Category Archives: Cybersecurity

June 23, 2020 · 9:36 AM

CCPA and GDPR UPDATE: Unstructured Enterprise Data in Scope of Compliance Requirements

An earlier version of this article appeared on Legaltech News

By John Patzakis

A core requirement of both the GDPR and the similar California Consumer Privacy Act (CCPA), which becomes enforceable on July 1, is the ability to demonstrate and prove that personal data is being protected. This requires information governance capabilities that allow companies to efficiently identify and remediate personal data of EU and California residents. For instance, the UK Information Commissioner’s Office (ICO) provides that “The GDPR places a high expectation on you to provide information in response to a SAR (Subject Access Request). Whilst it may be challenging, you should make extensive efforts to find and retrieve the requested information.”CCPA GDPR

However, recent Gartner research notes that approximately 80% of information stored by companies is “dark data” that is in the form of unstructured, distributed data that can pose significant legal and operational risks. With much of the global workforce now working remotely, this is of special concern and nearly all the company data maintained and utilized by remote employees is in the form of unstructured data. Unstructured enterprise data generally refers to searchable data such as emails, spreadsheets and documents on laptops, file servers, and social media.

The GDPR

An organization’s GDPR compliance efforts need to address any personal data contained within unstructured electronic data throughout the enterprise, as well as the structured data found in CRM, ERP and various centralized records management systems. Personal data is defined in the GDPR as: “any information relating to an identified or identifiable natural person (‘data subject’); an identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person.”

Under the GDPR, there is no distinction between structured versus unstructured electronic data in terms of the regulation’s scope. There is a separate guidance regarding “structured” paper records (more on that below). The key consideration is whether a data controller or processor has control over personal data, regardless of where it is located in the organization. Nonetheless, there is some confusion about the scope of the GDPR’s coverage across structured as well as unstructured electronic data systems.

The UK ICO is a key government regulator that interprets and enforces the GDPR, and has recently issued important draft guidance on the scope of GDPR data subject access rights, including as it relates to unstructured electronic information. Notably, the ICO notes that large data sets, including data analytics outputs and unstructured data volumes, “could make it more difficult for you to meet your obligations under the right of access. However, these are not classed as exemptions, and are not excuses for you to disregard those obligations.”

Additionally the ICO guidance advises that “emails stored on your computer are a form of electronic record to which the general principles (under the GDPR) apply.” In fact, the ICO notes that home computers and personal email accounts of employees are subject to GDPR if they contain personal data originating from the employers networks or processing activities. This is especially notable under the new normal of social distancing, where much of a company’s data (and associated personal information) is being stored on remote employee laptops.

The ICO also provides guidance on several related subjects that shed light on its stance regarding unstructured data:

Archived Data: According to the ICO, data stored in electronic archives is generally subject to the GDPR, noting that there is no “technology exemption” from the right of access. Enterprises “should have procedures in place to find and retrieve personal data that has been electronically archived or backed up.” Further, enterprises “should use the same effort to find information to respond to a SAR as you would to find archived or backed-up data for your own purposes.”

Deleted Data: The ICO’s view on deleted data is that it is generally within the scope of GDPR compliance, provided that there is no intent to, or a systematic ability to readily recover that data. The ICO says it “will not seek to take enforcement action against an organisation that has failed to use extreme measures to recreate previously ‘deleted’ personal data held in electronic form. We do not require organisations to use time and effort reconstituting information that they have deleted as part of their general records management.”

However, under this guidance organizations that invest in and deploy re-purposed computer forensic tools that feature automated un-delete capabilities may be held to a higher standard. Deploying such systems can reflect intent to as well as having the systematic technical ability to recover deleted data.

Paper Records: Paper records that are part of a “structured filing system” are subject to the GDPR. Specifically, if an enterprise holds “information about the requester in non-electronic form (e.g. in paper files or on microfiche records)” then such hard-copy records are considered personal data accessible via the right of access,” if such records are “held in a ‘filing system.” This segment of the guidance reflects that references to “unstructured data” in European parlance usually pertains to paper records. The ICO notes in separate guidance that “the manual processing of unstructured personal data, such as unfiled handwritten notes on paper” are outside the scope of GDPR.

GDPR Article 4 defines a “filing system” as meaning “any structured set of personal data which are accessible according to specific criteria, whether centralized, decentralized or dispersed on a functional or geographical basis.” The only form of “unstructured data” that would not be subject to GDPR would be unfiled paper records like handwritten notes or legacy microfiche.

