Commentary Addressing Risks and Opportunities Through the Lifecycle of Data, Technology, Advertising and Innovation

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<img class="alignright wp-image-3935 size-medium" src="http://dataprivacymonitor.bakerhostetlerblogs.com/wp-content/uploads/sites/5/2015/05/Data-Breach_GettyImages_515745835-300x214.jpg" alt="Data Breach_GettyImages_515745835" width="300" height="214" />Editor’s Note: The author is the most recent attorney to join our Privacy and Data Security Team. Paul represents clients in responding to potential data security incidents, counsels on incident response preparedness, and works with clients to develop appropriate policies to ensure compliance with applicable law, industry standards, or self-regulatory guidelines. He also counsels clients on the permissible collection of data and usage in online advertising. Paul received his undergraduate degree from Allegheny College and his law degree from Washington and Lee University School of Law.

Organizations face threats to their data from all fronts, from sophisticated external attacks by hackers to employee error (as the 2015 BakerHostetler <a href="https://www.dataprivacymonitor.com/incident-response/bakerhostetlers-first-data-security-incident-response-report-shows-human-error-is-most-often-to-blame/">Incident Response Report</a> showed). Recognizing the prevalence of these incidents, the Department of Justice (DOJ) recently issued a guidance document intended to help organizations prepare for a data security incident. The document, titled <a href="http://www.justice.gov/sites/default/files/opa/speeches/attachments/2015/04/29/criminal_division_guidance_on_best_practices_for_victim_response_and_reporting_cyber_incidents2.pdf">“Best Practices for Victim Response and Reporting of Cyber Incidents,”</a> is derived from the DOJ’s experiences investigating and prosecuting cybercriminals. The Guidelines focus primarily on the proactive and reactive measures a company may take with a data breach. First, the Guidelines provide detailed suggested best practices for data breach incident preparation, which are summarized as follows:

Steps to Take Before a Cyberattack

Identify Your “Crown Jewels”: The Guidelines suggest that, as an initial step, an organization needs to assess which of its data, assets, and services warrants the most protection. For some organizations intellectual property is their lifeblood, while others may see their business devastated if they cannot guarantee the security and integrity of consumer data. The Guidelines point to the Cybersecurity Framework produced by the National Institute of Standards and Technology (NIST) as an excellent guide for risk management planning and policies.

Have an Actionable Plan in Place Before an Intrusion Occurs: The DOJ determined that companies should have an incident response plan in place before an intrusion occurs to ensure that the focus is on containing the intrusion, mitigating the harm, and collecting and preserving information necessary to determine the potential damage and source of the threat.

Have Appropriate Technology and Services in Place Before an Intrusion Occurs: Organizations should invest in equipment such as off-site backup, intrusion detection tools, data loss prevention technologies, and devices for traffic filtering or scrubbing. In addition, an organization should configure its computer system to log network activity so that a security incident can be detected and recorded.

Have Appropriate Authorization in Place to Permit Network Monitoring: The Guidelines suggest that organizations institute measures to obtain consumer consent to monitor communications, in order to enable the detection of a data security incident and to respond. This can be accomplished through the use of “banners,” computer user agreements, workplace policies, and personnel training.

Ensure Your Legal Counsel Is Familiar with Technology and Cyber Incident Management to Reduce Response Time During an Incident: The DOJ suggests that companies use legal counsel with experience handling data security incidents. The use of experienced counsel ensures that an organization will receive accurate advice from counsel comfortable with addressing the issues that arise in a data breach.

Ensure Organization Policies Align with Your Cyber Incident Response Plan: Organizations may need to make additional efforts to update internal policies to guide IT personnel and limit access to the network to reduce risk.

Engage with Law Enforcement Before an Incident:  The Guidelines suggest establishing a point of contact with law enforcement prior to an incident to facilitate use of law enforcement when a data security incident actually occurs.

Establish Relationships with Cyber Information Sharing Organizations: The Guidelines note that Information Sharing and Analysis Centers (ISACs) and Information Sharing Analysis Organizations (ISAOs) have emerged to analyze cyber threat information shared between and among businesses and government. The DOJ encourages organizations to make use of the information available from these entities.

Incident Response Plan Guidance 

Second, the DOJ’s document provides guidance to organizations on how to respond to a data breach incident and execute an incident response plan. These Guidelines suggest that an organization make an initial assessment of the nature and scope of the incident, including the origin of the intrusion, the presence of any malware, and the identity of other victim organizations, among other things. Next, the Guidelines suggest that an organization implement measures to minimize continuing damages such as rerouting network traffic, blocking a denial of service attack, or isolating all or part of a compromised network. The Guidelines further suggest that an organization record and collect all evidence and information related to the unauthorized access, which may involve imaging the affected computer and retaining all logs and records of the data underlying the incident. Finally, the Guidelines suggest that an organization notify its employees, management, law enforcement (including the Department of Homeland Security), and any potential victims.

The Guidelines also provide pointers on actions to avoid following a data breach, including “hacking back,” and instructs companies to remain vigilant in monitoring and improving their networks and privacy policies even after a data security incident has been resolved.

Impact of the Guidelines

The DOJ Guidelines mirror guidance provided by other authorities such as the Federal Trade Commission, the Securities &amp; Exchange Commission, and state attorneys general. The Guidelines appear aimed at helping companies either avoid cyberattacks or minimize the damage to the organization and consumers should a cyberattack occur. Moreover, it is a further effort by law enforcement to increase cooperation between law enforcement and companies experiencing an incident and to work to reassure companies that the primary interest of law enforcement is identifying the criminals behind the attack. However, it is certainly possible that plaintiffs in class actions or other regulators will rely on the Guidelines as a standard against which to measure a company’s response, for the purpose of showing a deficiency. While the Guidelines, and others like the NIST Computer Security Incident Handling Guide, are not binding regulations, because they are recognizable standards against which a company can be measured, as companies build and enhance their incident response preparations, they should certainly look for ways to incorporate these guidelines into their incident response plan and preparedness efforts.

The DOJ Sets Out to Establish Standard for Data Security Incident Response and Preparation