Would you dig a moat to protect your house from burglars? Of course not. Why, then, do we use similarly archaic means like the alphanumeric identifier and the password to protect our electronic data?
Change is coming, however. A number of intrepid companies are now making use of technological advances in biometric identification—unique physical attributes such as fingerprints, facial structure and iris scans—as an alternative or added layer of authentication and fraud prevention. While public sentiment surrounding the use of biometric identification as a means of security authentication appears to be shifting from stark skepticism to cautious acceptance, companies need to be aware of the privacy concerns and new potential theories of liability they will face when establishing biometric identification programs.
Given the limited use of such programs in the United States to date, it is instructive to look to India, where the Unique Identification Authority of India (UIDAI) is home to the largest biometric identification program ever assembled, with biometric information for more than 940 million individuals. India’s foray into biometric identification began in 2009 with the creation of UIDAI, whose goal is to provide every Indian resident with a biometrically secured form of identification known as “Aadhaar.” UIDAI collects fingerprint, iris and demographic data, along with a photograph for each applicant, and correlates that information with a 12-digit identification number that can be used as universal proof of identity for a range of public or private services, from obtaining social assistance funds to opening a bank account. Each applicant’s information is stored in a centralized database that allows for real-time biometric authentication in the event an Aadhaar number requires confirmation.
As the project progresses, it promises to provide all Indian residents with digital, easily verifiable and – most importantly – universal identification. Identification is especially valuable to India’s lower-income population, most of whom do not have other reliable means to confirm their identities, which could delay and/or preclude access to government assistance programs and prevent use of private sector services such as banking.
As promising and ambitious as the Aadhaar project is, questions regarding individuals’ privacy rights and security of the information provided to UIDAI loom large over the project. UIDAI’s critics raise concerns about the potential for misuse of enrollee’s biometric information, as well as the inevitable threats of hacking and data theft. With so many accounts and services tied to a single unique identifier, Aadhaar may unintentionally serve as a gateway to increased state surveillance.
In addition, the sensitivity of the biometric information and centralized Aadhaar database mean Aadhaar could become a prime target for hackers and identity thieves. The July 2015 breach affecting the U.S. Office of Personnel Management, which resulted in the suspected theft of 5.6 million government workers’ fingerprints, shows how attractive such information can be.
Biometric identification’s greatest strength also has the potential to be its greatest weakness. While intrinsic physiological characteristics—like fingerprints and iris scans—are unique and more difficult to forge than a username and password combination, these same traits can make biometric information difficult to replace in the event of theft. Obviously, an eye or a fingerprint cannot be replaced as easily as a password. To achieve long-term viability, UIDAI will need to ensure that the biometric information it collects is subject to strict information security protocols in order to minimize the risk of unauthorized access.
Yet despite the unique, sensitive nature of biometric information and the vast scope of the program, India has not yet passed comprehensive privacy legislation governing the protection and permitted use of data collected in connection with the Aadhaar program. Similarly, limited regulations govern the protection and use of biometric information in the United States. As of January 1, 2016, only seven states – Connecticut, Iowa, Nebraska, North Carolina, Oregon, Wisconsin and Wyoming—consider biometric information to be “personally identifiable information” that would trigger a private entity’s notification obligation in the event of a breach. Just three states—Connecticut, Oregon and Wyoming – enacted legislation to expand the definition to include biometric information this year. Accordingly, a breach of highly sensitive, unique biometric information could occur, but a company would have no legal obligation to notify the individual that their information had been compromised.
Only two states (Texas and Illinois) have laws specifically regulating the collection and use of biometric information by private companies outside the education industry. The Illinois Biometric Information Privacy Act, 740 ILCS 14 et seq. (BIPA) provides that a private entity must notify an individual and obtain consent to collect, capture, purchase or otherwise obtain a person’s biometric identifier or biometric information. BIPA also prohibits the sale, lease, trade or profiting from a person’s biometric identifier or biometric information, without exception, and requires that a business in possession of biometric data develop a written policy concerning biometric data retention and deletion. BIPA provides a private right of action, and recovery of liquidated damages in the amount of $1,000 per negligent violation, and $5,000 per intentional or reckless violation of BIPA.
Meanwhile, the Texas Business and Commercial Code Annotated, §503.001, Texas’ biometric protection law, contains some of the same protections as BIPA, but does not contain the same requirements that notice and consent need to be in writing, nor does it require the disclosure of the reasons for collecting biometric information and how long the information will be stored. The Texas Code also provides that a party may sell, lease or disclose biometric identifiers in certain limited circumstances. The Texas Code provides a penalty cap of $25,000 per violation, and permits the Texas attorney general to bring a civil action to collect that penalty rather than a private right of action.
With liquidated damages per violation, BIPA has become a popular tool over the last year for consumer class action attorneys. Facebook and Shutterfly have been sued in Illinois for alleged violations of BIPA for the purported unauthorized creation, collection and storage of users’ facial geometry, a form of biometric information, without consent. Additional actions are likely to follow as more companies—like MasterCard and Deutsche Bank, two companies that have recently announced they are (or are considering) implementing biometric identification programs—enter this domain.
As individual states begin to adopt standards concerning the use and disclosure of biometric information, companies that maintain biometric identification programs will need to keep up with the changing regulatory landscape in much the same way that companies have navigated evolving privacy and breach notification standards over the last 12 years. At the same time, legislation requiring the protection of biometric information and dictating the permitted uses of that information could lead to increased use of biometric identification programs. Companies would have clear guidelines to follow when implementing biometric identification programs, and consumers would know how their information was being used and protected, instilling greater confidence in providing such information for use in such programs. Lastly, companies should seize the opportunity to partner with government and global experts in privacy law and risk management to become leaders in in the adoption of biometric identification.
About the Authors
Marcello Antonucci (left) is a claims manager for technology, media and business services at Beazley Group, and is experienced in privacy and data security. John P. Morgan (right) is an attorney with Clyde & Co., focusing on data privacy and security.
(Feature Image Credit: ShutterStock)