The CCPA  

The California Attorney General (AG) released a second and presumably final round of draft regulations under the California Consumer Privacy Act (CCPA) that reflect how unstructured electronic data will be treated under the Act. The proposed rules outline how the California AG is interpreting and will be enforcing the CCPA. Under § 999.313(d)(2), data from archived or backup systems are—unlike the GDPR—exempt from the CCPA’s scope, unless those archives are restored and become active. Additional guidance from the Attorney General states: “Allowing businesses to delete the consumer’s personal information on archived or backup systems at the time that they are accessed or used balances the interests of consumers with the potentially burdensome costs of deleting information from backup systems that may never be utilized.”

What is very notable is that the only technical exception to the CCPA is unrestored archived and back-up data. Like the GDPR, there is no distinction between unstructured and structured electronic data. In the first round of public comments, an insurance industry lobbying group argued that unstructured data be exempted from the CCPA. As reflected by revised guidance, that suggestion was rejected by the California AG.

For the GDPR, the UK ICO correctly advises that enterprises “should ensure that your information management systems are well-designed and maintained, so you can efficiently locate and extract information requested by the data subjects whose personal data you process and redact third party data where it is deemed necessary.” This is why Forrester Research notes that “Data Discovery and Classification are the foundation for GDPR compliance.”

Establish and Enforce Data Privacy Policies

So to achieve GDPR and CCPA compliance, organizations must first ensure that explicit policies and procedures are in place for handling personal information. Once established, it is important to demonstrate to regulators that such policies and procedures are being followed and operationally enforced. A key first step is to establish a data map of where and how personal data is stored in the enterprise. This exercise is actually required under the GDPR Article 30 documentation provisions.

An operational data audit and discovery capability across unstructured data sources allows enterprises to efficiently map, identify, and remediate personal information in order to respond to regulators and data subject access requests from EU and California citizens. This capability must be able to search and report across several thousand endpoints and other unstructured data sources, and return results within minutes instead of weeks or months as is the case with traditional crawling tools. This includes laptops of employees working from home.

These processes and capabilities are not only required for data privacy compliance but are also needed for broader information governance and security requirements, anti-fraud compliance, and e-discovery.

Implementing these measures proactively, with routine and consistent enforcement using solutions such as X1 Distributed GRC, will go a long way to mitigate risk, respond efficiently to data subject access requests, and improve overall operational effectiveness through such overall information governance improvements.

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October 15, 2019 · 9:02 AM

Incident Reporting Requirements Under GDPR and CCPA Require Effective Incident Response

By John Patzakis

The European General Data Protection Regulation (GDPR) is now in effect, but many organizations have not fully implemented compliance programs. For many organizations, one of the top challenges is complying with the GDPR’s tight 72-hour data breach notification window. Under GDPR article 33, breach notification is mandatory where a data breach is likely to “result in a risk for the rights and freedoms of individuals.” This must be done within 72 hours of first having become aware of the breach.  Data processors will also be required to notify their customers, the controllers, “without undue delay” after first becoming aware of a data breach.GDPR-stamp

In order to comply, organizations must accelerate their incident response times to quickly detect and identify a breach within their networks, systems, or applications, and must also improve their overall privacy and security processes. Being able to follow the GDPR’s mandate for data breach reporting is equally important as being able to act quickly when the breach hits. Proper incident response planning and practice are essential for any privacy and security team, but the GDPR’s harsh penalties amplify the need to be prepared.

It is important, however, to note that the GDPR does not mandate reporting for every network security breach. It only requires reporting for breaches impacting the “personal data” of EU subjects. And Article 33 specifically notes that reporting is not required where “the personal data breach is unlikely to result in a risk to the rights and freedoms of natural persons.”

The California Consumer Privacy Act contains similar provisions. Notification is only required if a California resident’s data is actually compromised.

So after a network breach is identified, determining whether the personal data of an EU or California citizen was actually compromised is critical not only to comply where a breach actually occurred, but also limit unnecessary or over reporting where an effective response analysis can rule out an actual personal data breach.

These breaches are perpetrated by outside hackers, as well as insiders. An insider is any individual who has authorized access to corporate networks, systems or data.  This may include employees, contractors, or others with permission to access an organizations’ systems. With the increased volume of data and the increased sophistication and determination of attackers looking to exploit unwitting insiders or recruit malicious insiders, businesses are more susceptible to insider threats than ever before.

Much of the evidence of the scope of computer security incidents and whether subject personal data was actually compromised are not found in firewall logs and typically cannot be flagged or blocked by intrusion detection or intrusion prevention systems. Instead, much of that information is found in the emails and locally stored documents of end users spread throughout the enterprise on file servers and laptops. To detect, identify and effectively report on data breaches, organizations need to be able to search across this data in an effective and scalable manner. Additionally, proactive search efforts can identify potential security violations such as misplaced sensitive IP, or personal customer data or even password “cheat sheets” stored in local documents.

