In today’s digital economy it is relatively impossible for an enterprise to conduct business without collecting, holding or storing personally identifying information names and addresses, Social Security numbers, credit card numbers or other account numbers of customers, employees, business partners, students or patients. Moreover, given recent cyber attacks against Sony, LinkedIn Corp., eHarmony Inc., Last.fm and Wydnam Hotels, it seems that such attacks are on the rise. While there is relatively little an attorney can do to thwart the malicious keystrokes of a hacker, she can take steps to ensure her clients are prepared to react to an attack. There are a number of state and federal regulations that mandate that certain steps be taken both before and after a data breach, and failing to comply with these requirements could result in substantial liability, as well as a public relations nightmare. A recent lawsuit filed in the U.S. District Court for the Northern District of California raises questions as to whether mere compliance with California’s privacy laws will act to insulate businesses from liability in the event of a breach.
Effective on July 1, 2004, the California Online Privacy Protection Act of 2003 (California Business and Profession Code §22575 et seq.) requires each owner of a commercial website or online service to conspicuously post its privacy policy on its website if it collects personally identifiable information through the Internet about individual consumers residing in California who use or visit its website or online service. As to online services, the policy must be made available by reasonably accessible means for consumers of the online service.
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