act include:
    • A serious or repeated interference with privacy (s 13G) – 2000 penalty units (current total is $420,000)
    • The maximum penalty that the court can order for a body corporate is five times the amount listed in the civil penalty provision (current maximum $2.1 million).

 

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