G’Day, Australia Approves Breach Notification Rule

G’Day, Australia Approves Breach Notification Rule

Last month, Australia finally amended its Privacy Act to now require breach notification. This proposed legislative change has been kicking around the Federal Government for a few years. Our attorney friends at Hogan Lovells have a nice summary of the new rule.

The good news here is that Australia defines a breach broadly enough to include both unauthorized disclosure and access of personal information. Like the GDPR, Australia also considers personal data to be any information about an identified individual or that can be reasonably linked to an individual.

In real-world terms, it means that if hackers get phone numbers, bank account data, or medical records or if malware, like ransomware, merely accesses this information, then it’s considered a breach.

So far, so good.

There’s a ‘But’

However, the new Australian requirement  has a harm threshold that also has to be met for the breach to be reportable. This is not in itself unusual in that we’ve seen these same harm thresholds in US states breach notification laws, and even the EU’s GDPR and the NIS Directive.

In the Australian case, the language used is that the breach will “likely to result in serious harm.”  While not explicitly stated, the surrounding context in the amendment says that breach would have to cause serious physical, psychological, emotional, economic, reputational, and financial harm or other effect that a “reasonable” person would agree.

By the way, this is also similar to what’s in the GDPR’s preamble.

The Australian breach notification rule, though, goes further with explicit remediation exceptions that give the covered entities – privacy sector companies, government agencies, and health care providers – even more wiggle room. If the breached entity can show that they have taken actions involving the disclosure or access before it results in serious harm, then they don’t have to report it.

I suppose you could come up with scenarios where there’s been, say, limited exposure of passwords from a health insurance company’s website, the company freezes the relevant user accounts, and the instructs affected individuals to contact them about resetting passwords. That might be a successful remediation.

You can see what the Australian regulators were getting at. By the way, I don’t think this rule is as “floppy” as one publication called the notification criteria. But it does give the covered entities something of a second chance.

Anyway, if there’s a harmful breach event, then Australian organizations will have to notify the regulators as soon as possible after discovery. They’ll need to provide them with breach details, including the information accessed, as well as steps affected individuals should take.

The Australian breach notification rule is set to go into effect in a few weeks, and there will be a one-year grace period from that point. Failure to comply can result in investigations, forced remedial actions, and fines or compensations.