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A definitive guide to cybersecurity law

Expanding on the author's experience as a cybersecurity lawyer and law professor, Cybersecurity Law is the definitive guide to cybersecurity law, with an in-depth analysis of U.S. and international laws that apply to data security, data breaches, sensitive information safeguarding, law enforcement surveillance, cybercriminal combat, privacy, and many other cybersecurity issues. Written in an accessible manner, the book provides real-world examples and case studies to help readers understand the practical applications of the presented material. The book begins by outlining the legal requirements for data security, which synthesizes the Federal Trade Commission's cybersecurity cases in order to provide the background of the FTC's views on data security. The book also examines data security requirements imposed by a growing number of state legislatures and private litigation arising from data breaches. Anti-hacking laws, such as the federal Computer Fraud and Abuse Act, Economic Espionage Act, and the Digital Millennium Copyright Act, and how companies are able to fight cybercriminals while ensuring compliance with the U.S. Constitution and statutes are discussed thoroughly. Featuring an overview of the laws that allow coordination between the public and private sectors as well as the tools that regulators have developed to allow a limited amount of collaboration, this book also:

 Addresses current U.S. and international laws, regulations, and court opinions that define the field of cybersecurity including the security of sensitive information, such as financial data and health information

 Discusses the cybersecurity requirements of the largest U.S. trading partners in Europe, Asia, and Latin America, and specifically addresses how these requirements are similar to (and differ from) those in the U.S.

 Provides a compilation of many of the most important cybersecurity statutes and regulations

 Emphasizes the compliance obligations of companies with in-depth analysis of crucial U.S. and international laws that apply to cybersecurity issues

 Examines government surveillance laws and privacy laws that affect cybersecurity as well as each of the data breach notification laws in 47 states and the District of Columbia

 Includes numerous case studies and examples throughout to aid in classroom use and to help readers better understand the presented material

 Supplemented with a companion website that features in-class discussion questions and timely and recent updates on recent legislative developments as well as information on interesting cases on relevant and significant topics

Cybersecurity Law is appropriate as a textbook for undergraduate and graduate-level courses in cybersecurity, cybersecurity law, cyber operations, management-oriented information technology (IT), and computer science. This book is also an ideal reference for lawyers, IT professionals, government personnel, business managers, IT management personnel, auditors, and cybersecurity insurance providers.

JEFF KOSSEFF is Assistant Professor of Cybersecurity Law at the United States Naval Academy in Annapolis, Maryland. He frequently speaks and writes about cybersecurity and was a journalist covering technology and politics at The Oregonian, a finalist for the Pulitzer Prize, and a recipient of the George Polk Award for national reporting.



Table of Contents

About the Author xv
Acknowledgement xvii

Introduction xix

1 Data Security Laws and Enforcement Actions 1

1.1 FTC Data Security 2

1.1.1 Overview of Section 5 of the FTC Act 2

1.1.2 Wyndham: Does the FTC Have Authority to Regulate Data Security under Section 5 of the FTC Act? 5

1.1.3 LabMD: What Constitutes "Unfairö or "Deceptiveö Data Security? 9

1.1.4 FTC June 2015 Guidance on Data Security 11

1.1.5 FTC Protecting Personal Information Guide 14

1.1.6 Lessons from FTC Cybersecurity Complaints 15

1.1.6.1 Failure to Secure Highly Sensitive Information 16

1.1.6.1.1 Use Industry-Standard Encryption for Sensitive Data 16

1.1.6.1.2 Routine Audits and Penetration Testing Are Expected 17

1.1.6.1.3 Health-Related Data Requires Especially Strong Safeguards 18

1.1.6.1.4 Data Security Protection Extends to Paper Documents 19

1.1.6.1.5 Business-to-Business Providers Also Are Accountable to the FTC

For Security of Sensitive Data 20

1.1.6.1.6 Companies Are Responsible for the Data Security Practices of Their Contractors 22

1.1.6.1.7 Make Sure That Every Employee Receives Regular Data Security Training for Processing Sensitive Data 23

1.1.6.1.8 Privacy Matters, Even in Data Security 23

1.1.6.1.9 Limit the Sensitive Information Provided to Third Parties 24

1.1.6.2 Failure to Secure Payment Card Information 24

1.1.6.2.1 Adhere to Security Claims about Payment Card Data 24

1.1.6.2.2 Always Encrypt Payment Card Data 25

1.1.6.2.3 Payment Card Data Should Be Encrypted Both in Storage and at Rest 26

1.1.6.2.4 In-Store Purchases Pose Significant Cybersecurity Risks 26

1.1.6.2.5 Minimize Duration of Storage of Payment Card Data 28

1.1.6.2.6 Monitor Systems and Networks for Unauthorized Software 29

1.1.6.2.7 Apps Should Never Override Default App Store Security Settings 29

1.1.6.3 Failure to Adhere to Security Claims 30

1.1.6.3.1 Companies Must Address Commonly Known Security Vulnerabilities 30

1.1.6.3.2 Ensure That Security Controls Are Sufficient to Abide by Promises about Security and Privacy 31

1.1.6.3.3 Omissions about Key Security Flaws Also Can Be Misleading 33

1.1.6.3.4 Companies Must Abide by Promises for Security-Related Consent Choices 33

1.1.6.3.5 Companies That Promise Security Must Ensure Adequate Authentication Procedures 34

1.1.6.3.6 Adhere to Promises about Encryption 35

1.2 State Data Breach Notification Laws 36

1.2.1 When Consumer Notifications Are Required 37

1.2.1.1 Definition of Personal Information 37

1.2.1.2 Encrypted Data 38

1.2.1.3 Risk of Harm 39

1.2.1.4 Safe Harbors and Exceptions to Notice Requirement 39

1.2.2 Notice to Individuals 40

1.2.2.1 Timing of Notice 40

1.2.2.2 Form of Notice 40

1.2.2.3 Content of Notice 41

1.2.3 Notice to Regulators and Consumer Reporting Agencies 41

1.2.4 Penalties for Violating State Breach Notification Laws 42

1.3 State Data Security Laws 42

1.3.1 Oregon 43

1.3.2 Rhode Island 45

1.3.3 Nevada 45

1.3.4 Massachusetts 46

1.4 State Data Disposal Laws 49

2 Cybersecurity Litigation 51

2.1 Article III Standing 52

2.1.1 Applicable Supreme Court Rulings on Standing 53

2.1.2 Lower Court Rulings on Standing in Data Breach Cases 57

2.1.2.1 Injury-in-Fact 57

2.1.2.1.1 Broad View of Injury-in-Fact 57

2.1.2.1.2 Narrow View of Injury-in-Fact 60

2.1.2.2 Fairly Traceable 62

2.1.2.3 Redressability 63

2.2 Common Causes of Action Arising from Data Breaches 64

2.2.1 Negligenc