Worst-case-scenario headlines no longer come as a surprise: data breaches have become an unfortunate reality for businesses of all sizes and industries with significant legal implications. In response and in defense of consumers, as cyber threats continue to evolve, so too does the regulatory landscape governing data protection. Ensuring compliance with these regulations is not only a legal obligation; it’s also a critical component of maintaining customer trust and safeguarding sensitive information.
IBM’s Cost of a Data Breach Report 2024 provides valuable insights into the financial and operational impact of data breaches. The global average cost of a data breach increased by 10 percent over the previous year, reaching $4.88 million. This increase was driven by post-breach customer support and remediation and notification. Nearly half of all breaches involved customer personal identifiable information (PII), which can include tax identification numbers, emails, phone numbers, and home addresses. The cost of breaches involving customer PII was particularly high.
Additionally, 35 percent of breaches involved shadow data, which refers to unmanaged data stored in unauthorized or unmonitored locations. Breaches involving shadow data were more costly and took longer to identify and contain. Further complicating this volatile landscape? More than half of breached organizations faced severe security staffing shortages, which contributed to higher breach costs.
The report also highlights the increasing severity of regulatory fines, with those paying more than $50,000 rising by 22.7 percent over the previous year. This underscores the importance of adhering to regulatory requirements to avoid substantial financial penalties. Organizations that fail to comply with breach notification requirements and other regulatory mandates can face significant fines and legal repercussions, further exacerbating the financial impact of a breach.
Upcoming Data Protection Regulations in 2025
In 2025, several new regulations are expected to be enacted, with full enforcement going into effect for some (EMEA, Australia) and others coming up for vote (U.S.); each will have significant implications for cyber incident response actions.
Here’s a look at the key upcoming regulations in the US, EMEA, and Australia.
United States of America
1. American Privacy Rights Act (APRA)
- Overview: The APRA is expected to exit committee and be up for vote in 2025. This federal privacy law aims to provide comprehensive data protection standards across the United States, addressing the patchwork of state laws currently in place.
- Key Provisions: APRA will likely include stringent requirements for data breach notifications, consumer rights to access and delete their data, and obligations for businesses to implement robust security measures.
- Impact on Cyber Incident Response: Companies would need to ensure timely breach notifications and enhance their cybersecurity frameworks to comply with APRA’s requirements.
2. State-Level Data Privacy Laws
- Overview: Several new state data privacy laws are set to take effect in 2025, including those in Delaware, Indiana, Iowa, Kentucky, Maryland, Minnesota, and Nebraska.
- Key Provisions: These laws would include specific consent and policy requirements for biometric information, notice of data collection practices, and opt-in/opt-out requirements for certain types of data processing.
- Impact on Cyber Incident Response: Businesses operating in these states would need to tailor their incident response plans to meet the varying requirements of each state law.
EMEA
1. AI Act (AIA)
- Overview: The AI Act is expected to be finalized before the next EU elections in June 2025. This legislation will impose strict obligations on providers and users of AI systems, including requirements for transparency, accountability, and risk management.
- Key Provisions: The AIA would mandate detailed documentation of AI systems, regular audits, and measures to mitigate risks associated with AI technologies.
- Impact on Cyber Incident Response: Companies using AI in their cybersecurity operations would need to ensure compliance with the AIA’s requirements, including documenting AI-driven incident response actions and conducting regular audits.
2. GDPR Enforcement Focus Areas
- Overview: In 2025, GDPR enforcement will focus on data brokerage, biometric data, children’s data, and AI.
- Key Provisions: Supervisory authorities will increase scrutiny on these areas, requiring companies to enhance their data protection measures and compliance efforts.
- Impact on Cyber Incident Response: Businesses will need to prioritize the protection of sensitive data types and ensure robust incident response plans that address these enforcement focus areas.
Australia
1. Privacy Act Amendments
- Overview: The Australian government has agreed to several proposals to amend the Privacy Act 1988, with legislative amendments expected in 2025.
- Key Provisions: The amendments will strengthen security and data destruction obligations, introduce new civil penalty provisions, and expand the courts’ enforcement powers.
- Impact on Cyber Incident Response: Companies will need to implement enhanced security measures, ensure proper data destruction practices, and be prepared for increased regulatory scrutiny and penalties.
Cultivating Post-Incident Effectiveness
After a data breach, the necessity for strict compliance with regulatory requirements like these hits its peak. As the saying goes, an ounce of prevention is worth a pound of cure—but when a crisis strikes, a swift response is critical to minimizing damage, protecting vulnerable people, and safeguarding your brand.
Here are some key aspects of the most essential post-incident actions any company must take in response to a data breach.
1. Breach Notification Requirements
- Timely Notifications: Regulations such as GDPR require businesses to notify authorities within 72 hours of becoming aware of a breach. According to IBM’s report, over half of organizations reported their breaches within this timeframe, while 34 percent took more than 72 hours to report.
- Clear Communication: When notifying regulators and affected individuals, provide clear and concise information about the breach, including what data was compromised, the potential impact, and steps they can take to protect themselves.
2. Post-Breach Remediation and Support
- Customer Support: Providing robust post-breach customer support is essential to mitigate the impact on affected individuals. This includes offering credit monitoring services, identity theft protection, and clear guidance on how to secure their information.
- Business Disruption: The IBM report indicates that 70 percent of organizations experienced significant business disruption following a breach. Effective post-breach remediation efforts, including the use of dedicated customer support channels and data recovery and restoration, can help minimize operational downtime and restore normal business functions more quickly.
3. Leveraging AI and Automation
- Reducing Costs: The adoption of AI and automation in security operations has been shown to lower breach costs significantly. Organizations using these technologies extensively saw average breach costs reduced by $1.88 million according to IBM’s Cost of a Data Breach Report for 2024.
- Faster Response: AI and automation also help accelerate the identification and containment of breaches, reducing the overall lifecycle of a breach and its associated costs. For example, Relativity Data Breach Response can help accelerate the time it takes to get to your entity report, ensuring you have an accurate view of the impact and can accurately notify the regulators and impacted individuals.
Adapting Your Cyber Incident Response Strategy
Navigating the legal landscape of data protection requires a proactive and comprehensive approach, especially in the aftermath of a data breach. By staying informed about these upcoming regulations, businesses can proactively adjust their cyber incident response strategies to ensure compliance and mitigate the impact of data breaches.
Taking the time to understand key regulations, perform timely and transparent breach notifications when the unfortunate necessity arises (leveraging AI and automation to work faster and smarter on these projects), and prepare for optimal post-breach remediation and support, will enable your organization to mitigate the financial and reputational impact of data breaches. After all, companies who aim to succeed and survive well into the 21st Century will need to prioritize regulatory compliance; incorporating the right technology will remain a critical component of your data protection strategy.
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