We should be worried.
Any reasonable person, of course, should agree that such thefts must be punished and data warehouses should let us know if our information falls into the hands of criminals.
But a bill announced last week by Sens. Arlen Specter, R-Penn., and Patrick Leahy, D-Vt., goes far beyond reasonable data security precautions. It amounts to a crackdown on individuals, bloggers and legitimate e-mail list moderators.
That's remarkable but not as extreme as the second requirement: The Web master or mailing list operator might have to "cover the cost" of 12 monthly credit reports of each person whose e-mail addresses was lost or purloined.
For a popular site with 10,000 registered users, that would be a princely sum. If monthly credit reports cost $15 a person, that's $1.8 million over a year.
Sure, it's annoying if your e-mail address ends up in the hands of a spammer, but there's no connection to identity fraud. Independent Web site owners should not be bankrupted by making them cough up that kind of cash: The penalty is unrelated to any harm.
Other sections of the proposed law, called the Personal Data Privacy and Security Act, are highly rigid.
For example, anyone running an ad-supported Web site or mailing list with 10,000 or more registered users must "implement a comprehensive personal data privacy and security program," create a "risk assessment" to "identify reasonably foreseeable" vulnerabilities, "assess the likelihood" of security breaches, "assess the sufficiency" of policies to protect against them, publish the "terms of such program," do "regular testing of key controls" to test security, select only superior "service providers" after doing "due diligence," and regularly "monitor, evaluate and adjust" security policies.
Law of unintended consequences
Specter and Leahy probably intended to target large businesses that employ teams of corporate lawyers and would view this as just more government paperwork. Unfortunately, though, that's not what their proposed law actually says.
Tracy Schmaler, a Leahy spokeswoman, said that the bill could be changed before a final vote. "We don't want to place any undue limitations on mailing lists, Web sites, and so on," Schmaler said. "The intent of this is not to make listservs or bloggers pay for credit reports."
Politicians don't like to admit this because it makes for fewer press conferences, but sometimes new laws aren't the answer. Take Bank of America's embarrassing loss of a backup tape--which happened even though the company was subject to the detailed security regulations of the Gramm-Leach Bliley Act.
An alternative might be to rely on a general-purpose rule that punishes negligence. Courts are already moving in that direction--at least if appellate decisions in New Hampshire and Michigan are any indications.
That approach would make for fewer Senate press conferences, true, but the end result might make a lot more sense.
Declan McCullagh is CNET News.com's chief political correspondent. He spent more than a decade in Washington, D.C., chronicling the busy intersection between technology and politics. Previously, he was the Washington bureau chief for Wired News, and a reporter for Time.com, Time magazine and HotWired. McCullagh has taught journalism at American University and been an adjunct professor at Case Western University.
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