Cyber­se­cu­ri­ty com­pli­an­ce manage­ment: imple­men­ting legal cyber­se­cu­ri­ty requi­re­ments in a stra­te­gic manner

Cyber­se­cu­ri­ty as a Risk and an Opportunity

As a result, com­pa­nies should take pre­ven­ti­ve action in an effort to check for pos­si­ble risks and thre­ats and pro­tect their cor­po­ra­te struc­tures. Attacks may come in a wide varie­ty of forms. At the tech­ni­cal level, com­pa­nies face risks e.g. from mal­wa­re, iden­ti­ty theft, social engi­nee­ring and advan­ced per­sis­tent thre­ats, which seek to tar­get and obtain spe­ci­fic infor­ma­ti­on. But defi­ci­ent IT secu­ri­ty also poses legal risks, given the incre­a­sing amount of regu­la­ti­on. With nar­rower rules for the imple­men­ta­ti­on of IT secu­ri­ty requi­re­ments, even slight devia­ti­ons may result in seve­re fines or con­trac­tu­al pen­al­ties, even out­side the scope of data pro­tec­tion law. Moreo­ver, if an IT secu­ri­ty inci­dent actual­ly occurs, com­pa­nies will typi­cal­ly face war­ran­ty and dama­ge claims from cus­to­mers and data subjects.

Accord­in­gly, com­pa­nies ope­ra­ting on the mar­ket which plan to suc­cess­ful­ly digi­ti­ze must ensu­re not only that the tech­ni­cal requi­re­ments are imple­men­ted, but that the legal requi­re­ments are satis­fied as well. But doing so is much har­der than one may think, sin­ce the­re is no uni­form sta­tu­te at eit­her the natio­nal or Euro­pean level which defi­nes the gene­ral secu­ri­ty requi­re­ments for com­pa­nies in a bin­ding man­ner. Rather, the legal frame­work is com­pri­sed of many dif­fe­rent indi­vi­du­al regu­la­ti­ons, some of which app­ly to com­pa­nies in gene­ral and some of which app­ly only for spe­ci­fic indus­tries or products.

The use of digi­tal tech­no­lo­gies is a cri­ti­cal suc­cess fac­tor for com­pa­nies and a requi­re­ment for sur­vi­val on the mar­ket in near­ly every sec­tor. As a result, pro­ducts are beco­m­ing incre­a­singly digi­ti­zed and inter­con­nec­ted (e.g. in con­nec­tion with the IoT), and this is true of pro­duc­tion equip­ment as well (e.g. Indus­try 4.0 and Smart Fac­to­ry). The use and exchan­ge of data are no lon­ger limi­ted to indi­vi­du­al com­pa­nies, and are incre­a­singly taking place over the ent­i­re sup­ply chain. As pro­ces­ses beco­me more inter­con­nec­ted, ope­ra­tors are beco­m­ing more depen­dent on one ano­t­her: an IT secu­ri­ty inci­dent for a sin­gle sup­plier could affect the ent­i­re sup­ply chain, and may even affect the safe­ty of a pro­duct on the market.

Cyber­se­cu­ri­ty Com­pli­an­ce Manage­ment Redu­ces Legal Risks

As a result, com­pa­nies need a cyber­se­cu­ri­ty com­pli­an­ce manage­ment sys­tem, both for the com­pa­ny as a who­le and for spe­ci­fic pro­ducts, which iden­ti­fies the legal requi­re­ments and obli­ga­ti­ons app­li­ca­ble to the com­pa­ny and hel­ps with their sub­se­quent imple­men­ta­ti­on. For examp­le, the requi­re­ments con­si­de­red by the cyber­se­cu­ri­ty com­pli­an­ce manage­ment sys­tem may inclu­de rules for the pro­tec­tion of busi­ness secrets and know-how from indus­tri­al espio­na­ge. Here as well, digi­tiz­a­ti­on is play­ing an incre­a­singly signi­fi­cant role, e.g. in con­nec­tion with the use and pro­tec­tion of machine-generated data. Aspects of IT secu­ri­ty law are also com­ing to the fore right now, as have data pro­tec­tion risks sin­ce the intro­duc­tion of the Gene­ral Data Pro­tec­tion Regu­la­ti­on (GDPR). In accordance with Arti­cle 24(1) in con­junc­tion with Arti­cle 32(1) of the GDPR, com­pa­nies are requi­red to pro­vi­de ade­qua­te pro­tec­tion when pro­ces­sing per­so­nal data. The GDPR does not defi­ne any spe­ci­fic mea­su­res, so that the selec­tion of appro­pria­te mea­su­res falls wit­hin the company’s sphe­re of respon­si­bi­li­ty. Given the digi­tal trans­for­ma­ti­on of the auto­mo­ti­ve indus­try, more exten­si­ve regu­la­ti­ons are con­stant­ly being adop­ted for manu­fac­tu­rers and sup­pliers.

