Legal Pitfalls: Why Energy Companies Must Ditch Consumer Privacy Apps During a Cyberattack

In the energy sector, a cyberattack is more than just a technical crisis—it’s a high-stakes moment with far-reaching consequences. Beyond the immediate chaos of containment and remediation, there are legal repercussions, regulatory scrutiny, and reputational risks to manage. In these moments, how your team communicates can make or break your response, not just operationally but legally.

Yet, many energy companies turn to consumer-grade privacy apps for quick communication during a breach. While these tools might seem convenient, they carry significant risks, particularly for highly regulated and sensitive industries like energy. It’s time to rethink this approach and adopt solutions purpose-built for security and compliance, such as secure out-of-band collaboration.

The Hidden Dangers of Consumer Privacy Apps

Consumer privacy apps—think common messaging platforms or file-sharing tools—may seem convenient. However, they bring major risks during a breach, especially for industries with high regulatory demands like energy. Here’s where these tools fall short:

1. Weak Security Features
   
   

• • Limited encryption and insecure data storage leave sensitive information vulnerable to unauthorized access.
    
    
  • Metadata leakage can expose crucial details about who communicated, when, and what was discussed.
    
    

2. Compliance Challenges
   
   

• • The lack of tamper-proof logs and encryption in consumer apps makes regulatory compliance more difficult during or after a breach.
    
    
  • Companies using these tools risk missteps in breach reporting or regulatory audits.
    
    

3. Legal Exposure
   
   

• • Without secure audit trails, proving due diligence in litigation is difficult.
    
    
  • Using non-secure tools during a breach may be cited as negligence, further exposing companies to liability.
    
    

How Consumer Apps Fail Energy Sector Compliance

Compliance with legal and regulatory frameworks isn’t optional for energy companies—it’s essential. Unfortunately, consumer privacy apps are insufficient and often fail to meet the standards set by these frameworks, creating legal and operational risks.

1. Breach Notification Failures: An energy company who has failed to implement a defined out-of-band communications plan with enterprise onboarding and user management capabilities can waste critical time pulling together internal and external parties one at a time via text or consumer messengers.

• CIRCIA (Cyber Incident Reporting for Critical Infrastructure Act of 2022) requires critical infrastructure companies to report cyber incidents to CISA (Cybersecurity and Infrastructure Security Agency) within 72 hours.
  
  
• For publicly owned municipal electricity, gas, and water utilities, their state and local reporting requirements could be even more stringent. Several states require notification in 24 hours.
  
  

2. Non-Compliance with Industry Standards: Consumer apps were never designed to meet data retention, access control and audit trail requirements forcing energy companies to use time consuming and problematic practices to meet compliance while using these “free” tools.

• NERC CIP (North American Electric Reliability Corporation Critical Infrastructure Protection) sets strict retained records requirements for Electricity Asset Owners and Operators for reportable incidents, BCSI data, and tabletop exercises among other things.
  
  
• Publicly traded energy companies face SEC (Securities and Exchange Commission) Cybersecurity Rules, which require timely and accurate disclosures. Over 20 banks have accrued over $3 billion in SEC fines for failing to retain records of WhatsApp communications, for example.
  
  

3. Increased Litigation Risks: Compliance and Legal bodies are warning against the use of consumer tools for official communications as more restrictive guidance is being issued.

• States like California and Illinois allow private lawsuits for delayed or inadequate breach notifications. Using insecure apps during a breach may lead to delayed responses and lawsuits.
  
  
• Communication on consumer apps is often discoverable during litigation, and insecure logs may expose sensitive details that harm the company’s case.
  
  
• The Department of Justice has cautioned against Signal and WhatsApp specifically and require companies to make messaging platform content available for legal and compliance matters while warning companies that prosecutors won’t accept that they can’t produce communications from third-party apps as reason for non-compliance.
  
  

The dangers of insufficient communication tools are not hypothetical. Cases like the SolarWinds breach highlight what’s at stake. When the breach was shown to have cascaded into many victim’s day to day communications tools like Microsoft and Google—including the federal governments—it forced incident responders out of band and into untested, fragmented consumer tools of choice, preventing collaboration on information and hurting their response.

The Better Way to Handle Breach Communication

Out-of-band collaboration provides an easier alternative by ensuring energy companies have secure communication channels that operate independently of compromised networks. Solutions like ArmorText’s Secure Out of Band Collaboration™ platform are purpose-built to meet the energy sector’s unique needs during a breach.

• End-to-End Encryption: Every message, file, and conversation is protected from unauthorized access.
  
  
• Tamper-Proof Audit Trails: Communications are securely logged and documented for regulatory reporting and litigation defense.
  
  
• Built-In Compliance: Solutions align with frameworks like NERC CIP, SEC, CIRCIA, and other federal and state laws, reducing the risk of penalties.
  
  

For in-house legal teams, secure out-of-band collaboration simplifies compliance, safeguards sensitive communications, and ensures efficient incident response under pressure.

Protect Your Company with Better Communication

Consumer privacy apps might work for casual conversations, but they can expose energy companies to unnecessary risks during a cyber breach. By switching to secure out-of-band collaboration, you protect not only your sensitive data but also your company’s legal and regulatory standing.

Protect your company with secure communication. See how ArmorText’s Secure Out of Band Collaboration™ ensures a stronger breach response—schedule your personalized demo today.