Target Data Breach Has Congress Eying Data-Security Alternatives

A key Republican said Wednesday that the string of data thefts dictated a hard look at national policy.

Upton: In the pipeline loop.
National Journal
Dustin Volz
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Dustin Volz
Feb. 5, 2014, 11:27 a.m.

Con­gress will con­sider new ap­proaches to data se­cur­ity in the wake of ma­jor data thefts at Tar­get and oth­er re­tail­ers, a key House Re­pub­lic­an said Wed­nes­day.

Rep. Fred Up­ton — the top Re­pub­lic­an on the power­ful House En­ergy and Com­merce Com­mit­tee — sug­ges­ted that Con­gress may need to tackle cus­tom­er data se­cur­ity “dif­fer­ently” than the cur­rent sys­tem, where data pro­tec­tion is dic­tated by a patch­work of fed­er­al and state reg­u­la­tions.

“Breaches, iden­tity theft, and fin­an­cial fraud con­tin­ue, af­fect­ing every sec­tor from the fed­er­al gov­ern­ment to mer­chants, banks, uni­versit­ies, and hos­pit­als,” Up­ton said in his open­ing re­marks. “We must con­sider wheth­er the cur­rent mul­tilay­er ap­proach to data se­cur­ity — fed­er­al, state, and in­dustry self-reg­u­la­tion — can be more ef­fect­ive, or wheth­er we need to ap­proach the is­sue dif­fer­ently.”

Up­ton didn’t spe­cify what le­gis­lat­ive ap­proach he might fa­vor, but his en­dorse­ment of any bill cre­at­ing a na­tion­al re­port­ing stand­ard that would re­quire re­tail­ers to no­ti­fy cus­tom­ers when their data is at risk could go a long way to­ward con­vin­cing his fel­low House Re­pub­lic­ans that such a meas­ure is needed.

Up­ton nev­er ac­ted on a pre­vi­ous meas­ure backed by former Rep. Mary Bono back in 2011 that would have cre­ated a na­tion­al stand­ard. The bill nev­er gained any mo­mentum in Up­ton’s com­mit­tee after it cleared the Com­merce, Man­u­fac­tur­ing, and Trade Sub­com­mit­tee, which Bono chaired at the time. Bono, a Cali­for­nia Re­pub­lic­an who now works as a data-se­cur­ity ad­viser with Fae­greBD Con­sult­ing, told Na­tion­al Journ­al last month that Up­ton was sup­port­ive at the time but that the is­sue failed to climb un­to the pan­el’s dock­et.

Demo­crats, mean­while, worry that Con­gress could pass a pa­per-ti­ger stand­ard that could po­ten­tially un­der­mine stronger state pro­tec­tions. And they ad­di­tion­ally are clam­or­ing for le­gis­la­tion that would boost the Fed­er­al Trade Com­mis­sion’s power to pun­ish com­pan­ies that provide in­ad­equate se­cur­ity. At a hear­ing earli­er in the week, Demo­crat­ic Sen. Eliza­beth War­ren de­clared, “Data-se­cur­ity prob­lems aren’t go­ing to go away on their own, so Con­gress ser­i­ously needs to con­sider wheth­er to strengthen the FTC’s hand.”

Re­tail­ers have been quick to tell Con­gress they need one na­tion­al re­port­ing stand­ard for data breaches in the wake of alarm­ing thefts un­covered at Tar­get, Nei­man Mar­cus, Mi­chaels Stores, and White Lodging. But calls for fed­er­al reg­u­la­tion from such busi­nesses have largely fallen on deaf ears with­in the Re­pub­lic­an caucus, where many law­makers are leery of en­croach­ing on the private sec­tor.

That sen­ti­ment was on dis­play at Wed­nes­day’s con­gres­sion­al hear­ing, the third in as many days con­vened to re­view data se­cur­ity. Re­pub­lic­an Lee Terry, chair­man of the Com­merce, Man­u­fac­tur­ing and Trade Sub­com­mit­tee, said he is “work­ing on le­gis­la­tion that would foster quick­er no­ti­fic­a­tion by re­pla­cing the mul­tiple — and some­times con­flict­ing — state no­ti­fic­a­tion re­gimes with a single, uni­form no­ti­fic­a­tion re­gime.”

But Terry also re­it­er­ated that “cum­ber­some stat­utory man­dates can be ill-equipped to deal with evolving threats.” FTC Chair­wo­man Edith Ramirez again countered that as­sump­tion, testi­fy­ing as she did earli­er this week that con­gres­sion­al ac­tion is “ne­ces­sary.”

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