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The European Commission has published proposals for a law change that would force telecoms firms to notify regulators and customers of all breaches of their data security.

A similar law in California has resulted in a stream of data breaches being made public.

In a consultation on changes to the EU framework on telecoms regulation, the EC proposes that all providers of "electronic communications networks or services" be forced to notify customers and regulators of any breaches of security that would result in their personal data being made available to others.

The current EU Directive only instructs network providers to notify customers of security risks. It does not cover security breaches.

The current law in the UK follows the Directive closely via the Privacy and Electronic Communications Regulations of 2003.

"Where...there remains a significant risk to the security of the public electronic communications service, the service provider shall inform the subscribers concerned of (a) the nature of that risk; (b) any appropriate measures that the subscriber may take to safeguard against that risk, and (c) the likely costs to the subscriber involved in the taking of such measures," says the Act.

The consultation under which the new proposals are made runs until 27 October. If the Directive is changed as planned it could have serious effects on companies operating the networks covered.

In California and the 33 US states which have since copied its groundbreaking notification laws, reports of security breaches have rocketed in number. Where companies may previously have not informed regulators and customers that a breach had taken place, the news of each breach now reaches vast audiences.

A series of laptop thefts and losses from government and private bodies have exposed the data of millions of people to potential loss and misuse in the US. Some of that information may never have come to light without the notification law.

"A requirement to notify security breaches would create an incentive for providers to invest in security but without micro-managing their security policies," says the working document accompanying the review process.

"The proposed changes would require providers of electronic communications networks and services to notify the [regulator] of any breach of security that led to the loss of personal data and/or to interruptions in the continuity of service supply."

"The regulator would have the possibility to inform the public if they considered that it was in the public interest," said the document. Service providers would also have to "notify their customers of any breach of security leading to the loss, modification or destruction of, or unauthorised access to, personal customer data," it said.

The consultation was published on 28 June. OUT-LAW asked the UK's Office of the Information Commissioner yesterday if it plans to recommend a change to UK law that would apply the Californian model here. A spokesman responded: "We are not advocating any such change."

See: The working document (37 page/193KB PDF)

Copyright © 2006, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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