To date, organizations have employed limited technical approaches to try and identify unstructured distributed data stored across the enterprise, enduring many struggles. For instance, forensic software agent-based crawling methods are commonly attempted but cause repeated high computer resource utilization for each search initiated and network bandwidth limitations are being pushed to the limits rendering this approach ineffective, and preventing any compliance within tight reporting deadlines. So being able to search and audit across at least several hundred distributed end points in a repeatable and expedient fashion is effectively impossible under this approach.

What has always been needed is gaining immediate visibility into unstructured distributed data across the enterprise, through the ability to search and report across several thousand endpoints and other unstructured data sources, and return results within minutes instead of days or weeks. None of the traditional approaches come close to meeting this requirement. This requirement, however, can be met by the latest innovations in enterprise eDiscovery software.

X1 Distributed GRC  represents a unique approach, by enabling enterprises to quickly and easily search across multiple distributed endpoints from a central location.  Legal, cybersecurity, and compliance teams can easily perform unified complex searches across both unstructured content and metadata, and obtain statistical insight into the data in minutes, instead of days or weeks. With X1 Distributed GRC, organizations can proactively or reactively search for confidential data leakage and also keyword signatures of personal data breach attacks, such as customized spear phishing attacks. X1 is the first product to offer true and massively scalable distributed searching that is executed in its entirety on the end-node computers for data audits across an organization. This game-changing capability vastly reduces costs and quickens response times while greatly mitigating risk and disruption to operations.

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February 28, 2018 · 8:51 AM

GDPR Provides a Private Right of Action. Here’s Why That’s Important.

As the world approaches the May 25, 2018 GDPR enforcement date, some organizations are still adapting a wait and see approach, while many others are preparing with a palpable sense of urgency. Gartner published a study reporting that over 50% of companies affected by GDPR will not meet the May deadline. And then there are some pundits who are predicting Armageddon. While the Armageddon forecasts are premature, I do not see a lot of awareness, even among some legal privacy lawyers, of the private right action afforded under the GDPR.

A very important dynamic of the GDPR is that the private citizens of the European Union will have an active role in its enforcement. Unlike many regulatory regimes, where a relatively small handful of government regulators infrequently enforce the rules, organizations that store information on EU citizens will face about 300 million regulators, which is a rough figure of the adult population in the EU. These citizens can make requests at any time to have data deleted in place through the right of erasure as well as make other requests regarding the usage of their personal data.

Even more importantly, the GDPR provides a mechanism for a private right of action under Article 82(1).  And Article 80(2) provides that “[T]he data subject shall have the right to mandate a not-for-profit body, organisation or association …. to lodge the complaint on his or her behalf.”

Regulations which provide a private right of action, including the ability to bring a class action law suit, are exponentially more impactful than the vast majority of regulations which do not.

European privacy lawyer and activist Max Schrems — fresh off his major legal victory resulting the safe harbor provisions in the data transfer arrangement between the EU and US being struck down in 2015 — is running a crowdfunding campaign to set up a not-for-profit privacy enforcement organization to take advantage of the GDPR right of private action provisions to pursue class-action style litigation. Shrems’ NGO, — called noyb; short for: ‘none of your business’ — is being made possible because GDPR allows for collective enforcement of individuals’ data rights.

Mr. Schrems told the Financial Times the organization would help consumers fight for their rights and encourage whistleblowers inside tech companies to speak out. “It makes sense to have a single EU hub to act as a coordinator to connect existing resources, ensure actions are effective and strategic, and ensure efforts and resources are not duplicated,” he said. In other public statements, Schrmes noted that his organization will enable class-action style GDPR claims in order “to enforce your rights individually. The only way to do that is to collectivise it through a rights organisation to get things done as we have in the past with consumer rights.” Schrems and his partners believe that having a single NGO at an EU level with the necessary expertise, experience and connections is far more efficient than lots of individual ones.

These developments concerning a possible torrent of private GDPR claims heighten the urgency and expected impact of the law. In terms of readiness, a mandatory aspect of GDPR compliance is the ability to demonstrate and prove that personal data is being protected, requiring information governance capabilities that allow companies to efficiently produce the documentation and other information necessary to respond to regulators and EU private citizen’s requests. As such, any GDPR compliance programs are ultimately hollow without consistent, operational execution and enforcement. To achieve GDPR compliance and also EU data shield certification, organizations must ensure that explicit policies and procedures are in place for handling personal information, and just as importantly, the ability to prove that those policies and procedures are being followed and operationally enforced. What has always been needed is gaining immediate visibility into unstructured distributed data across the enterprise, through the ability to search and report across several thousand endpoints and other unstructured data sources, and return results regarding PII leakage within minutes instead of days or weeks. The need for such an operational capability is further heighted by the urgency of GDPR compliance.

