State Government Regulation
State governments have attempted to improve cyber-security by increasing public visibility of firms with weak security. In 2003, California passed the Notice of Security Breach Act which requires that any company that maintains personal information of California citizens and has a security breach must disclose the details of the event. Personal information includes name, social security number, driver’s license number, credit card number or financial information. Several other states have followed California’s example and passed similar security breach notification regulations. These security breach notification regulations punish firms for their cyber-security failures while giving them the freedom to choose how to secure their systems. Also, this regulation creates an incentive for companies to voluntarily invest in cyber-security to avoid the potential loss of reputation and the resulting economic loss that can come from a successful cyber-attack.
In 2004, California passed California Assembly Bill 1950 which also applies to businesses that own or maintain personal information for California residents. This regulation dictates that businesses maintain a reasonable level of security and that these required security practices also extend to business partners. This regulation is an improvement on the federal standard because it expands the number of firms required to maintain an acceptable standard of cyber-security. However, like the federal legislation, it requires a “reasonable” level of cyber-security, which leaves much room for interpretation until case law is established.
Read more about this topic: Cyber-security Regulation
Famous quotes containing the words state, government and/or regulation:
“The discovery of Pennsylvania’s coal and iron was the deathblow to Allaire. The works were moved to Pennsylvania so hurriedly that for years pianos and the larger pieces of furniture stood in the deserted houses.”
—For the State of New Jersey, U.S. public relief program (1935-1943)
“In our governments the real power lies in the majority of the community, and the invasion of private rights is chiefly to be apprehended, not from the acts of government contrary to the sense of the constituents, but from the acts in which government is the mere instrument of the majority.”
—James Madison (1751–1836)
“Nothing can be more real, or concern us more, than our own sentiments of pleasure and uneasiness; and if these be favourable to virtue and unfavourable to vice, no more can be requisite to the regulation of our conduct and behavior.”
—David Hume (1711–1776)