2 May 2013

Privacy Awareness week – a campaign largely championed by countries around the Pacific rim – runs throughout this week.   A related article in the Wall Street Journal  indicates how recent laws  introduced in a majority of US states that prohibit employers searching the social media accounts of their employees, are already being eroded.

Social-media privacy laws enacted last year in California, Illinois, Maryland and Michigan are now being complemented by similar statutes introduced in 35 other states since the beginning of the year.

Watering down of a prohibition on employer-searching has been led by the Federal Financial Industry Regulatory Authority. Its concern is about the misuse of personal accounts. The fear is that protecting employees’ privacy puts investors at risk. If there is uncontrolled posting of financial advice on Facebook or through Twitter, then it will be harder to monitor what employees are pitching to investors, and new channels for Ponzi schemes will arise.

Securities regulators worry that the new laws will make fighting fraud harder if companies cannot follow how their employees may be marketing products.

Supporters of the laws say they are needed to protect employees, and should apply even if the employer is the subject of tweets or other messages made on an employee’s social-networking website.  But financial regulators suggest that the laws “puts customers at risk, as it will be much harder for firms to detect serious problems.”

Justifying the legislation California’s Governor has spoken of protecting “all Californians from unwarranted invasions of their personal social-media accounts”.

Courts haven’t ruled on whether state laws or the financial regulation rules should take precedence over employee privacy.  Inevitably that will be tested before long.

There is little evidence that New Zealanders see a problem of anything like the magnitude of the US.