Even president-elect Donald Trump has been the victim of a data breach. Several times actually. The payment card system for his Trump Hotel Collection was infected by malware in May 2014 and 70,000 credit card numbers were compromised by the time the hack was discovered several months later. The hotel chain paid a penalty to the State of New York for its handling of that incident. The hotel chain also experienced at least two additional breaches during this past year affecting various properties. From a business perspective, Mr. Trump certainly understands the high costs of cybersecurity in dollars and distraction. But from the Oval Office, it is far less clear what the Trump Administration might do to secure our country’s digital infrastructure and prosecute cybercriminals. Equally uncertain are Mr. Trump’s views on privacy rights and how his presidency might affect federal protections for personal information and cross-border transfers of data. We do not have a crystal ball, but offer some thoughts.
The Campaign Platform
By several measures, cybersecurity had a coming out party on the national stage during this past election cycle. According to published online sources, as many as 18 million tweets were sent out about cybersecurity leading up to Election Day, trailing only guns, foreign affairs, terrorism and the economy. For the first time cybersecurity was raised during a presidential debate (the government needs to be “very, very tough on cyber and cyberwarfare,” Mr. Trump said), and late in his campaign Mr. Trump dedicated a speech to the issue and declared, “To truly make America safe, we must make cybersecurity a major priority.”
Mr. Trump’s campaign website described the candidate’s plans to order a comprehensive review of U.S. cyber defenses and vulnerabilities, including critical infrastructure, by a “Cyber Review Team” composed of individuals from military, law enforcement and the private sector. His platform indicates that he is in favor of promoting not only defensive technologies tailored to known threats, but also offensive technologies to be deployed as both a deterrent and a strategic weapon against state and non-state actors.
Interestingly, the campaign website specifically cites several high-profile data breaches at J.P. Morgan Chase, eBay and Target presumably as evidence to support his assertive positions in the cyber domain. Mr. Trump appears to view cyberattacks on commercial businesses as a threat to national security and to the domestic economy, which could signal increases in the portion of the defense budget spent on cybersecurity and efforts to review, and update where necessary, policies and oversight mechanisms for protecting critical infrastructure from cyber attacks.
Confusing Times for Policy Wonks
What is also remarkable about Mr. Trump’s campaign website is how little detail is provided for so many crucial domestic and international issues, including those near and dear to cybersecurity professionals and policymakers.
Nonetheless, there is fairly pointed evidence that certain policies may be in danger. Mr. Trump has stated his opposition to net neutrality (the principal that all internet traffic should be treated equally) and is expected to appoint heads of the Federal Communications Commission (“FCC”) and Federal Trade Commission (“FTC”) who will try to curtail or unwind progressive regulatory schemes. Along these lines, given Mr. Trump’s preference for small government, we might expect a similar “hands off” regulatory approach in emerging policy debates around e-commerce, the Internet of Things, data security enforcement, and other areas affecting the internet and connectivity.
On a separate note, Mr. Trump’s vigorous support of the Federal Bureau of Investigation (“FBI”) in its battle with Apple to unlock the iPhone used by one of the San Bernardino shooters suggests that his “law and order” instincts and support for bulk data collection may override privacy-related concerns associated with government surveillance activity in the digital realm. The tension around data encryption and the needs of law enforcement could play out in many ways and could implicate institutional protections for personal data that are applicable to other industries, such as insurance, financial services, and the health sector. Such moves could have far-reaching consequences for the United States at home and also abroad.
What about the EU-U.S. Privacy Shield?
The Trump Administration’s focus on national security and its equivocal feelings about encryption could significantly impact the fragile arrangements the United States has worked out with the global community around protections for personal data. The most prominent example is the EU-U.S. Privacy Shield, which replaced the invalidated “Safe Harbor” framework and currently allows hundreds of multinationals to send personal data outside of the European Union to the United States. The principles underlying Privacy Shield rely on commitments the United States made to the European Commission about safeguards for personal data, such as limitations on law enforcement’s and the intelligence community’s access to data about European citizens. Should the United States plainly reject these commitments or even weaken them, the fate of Privacy Shield could become immediately imperiled. Last week’s International Association of Privacy Professionals Europe Data Protection Congress in Brussels left many with questions about the future of Privacy Shield.
As it happens, the first annual joint review of Privacy Shield will occur within the next six or so months and the U.S. delegation will have to convince its European counterparts that America does and will continue to adequately protect personal data. “At this meeting,” said Isabelle Falque-Pierrotin, the head of the Article 29 Working Party and French data protection authority, “we will estimate if the commitments of the U.S. government are real, are effective, in reality or not.” Since cross-border transfers of data are an important facet of business for so many U.S. companies, the Trump Administration may work to preserve Privacy Shield on the basis of promoting job growth and a strong economy. Or perhaps it will choose to pursue its national security objectives with little regard for Privacy Shield. It’s just too early to tell.
Pay Attention Leading Up to Inauguration Day
To echo the conclusions of so many industry commentators attempting to predict what will happen under the Trump Administration, this will be a wait-and-see game. Most importantly for now, keep an eye out for activity from Mr. Trump’s transition team. The experts he taps to advise on policy issues, and the people he chooses to lead important government agencies such as the FBI, FTC and FCC, and the Commerce and Justice Departments, could have a dramatic influence on our domestic policies and international posture in the areas of cybersecurity and privacy. What seems clear from today’s vantage point is that these are issues sure to receive a lot of attention from the Trump Administration, for better or for worse.