Business Lawyers Blog
Acquisitions can significantly enhance a company’s capabilities and market reach, but they also can bring substantial cybersecurity and privacy risks. These risks are particularly pronounced in states like California and Texas, where more stringent data protection requirements and privacy laws apply. Properly addressing these risks is critical to ensuring a smooth transition and maintaining compliance with legal requirements. This article highlights some factors that mitigate post-acquisition cybersecurity and privacy risks, including document retention, records management, legal preservation, and data privacy.
Document Retention
Document retention policies are crucial post-acquisition to mitigate cybersecurity risks and ensure legal compliance. In California, under the stringent provisions of the California Consumer Privacy Act (CCPA) companies must retain personal data only for as long as necessary for disclosed purposes and securely dispose of it thereafter. Similarly, Texas, under its Business and Commerce Code Section 521.052, mandates the protection and proper disposal of sensitive personal information, emphasizing the importance of employing secure document destruction methods. Key strategies include identifying critical data for long-term retention, aligning retention policies with state-specific requirements to avoid penalties, and implementing secure disposal methods to safeguard against unauthorized access to sensitive information.
Records Management
Robust records management is also important to mitigate cybersecurity and privacy risks following an acquisition. In California, businesses must protect personal data under the CCPA to prevent unauthorized access and breaches. Similarly, Texas requires governmental bodies to maintain accurate records per the Texas Public Information Act, emphasizing transparency. Key strategies involve conducting a thorough inventory of records to identify critical documents, implementing a unified records management system for consistency and compliance with state laws, and establishing strict access controls to protect sensitive information.
Legal Preservation
Legal preservation, essential for ongoing or potential litigation, mandates careful adherence to CCPA and Texas discovery rules to avoid severe penalties for evidence spoliation. Effective practices include promptly implementing litigation holds that may apply and collaborating closely with parent-target legal teams to ensure compliance across the business.
Data Privacy
Data privacy emerges as a critical concern during acquisitions, especially in states with robust privacy laws like California and Texas. Under the CCPA and CPRA, California mandates stringent rules for collecting, storing, and utilizing personal data, with provisions granting consumers rights to access, delete, and opt-out of their information’s sale. In Texas, the Texas Identity Theft Enforcement and Protection Act requires businesses to adopt reasonable measures for safeguarding sensitive personal information. Effective strategies may involve conducting comprehensive data privacy assessments to identify vulnerabilities and ensure compliance with CCPA, CPRA, and Texas laws, alongside developing and enforcing privacy policies that align with legal requirements wherever the combined company may operate. Implementing systems to manage and address consumer rights requests under CCPA and other applicable laws is also essential for maintaining compliance and protecting personal data.
Structure Law Group
Navigating the Post-Acquisition Cybersecurity and Privacy Risk landscape requires careful legal oversight. At Structure Law Group, we provide expert guidance tailored to safeguard your business interests. With offices in Silicon Valley, Los Angeles, and Austin, our experienced business attorneys can help your company address all facets of cybersecurity and privacy pre- and post-acquisition. Trust Structure Law Group to navigate these critical issues with precision and diligence, securing your company’s future in a dynamic digital environment. Call us at 408-441-7500 or contact us online for more information.