“Eight months after the state’s tough, new data privacy regulations went into effect, many businesses are still sorting through the rules and working to bring their firms into compliance. “
The regulations, which went into force in March, are intended to protect a consumer’s personal information from identity theft and other privacy breaches and to spell out steps that businesses must take to ensure data is secured. Some large companies — particularly those in the finance and health care industries that are already subject to data security laws like the Health Insurance Portability and Accountability Act (HIPAA) — had privacy measures in place, which helped get them ready for Massachusetts’ regulations. However, for many smaller and midsize companies that have not been subject to data security laws before, complying with the rules is a longer and often more painful process.
some businesses that are complying with privacy regulations for the first time and have limited in-house technology expertise “are running around with their hair on fire, trying to figure out what to do first,”
“We’ve seen a substantial uptick in activity in clients seeking guidance in how to comply,” said Carlos Perez-Albuerne, a partner at Choate Hall & Stewart LLP. “There’s a whole swath of businesses that never had to deal with anything like this before.”
Under the regulations, organizations — no matter where they are based — that store personal information about Massachusetts residents have to write security policies detailing how the data will be protected, encrypt the data when it is stored on laptops or other portable devices or transmitted over public networks, and monitor their systems for breaches.
Believed to be among the most stringent data privacy regulations in the U.S., the rules have lawmakers and businesses taking note. The regulations are now driving computer security policy agendas across the country, said Mark Schreiber, a partner at Edwards Angell Palmer & Dodge who chairs the firm’s privacy and data protection group. “The impact is much broader than we ever imagined. Who would have thought it would have catalyzed so much activity?” he said. “This will be with us for decades or longer.”
Since March, Cutugno Court Reporting and Sten-Tel Inc., a Springfield-based firm that provides document management and transcription systems, has spent “easily into the six-figure realm” on technology and consulting services to comply with the privacy regulations, said Blake Martin, the company’s CIO.
To date, state regulators have not yet taken any public enforcement actions against organizations that have failed to comply with the rules. The state attorney general’s office, which is charged with enforcing the regulations, and the Office of Consumer Affairs and Business Regulation, which developed the regulations, have been focusing on compliance efforts, reaching out to trade groups, bar associations and others to spread the word.