Data Breaches

On March 15, 2022, President Biden signed the Consolidated Appropriations Act 2022, a $1.5 trillion omnibus spending package to fund the government through September 2022.  The omnibus spending package includes the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (the “Act”), which establishes two cyber incident reporting requirements for covered critical infrastructure entities:  a 24-hour requirement to report any ransomware payments to the U.S. Cybersecurity and Infrastructure Security Agency (“CISA”) and a 72-hour requirement to report all covered cyber incidents to CISA.  These requirements will take effect upon the issuance of implementing regulations from the Director of CISA.
Continue Reading President Biden Signs Critical Infrastructure Ransomware Payment and Cyber Incident Reporting into Law

In early February, the Department of Homeland Security Cybersecurity & Infrastructure Security Agency (“CISA”) announced the publication of a joint cybersecurity advisory observing “an increase in sophisticated, high-impact ransomware incidents against critical infrastructure organizations globally” during 2021.  The report—which was coauthored by cybersecurity authorities in the United States (CISA, the Federal Bureau of Investigation, and the National Security Agency), Australia (the Australian Cyber Security Centre), and United Kingdom (the National Cyber Security Centre)—emphasizes that the continued evolution of ransomware tactics and techniques throughout the past year “demonstrates ransomware threat actors’ growing technological sophistication and an increased ransomware threat to organizations globally.”
Continue Reading CISA Issues Joint Cybersecurity Advisory on 2021 Ransomware Trends and Recommendations

In a new post on the Covington Digital Health blog, our colleagues discuss recently announced Federal Trade Commission (“FTC”) guidance meant to help companies determine their obligations under the Health Breach Notification Rule (the “Rule”).  The guidance follows the FTC’s September 2021 Policy Statement, which expanded the Rule’s application…
Continue Reading FTC Releases New Health Breach Notification Rule Guidance, Targets Health Apps and Connected Devices

On September 21, 2021, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued an “Updated Advisory on Potential Sanctions Risks for Facilitating Ransomware Payments” (the “Updated Advisory”).  The Updated Advisory updates and supersedes an earlier OFAC Advisory released on October 1, 2020, and is directed toward not only organizations victimized by ransomware attacks, but also financial institutions, cyber insurance firms, and forensic and incident-response firms that assist organizations victimized by ransomware attacks.

The Updated Advisory is largely consistent with the previous version released in October 2020, restating the U.S. government’s opposition to ransomware victims making payments to cyber threat actors and making clear OFAC’s commitment to bringing enforcement actions in connection with such payments when they constitute U.S. sanctions violations.  However, the Updated Advisory adds important new guidance on “the proactive steps companies can take to mitigate [sanctions enforcement] risks,” including implementing strong cybersecurity practices before an attack; and promptly reporting a ransomware attack to, and engaging in timely and ongoing cooperation with, law enforcement or other relevant agencies.  Taking these steps would constitute “mitigating factors” in any OFAC enforcement action resulting from sanctions violations in connection with ransomware payments.

In conjunction with the new Advisory, OFAC for the first time designated for sanctions a Russian cryptocurrency exchange, SUEX OTC, that OFAC alleges has been involved in facilitating numerous ransomware payments for malicious cyber actors.  As a result of this designation, U.S. persons (that is, all individual U.S. citizens and permanent residents, U.S.-incorporated entities and their branch offices, and anyone physically within the United States) are now prohibited from engaging in or facilitating virtually all transactions with or involving SUEX OTC.Continue Reading OFAC Issues Updated Guidance on Ransomware Payments

On September 15, the Federal Trade Commission (“FTC”) adopted, on a 3-2 party-line vote, a policy statement that takes a broad view of which health apps and connected devices are subject to the FTC’s Health Breach Notification Rule (the “Rule”) and what triggers the Rule’s notification requirement.

The Rule was promulgated in 2009 under the Health Information Technology for Economic and Clinical Health (“HITECH”) Act.  Under the Rule, vendors of personal health records that are not otherwise regulated under the Health Insurance Portability and Accountability Act (“HIPAA”) are required to notify individuals, the FTC, and, in some cases, the media following a breach involving unsecured identifiable health information.  Third-party service providers also are required to notify covered vendors of any breach.
Continue Reading FTC Adopts Policy Statement on Privacy Breaches by Health Apps and Connected Devices

There have been many headlines today about the UK Government’s plans to reform UK data protection law. We are still reviewing the (near 150-page) consultation document, but set out below a dozen proposals that we thought might pique the interest of readers of our blog.
Continue Reading 12 Eye-Catching Proposals In The UK Government’s Plan To Reform UK Data Protection Law

Until now, damages claims awarded by German courts pursuant to Article 82 of the General Data Protection Regulation (“GDPR”) – in particular, claims for non-material damages – have been relatively low.  This restrained approach thus far has been predicated primarily on the position that German law requires a serious violation of personality rights to justify higher claims for non-material damages.  Two recent cases decided by regional courts illustrate and confirm this prevailing stance.  However, a more recent decision issued by the Federal Constitutional Court indicates that views in Germany may be evolving on this topic, and courts may soon be willing to entertain higher damages claims.
Continue Reading A New Day for GDPR Damages Claims in Germany?

On January 18, 2021, the European Data Protection Board (“EDPB”) published its draft Guidelines 01/2021 on Examples regarding Data Breach Notification (“Guidelines”) (available here).  The Guidelines aim to assist data controllers in responding to and assessing the risk of personal data breaches, providing “practice-oriented, case-based guidance” which draws from the experiences of European supervisory authorities since the EU General Data Protection Regulation (“GDPR” or “Regulation”) went into effect in 2018.

The Guidelines are currently open for public consultation until March 2, 2021.  In this blog post, we summarize a few key takeaways from the Guidelines.Continue Reading EDPB Publishes Draft Guidelines on Data Breach Notification Examples

On October 1, 2020, the Hamburg Data Protection Authority (“Hamburg DPA”) fined H&M, the Swedish clothing company, over €35 million for illegally surveilling employees at its service center in Nuremberg.  This fine is the largest financial penalty issued by a German DPA to date for a violation of the European General Data Protection Regulation (“GDPR”), and the second highest in Europe issued by any DPA (although other DPAs have announced their intention to issue other larger fines).
Continue Reading H&M Receives Record-Breaking Fine for Employee Surveillance in Violation of the GDPR

On May 8, 2020, the Federal Trade Commission (“FTC”) issued a notice soliciting public comment regarding whether changes should be made to its Health Breach Notification Rule (the “Rule”).  The request for comment is part of a periodic review process “to ensure that [FTC rules] are keeping pace with changes in the economy, technology, and business models.”

The Rule, which first went into effect in 2009, applies only to vendors of personal health records (“PHRs”) and other related entities that are not subject to the Health Insurance Portability and Accountability Act (“HIPAA”).  A PHR is an electronic record of individually identifiable health information “that can be drawn from multiple sources and is managed, shared, and controlled by or primarily for the individual.”  See 16 C.F.R. § 318.2(d).  Under the Rule, PHR vendors and related entities must notify individuals, the FTC, and possibly the media within 60 days after discovering a breach of unsecured personally identifiable health information, or within 10 days if more than 500 individuals are affected by the breach.
Continue Reading FTC to Consider Changes to the Health Breach Notification Rule