Big Blue fancies itself as Big Brother

IBM has partnered with Watchfire, a provider of online business management services, to help companies adhere to new privacy standards and data-handling regulations.

With the arrangement, IBM said on Monday that it will be able to help businesses protect customer privacy and shield themselves against liability. Big Blue will base the service on Watchfire's technology to automatically spot threats to identity information.

Harriet Pearson, chief privacy officer for IBM, said in a statement: "The ability to monitor, manage and mitigate the risks related to privacy breaches...can help firms avoid potential customer backlash and litigation."

Recent incidents and legislation have thrust identity management and data protection into the spotlight.

The US Securities and Exchange Commission filed charges against a 19-year-old Pennsylvania man for allegedly stealing another man's identity and then draining his online brokerage account. And a California law that went into affect in July requires that businesses notify customers whenever an attack puts their data in danger. That law, called the California Security Breach Information Act, and the federal Graham-Leach-Bliley Act and the Health Insurance Portability and Accountability Act (HIPAA) are intended to prod the industry to adopt better data-handling practices.

In Monday’s announcement, IBM cited a recent study performed by Watchfire that found two-thirds of websites that collect personal information cannot adequately secure the data. Moreover, 18 per cent of the companies use online forms that could leak information to an attacker.

The new service is designed to automatically sift through the numerous pages that make up an online commerce site and to test all data-gathering procedures.

Robert Lemos writes for CNET News.com