X1 Distributed Discovery (X1DD) represents a unique approach, by enabling enterprises to quickly and easily search across multiple distributed endpoints and data servers for PII and other data from a central location.  Legal and compliance teams can easily perform unified complex searches across both unstructured content and metadata, obtaining statistical insight into the data in minutes, instead of days or weeks. With X1DD, organizations can also automatically migrate, collect, delete, or take other action on the data as a result of the search parameters.  Built on our award-winning and patented X1 Search technology, X1DD is the first product to offer true and massively scalable distributed searching that is executed in its entirety on the end-node computers for data audits across an organization. This game-changing capability vastly reduces costs while greatly mitigating risk and disruption to operations.

X1DD operates on-demand where your data currently resides — on desktops, laptops, servers, or even the Cloud — without disruption to business operations and without requiring extensive or complex hardware configurations. Beyond enterprise eDiscovery, GDPR and other information governance compliance functionality, X1DD includes the award-winning X1 Search, improving employee productivity while effectuating that all too illusive actual compliance with information governance programs, including GDPR.

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June 15, 2017 · 8:22 AM

eDiscovery Tech Can Effectively Address Key Cybersecurity Requirements

Organizations spent an estimated 122.45 billion USD in 2016 on cybersecurity defense solutions and services, in a never-ending effort to procure better firewalls, anti-malware tools, and intrusion detection and prevention systems to keep hackers out of their networks. However, recent industry studies clearly demonstrate that threats posed by insiders (whether through malice or negligent conduct) dwarf those from the outside.

In fact, industry experts assert that employees are inadvertently causing corporate data breaches and leaks daily. The Ponemon Institute recently surveyed hundreds of companies in its 2016 Cost of Data Breach Study.  Among 874 incidents, the survey revealed that 568 were caused by employee or contractor negligence; 191 by malicious insiders and only 85 incidents purely attributed to outsiders.

An insider is any individual who has authorized access to corporate networks, systems or data.  This may include employees, contractors, or others with permission to access an organizations’ systems. With the increased volume of data and increased sophistication and determination of attackers looking to exploit unwitting and even recruit malicious insiders, businesses are more susceptible to insider threats than ever before.

The most serious and often devastating cybersecurity incidents are usually related to “spear phishing” attacks, which are comprised of targeted and often highly customized electronic communications sent to specific individuals in a business that appear to come from a trusted individual or business. The targeted insider is often tricked into disclosing their passwords, providing highly sensitive information, or installing malware on their computer. These attacks tend to be successful because they are so customized and are designed to evade traditional cybersecurity defenses.

Much of the evidence and other indications of spear phishing and malicious insider incidents are not found in firewall logs and typically cannot be flagged or blocked by intrusion detection or intrusion prevention systems. Instead, much of that information is found in the emails and locally stored documents of end users spread throughout the enterprise. To detect, identify and effectively respond to insider threats, organizations need to be able to search across this data in an effective and scalable manner. Additionally, proactive search efforts can identify potential security violations such as misplaced sensitive IP, or personal customer data or even password “cheat sheets” stored in local documents.

To date, organizations have employed limited technical approaches to try and identify unstructured distributed data stored across the enterprise, enduring many struggles. For instance, forensic software agent-based crawling methods are commonly attempted but cause repeated high user computer resource utilization for each search initiated and network bandwidth limitations are being pushed to the limits rendering this approach ineffective. So being able to search and audit across at least several hundred distributed end points in a repeatable and quick fashion is effectively impossible under this approach.

What has always been needed is gaining immediate visibility into unstructured distributed data across the enterprise, through the ability to search and report across several thousand endpoints and other unstructured data sources, and return results within minutes instead of days or weeks. None of the traditional approaches come close to meeting this requirement. This requirement, however, can be met by the latest innovations in enterprise eDiscovery software.

X1 Distributed Discovery (X1DD) represents a unique approach, by enabling enterprises to quickly and easily search across multiple distributed endpoints from a central location.  Legal, cybersecurity, and compliance teams can easily perform unified complex searches across both unstructured content and metadata, obtaining statistical insight into the data in minutes, instead of days or weeks. With X1DD, organizations can proactively or reactively search for confidential data leakage and also keyword signatures of customized spear phishing attacks. Built on our award-winning and patented X1 Search technology, X1DD is the first product to offer true and massively scalable distributed searching that is executed in its entirety on the end-node computers for data audits across an organization. This game-changing capability vastly reduces costs and quickens response times while greatly mitigating risk and disruption to operations.

X1DD operates on-demand where your data currently resides — on desktops, laptops, servers, or even the Cloud — without disruption to business operations and without requiring extensive or complex hardware configurations.

Beyond providing enterprise eDiscovery and information governance functionality for an organization, employees benefit from having use of the award-winning X1 Search product to improve their productivity, with the added benefit of allowing the business to address the prevalent cybersecurity gap in addressing spear phishing attacks and other insider threats.

 

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