Mandatory Data Breach Notification (2017 Amendment to Privacy Act)

Today I had the pleasure to speak to Meredith Griffiths, reporter of the ABC, on the newly enacted Mandatory Data Breach Notification (MDBN) that take effect on Feburary 28, 2018.

Some of the main points I made in the interview with the help of my colleagues at the Australian Privacy Foundation (primarily David Vaile) were:

MDBN doesn't go far enough because:

  1. small business, <$3m annual turnover are exempt from MDBN
  2. self-assessment of "serious harm" is ambiguous (on what test to companies come forward? and only if PC agrees it is serious? what if slightly serious on one view, and very serious on another- do companies take the easy way out and not disclose?)
  3. companies are given 30 days to make a data breach notification to the privacy commissioner (too long for customers to be kept in the dark and thereafter how long might it take the Privacy Commissioner to determine 'seriousness' and/or publicly response with an unenforceable determination)
  4. what about data breaches offshore (how do Aussies respond to loss of their PI abroad)?
  5. what about 'open data' re-identification thru AI/machine learning?
  6. OAIC is overloaded, slow, determinations are also unenforceable and very rare.

So where does this really leave us? We have a law that neither prevents breaches of personal information nor compensate individuals for privacy breaches. What we need to do is consider the outcomes of the ALRC from 2008 that stipulated we need a tort on the serious invasion of privacy so that individuals CAN sue other individuals (like hackers), or companies (like Google) or government agencies for breaches in their privacy (whether accidental or deliberate or through some form of negligence).

The lack of auditability of the new law means that current practices that rely on de-identification to safeguard people's personal information, say in the case of OPENGOV data initiatives, may not be enough down the track as the threat of increases from machine learning algorithms that can look at patterns of information and highlight individuals like finding a needle in a haystack. The issues of going down this path are grave- including the potential for re-identification and bringing several disaparate treasure troves together like social media data, and government data, and personal records together to be analysed.

Links to MDBN include:

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

https://www.oaic.gov.au/privacy-law/privacy-act/notifiable-data-breaches-scheme

https://www.oaic.gov.au/media-and-speeches/news/retailers-check-out-mandatory-data-breach-reporting-obligations-and-prepare-for-2018

Having a statutory tort of serious invasion of privacy (like in the UK and US) or a common law tort (like in New Zealand), allows individuals to sue other entities depending on the severity of the privacy breach. Why is Australia lagging so far behind other advanced digital nations? When will this legislation be amended?

Already, we are seeing large ICT companies set up "shop-fronts" in Australia with NO enforceable penalties to international misdemeanours when it comes to amassing treasure troves of data, and data breaches offshore. How do we hold these companies accountable when they are taking in a lot of business from Australian consumers and yet seem to be let out in the "wild" to do as they please, storing data on the Cloud either in the USA or Ireland. Bruce Schneier called this "data as a toxic asset". As the toxicity rises, we can expect major pollution spills.

For now, at least we can say that the MDBN is a step in the right direction despite that it falls short through exemptions and loopholes. It can have some reputational impact on "data addicts" that don't do the right thing via their subscriber base, but little more. Sadly, large corporations can handle this reputational damage in their "risk appetites". The fines are also "measly" when it comes to government or regulatory action, and so corporate and government entities in particular are left to their own devices here in Australia. While well-meaning, it seems that it is nothing more than a theatrical show- data hosts are still not responsible for bettering their security practices or urgently responding and fixing a breach.

Data is a bit like mental illness. You can't see it. It is not tangible. You cannot put a price on mental health, and you cannot put a price on your personal data. While we can manage damage to property very well, because we can see a scratch on a car, or the loss of inventory, we cannot see data as we see a broken arm.

We already have very weak Privacy Legislation- Australia needs to get serious like Europe (through the General Data Protection Regulation, considered the gold standard) has on the value of personal identifiable information (PII). Both the liberal and labour governments need to listen to the commissioned reports by the Australian Law Reform Commission, and act on the implementation of statutory tort legislation with respect to intrusions of privacy. There is no reason why this has not happened yet.