Policy Framework for Data Breaches


Data breaches and companies' responses to them are within the headlines for the past few years. They seem as inevitable as death and taxes. The recent large breach at JP Morgan - a bank with high security standards - may be a worrisome continuation of the trend. Although some breaches are widely covered in newspapers, several occur at small firms that get little attention. To put it in perspective, consistent with Privacy Clearinghouse (www.privacy, more than 4,400 knowledge breaches are recorded within the US since 2005, exposing nearly one billion records. Why are we seeing so many breaches? Why are not companies protecting their data additional aggressively? And, what can we tend to do regarding it? These queries aren't new. California passed the info breach notification law in 2003. But, it looks that, in the US, neither corporations nor policymakers have created much progress. Thus, it is a sensible time to revisit some economic and policy fundamentals of data breaches. My goal here is to supply a broad framework to focus on numerous tradeoffs and the intuition behind them.

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