Businesses should take steps to protect usernames, email addresses, passwords, and security questions and answers.
A key issue in determining whether notification is required following a data breach is whether “personal information” (PI) was acquired by an unauthorized person. US states vary significantly in defining what information qualifies as PI.[1] As part of a recent trend, some data breach notification statutes have been expanding the definition of PI, including by adding usernames and email addresses.
This LawFlash highlights this recent development.
Trend to Add Usernames or Email Addresses
Illinois, Nebraska, and Nevada are the latest to add usernames or email addresses to the definition of PI when they are combined with information that would permit access to an online account.[2] The Illinois law took effect on January 1, 2017, while the respective laws in Nebraska and Nevada took effect in 2016.
Three other states (California, Florida, and Wyoming) had previously enacted laws mandating that either a username or email address constitutes PI when combined with a password or security question and answer that would permit access to an online account.[3] California first expanded the definition of PI to include usernames and email addresses in January 2014. Florida was next in July 2014, and Wyoming followed in July 2015. In most of these jurisdictions, the username or email address combined with the password or security question and answer provides an independent basis to establish PI—even if no first or last name (or other personally identifiable information) is disclosed.
Given the trend to broaden the scope of PI, private and government entities that collect usernames, email addresses, passwords, and security questions and answers should take steps to protect this information.
Other Diverging Standards
Private and government entities should also be aware that different jurisdictions apply varying standards to the collection of such information. For example, the Nevada, Rhode Island, and Wyoming definitions are narrower in that they require at least a last name and first initial to be disclosed in order for user data to qualify as PI, just as it is for social security numbers, driver’s license numbers, and most other forms of PI. In other words, while releasing an unencrypted username and password would be considered to be PI in California, Florida, Illinois, and Nebraska even if the last name (and at least a first initial) of the individual associated with the username was not released, it would not qualify as PI in Nevada, Rhode Island, or Wyoming without that additional information.
Nevada’s and Rhode Island’s PI definitions are broader in other respects in terms of what constitutes user data. For example, Nevada and Rhode Island consider a username, email address, or a “unique identifier” to be PI when combined with a password, security question and answer, or an “access code” that would permit access to an online account.[4] The other states only list usernames and/or email addresses. The legislative history does not indicate what is considered to be a “unique identifier,” nor are any examples provided. Because this term is added to the “email address” and “username” list, it appears that the states consider this addition to be something more.
Nevada and Rhode Island also added “access code” as data that the username, email address, or unique identifier may be paired with to qualify as PI.[5] As with the terms “unique identifier,” the legislative history does not indicate what is considered to be an “access code,” nor are any examples provided, but we believe that the states must consider it to be something beyond a password.
These and other distinctions highlight how common data elements are treated differently among the data breach notification jurisdictions. Consequently, depending on the circumstances, data breach notification may be required in some jurisdictions but not others.
Based on the many variations under the state data breach laws, some have called for enactment of a uniform federal standard concerning data breach notification requirements.[6] Until uniform or common standards are adopted, private and government entities collecting PI will need to wade through the state-by-state standards to determine whether data breach notification is mandated under the given circumstances.
International Perspective
Under European and many other international data privacy laws, PI includes any information that identifies an individual or from which an individual can be identified when aggregated with other information. This will include usernames and email addresses where the individual’s actual name is included within the username or email address. Under the forthcoming General Data Protection Regulation (GDPR), which comes into force in May 2018, if a US organization targets European consumers for goods or services, it will be subject to the GDPR when it processes the PI of such European consumers—whether or not the organization is based in the European Union. The requirements under the GDPR include providing information to the individuals about how their PI will be used, disclosed, and transferred, as well as requirements to obtain consent for the processing and transfer of such data to the US (unless an exemption to obtain consent applies). There is also a requirement to notify the relevant data protection authority of a data breach involving PI within 72 hours (unless there is unlikely to be a risk to the individuals’ rights).
Organizations with European businesses, therefore, should note that they may be subject to the GDPR when obtaining and using PI of European consumers, even if the US state laws do not place similar requirements on the organization processing US consumers’ PI. The potential fines for breaching the GDPR can amount to the higher of €20 million or 4% of global annual turnover.
[1] For a listing of the data breach notification statutes, see National Conference of State Legislatures, Security Breach Notification Laws.
[2] See 815 Ill. Comp. Stat. §530/5; Neb. Rev. Stat. 27. §87-802(5)(b); Nev. Rev. Stat. §603A.040(e).
[3] See Cal. Civ. Code §1798.29 (g)(2); Fla. Stat. §501.171(1)(g)(1)(b); Wyo. Stat. §40-12-501; 10 L.P.R.A. §4051(a).
[4] See Nevada §603A.040 (1)(e).
[5] See id., see also R.I. Gen. Laws §11-49.3-3(8)(v).
[6] See, e.g., M. Krotoski, L. Wang, & J. Rosen, The Need to Repair the Complex, Cumbersome, Costly Data Breach Notification Maze, BNA’s Privacy & Security Law Report, 15 PVLR 271 (Feb. 8, 2016).
