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Disposal of Computer Systems: Removal of Information

By Michael J. Dunne
August 16, 2006

Your business is in the process of upgrading and replacing its computer assets and deciding what to do with the old servers, computers, and laptops. You might sell them, donate them to charity, or simply toss them in the garbage because they are 5 or more years old. Before you choose any disposal option, however, you should first consider what type of information may be stored on those old computer assets and then determine whether your business has a duty to protect that information as part of the disposal process.

From a privacy perspective, a patchwork of laws and regulations exists at the federal and state levels that, either directly or indirectly, imposes requirements regarding the removal of certain types of information from computer memories in connection with the disposal of such computers by the user. Each such law and regulation focuses on a particular type or types of information that may be generally classified as consumer personal information. The present laws and regulations establish general standards with respect to the removal or protection of such information. None of the present laws or regulations provides specific or definitive requirements or guidance with respect to the steps or manner in which the information must be removed. The obligation to remove the information from computer memories derives from the various information privacy and security laws and regulations that have been enacted to protect personal financial and health information and to prevent identity theft.

The laws and regulations in this area appear, for the most part, to impose their requirements only on those businesses that generate or obtain the information in their normal course of business. However, at least one regulation, the FTC Disposal Rule, may be interpreted to impose its requirements for proper disposal on service providers that are in the business of disposing of electronic media.

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