IT secu­ri­ty requi­re­ments may also ari­se e.g. from tax regu­la­ti­ons, such as the Tax Code. Com­pa­nies also should not lose sight of indi­rect IT secu­ri­ty requi­re­ments, such as tho­se ari­sing from pro­duct lia­bi­li­ty claims or the law gover­ning war­ran­ties for defects, which was hea­vi­ly amen­ded recent­ly by the Digi­tal Con­tent Direc­ti­ve.

Depen­ding on the indus­try and the pro­duct, the­re may also be spe­ci­fic regu­la­ti­ons for eco­no­mic acti­vi­ties which invol­ve ele­va­ted risk. In the­se cases, law­ma­kers con­si­der the gene­ral regu­la­ti­ons to be insuf­fi­ci­ent and insist upon the satis­fac­tion of stric­ter mini­mum stan­dards in are­as whe­re the risk is par­ti­cu­lar­ly high, sub­ject to clo­ser supervision.

One examp­le is that of the sta­tu­to­ry requi­re­ments for ope­ra­tors of cri­ti­cal infra­st­ruc­tu­re which, in accordance with § 8a(1) Sen­tence 1 of the BSI Act, are requi­red to take “ade­qua­te orga­niz­a­tio­nal and tech­ni­cal pre­cau­ti­ons” in cases invol­ving ele­ments with cri­ti­cal func­tions. Pur­suant to § 8a(3) of the BSI Act, they are also sub­ject to clo­ser super­vi­si­on by the Federal Office for Infor­ma­ti­on Secu­ri­ty (BSI). Germany’s IT Secu­ri­ty Act 2.0, which is cur­r­ent­ly going through the legis­la­ti­ve pro­cess, will inclu­de a who­le seri­es of rele­vant and exten­si­ve chan­ges rela­ting to cri­ti­cal infrastructure.

Ano­t­her examp­le, this time in the field of health care, are digi­tal health app­li­ca­ti­ons and pre­scrip­ti­on health apps, for which spe­cial regu­la­ti­ons have been adop­ted with the ent­ry into effect of the Digi­tal Care Act on 19 Decem­ber 2019. Digi­tal health app­li­ca­ti­ons requi­re appro­val from the Federal Insti­tu­te for Drugs and Medi­cal Devices (BfArM) for which, in accordance with § 139e(2) Sen­tence 2 of Book V of the Social Code, app­li­cants are requi­red to fur­nish docu­men­ta­ti­on that the digi­tal health app­li­ca­ti­on ensu­res “data secu­ri­ty con­sis­tent with the sta­te of the art.” In order to fur­ther spe­ci­fy the requi­re­ments, the Federal Minis­try of Health has adop­ted the Digi­tal Health App­li­ca­ti­ons Ordi­nan­ce pur­suant to § 139e(9) of Book V of the Social Code. This Ordi­nan­ce tigh­tens pro­vi­si­ons of the GDPR, e.g. rela­ting to data trans­fers to third coun­tries, as well as crea­ting exten­si­ve IT secu­ri­ty requi­re­ments via § 4(1) of the Ordi­nan­ce in con­junc­tion with Annex 1.

Con­clu­si­on and First Steps Towards Cyber­se­cu­ri­ty Compliance

Given the com­ple­xi­ty of the cur­rent legal situa­ti­on, and the exis­tence of hid­den or indi­rect IT secu­ri­ty requi­re­ments in some cases, redu­cing legal cyber-risks will be a gro­wing chal­len­ge for com­pa­nies. Com­pa­nies should coun­ter this risk by estab­li­shing a cyber­se­cu­ri­ty com­pli­an­ce manage­ment sys­tem. In doing so, we typi­cal­ly take the fol­lowing steps tog­e­ther with our clients:

  • iden­ti­fy­ing app­li­ca­ble laws and requi­re­ments for each com­pa­ny and product;
  • deri­ving cyber­se­cu­ri­ty requirements;
  • weig­hing risks;
  • deve­lo­ping, adap­ting and docu­men­ting a com­pre­hen­si­ve IT secu­ri­ty concept;
  • con­si­de­ring legal inter­ac­tions (e.g. repor­ting duties, as well as pro­tec­tion of secrets);
  • taking legal mea­su­res to pro­tect the IT secu­ri­ty con­cept (e.g. through non-disclosure agree­ments as well as IT legal inci­dent respon­se);
  • con­ti­nuous moni­to­ring for new regu­la­ti­ons (ear­ly iden­ti­fi­ca­ti­on) and rou­ti­ne super­vi­si­on of implementation.
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