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Are You Subject to President Obama's New Tech Initiatives?

Throughout this week, President Obama has been previewing various technology policy initiatives.  He plans to discuss the proposals in more detail during next week's State of the Union address.  These initiatives, as explained by the White House, are intended to protect American companies, consumers, and infrastructure from cyber threats, while safeguarding privacy and civil liberties.  

Although the President has proposed several initiatives, here are the two that are most likely to affect your business:

(1) Personal Data Notification and Protection Act
The President has proposed a Federal law that would mandate how companies must respond in the event of a data breach.  The primary provision of the law would require companies to notify customers within 30 days of discovering that their data has been hacked.  This single law would replace the nearly 50 different notification laws currently enacted by the states.  Additionally, this act would empower the Federal Trade Commission to issue penalties to companies that fail to comply.

Under this proposed law, if your business has customers in 50 states and you suffer a data breach, you would only have to follow one set of notification guidelines—the Federal guidelines.  In contrast, you are currently required to comply with the different data notification laws of each of the 50 states.  

(2) Student Digital Privacy Act
Another law proposed by the President is one that would ensure that data collected in the educational context is used only for educational purposes.  For example, the proposed Student Digital Privacy Act would prevent companies from selling student data to third parties for purposes unrelated to the educational mission.  It also would prohibit companies from engaging in targeted advertising to students based on data collected in school.  

If you are a university, a school, or a company that does business with a university or school, you need to be aware of these potential legal changes and begin to plan accordingly.

The Next  Steps
The White House has yet to reveal the full details of these proposed initiatives, and any legislation would require approval from the Congress.  However, with so many corporations having suffered a data breach in the last few years and the general public expressing a growing concern over privacy issues, expect some Federal response to these unnerving attacks.

We will continue to keep you posted on the status of these initiatives.  In the meantime, if you have questions about one of these initiatives or any other emerging technology-related issue, contact a member of MacDonald Illig's Emerging Technologies Practice Group.

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