United States

On January 18, the Federal Trade Commission released its annual Privacy and Data Security Update, highlighting its enforcement efforts in 2017.  The report discusses significant enforcement efforts in the areas of privacy, data security, credit reporting and financial privacy, international enforcement, children’s privacy, and telemarketing.  The report also highlights…
Continue Reading FTC Releases 2017 Privacy and Data Security Report

On January 9, the House of Representatives passed the Cyber Vulnerability Disclosure Reporting Act by voice vote.  The Act directs the Secretary of the U.S. Department of Homeland Security (“DHS”) to prepare a report describing the policies and procedures that DHS developed to coordinate the cyber vulnerability disclosures.  Under the Homeland Security Act of 2002 and the Cybersecurity Information Sharing Act of 2015 (“CISA”), DHS is responsible for working with industry to develop DHS policies and procedures for coordinating the disclosure of cyber vulnerabilities.
Continue Reading House Passes Cyber Vulnerability Disclosure Reporting Act

Last week, U.S. Customs and Border Protection (“CBP”) released a revised Directive governing searches of electronic devices at the border.  These are the first official revisions CBP has made to its guidelines and procedures for devices since its 2009 Directive.  The new Directive is intended to reflect the evolution of technology over the intervening decade, and CBP’s corresponding need to update its investigative techniques.

Notably (and as in previous CBP Directives), the new Directive does not require officials to obtain a warrant before conducting searches of travelers’ devices—even if the traveler being searched is an American—based on CBP’s position that searches and seizures at the border are exempt from the Fourth Amendment’s “probable cause” requirement.  CBP nevertheless acknowledges that its searches must still meet the Fourth Amendment’s “reasonableness” requirement, which the self-imposed restrictions contained in the Directive are meant to achieve. 
Continue Reading CBP Revises Rules for Border Searches of Electronic Devices

On December 1, 2017, the High Court of England and Wales found the fourth-largest supermarket chain in the UK, Wm Morrisons (“Morrisons”), vicariously liable for a data breach caused by the intentional criminal actions of one of its employees, namely the leaking of payroll information online.

The breach affected almost 100,000 Morrisons employees and the action, brought by 5,518 former and current employees, is considered to be the first of its kind in the United Kingdom. The data compromised in the breach included personal data such as names, addresses, and bank account details.Continue Reading English High Court Finds Supermarket Liable for Data Breach by Employee in First Successful Privacy Class Action

A recent District of New Jersey case emphasizes that while, under the FCC’s 2015 interpretation of the law, a customer has a broad right to revoke consent to receive automated calls and texts under the Telephone Consumer Protection Act (“TCPA”), the manner in which the consumer seeks to revoke his or her consent must be reasonable.

On November 27, 2017, a New Jersey federal judge dismissed a putative class action against Kohl’s, rejecting the plaintiff’s assertion that her sentence-long opt-out replies to automated text message “sales alerts” were reasonable when she was presented with other clear and simple opt-out mechanisms.
Continue Reading District Court Rejects Consent Revocation Claim Under TCPA

On Wednesday, the Supreme Court heard oral arguments in Carpenter v.  U. S., a case that involved the collection of 127 days of Petitioner Thomas Carpenter’s cell site location information as part of an investigation into several armed robberies.  We attended the argument to gain any insights into how the Supreme Court may resolve this important case.

The central issue in the appeal is whether the government can access this type and amount of individual location data without a warrant.  But an equally important issue is whether the Supreme Court should reevaluate the “third-party doctrine” exception to the Fourth Amendment’s warrant requirement in light of dramatic changes in the way individuals interact with technology in the digital era.  The “third-party doctrine” provides that individuals have no expectation of privacy in any information that is voluntarily released to a third party—a mobile-phone provider, cloud service provider, and the like.  The Court’s decision will have major implications for technology companies’ ability to protect customer data against warrantless searches by law enforcement officials.

During the 80-minute, extended oral arguments, the Justices broadly acknowledged that technology has changed dramatically in the decades since the Court originally recognized the third-party doctrine.  Each Justice, however, appeared to place varying weight on the import of that change on current legal standards.  Justices Kennedy and Alito focused on the information itself, rather than the technology, asking whether location information should be considered more sensitive than the bank information that United States v. Miller permitted law enforcement to access without a warrant, suggesting that banking information might be considered more sensitive.  
Continue Reading The Supreme Court Arguments in Carpenter Show that It May Be Time to Redefine the “Third-Party Doctrine”

Earlier this year, the FTC’s staff released a series of blog posts entitled Stick with Security that updated and expanded upon the prior Start with Security best-practices guide for information security practices.  The Stick with Security series draws from FTC complaints, consent orders, closed investigations, and input from companies around the country to provide deeper insights into the ten principles articulated in the Start with Security guide.  These guidelines serve as a set of minimum recommended standards for “reasonable” data security practices by organizations with access to personal data (i.e. information related to consumers and employees), although they can be applied to other types of data as well.  The recommendations are not legal requirements, of course, but it can be useful for companies to consider the views of the FTC’s staff on the practices that are likely to be seen by the FTC as “reasonable.”  This post summarizes the recommendations made by the FTC’s staff in the Stick with Security series.
Continue Reading Key Information Security Pointers from the FTC’s Stick with Security Guidance

FCC Chairman Ajit Pai announced today that at its December 14 open meeting, the FCC will vote on an overhaul of the net neutrality framework adopted by the prior Administration in 2015.  The full text of the draft order will be released tomorrow, but Chairman Pai has made certain key details known today.  The order envisions an expanded role in oversight of Internet Service Providers (“ISPs”) by the Federal Trade Commission—a move which Acting FTC Chairman Maureen Ohlhausen welcomed.

First, as anticipated, Internet Service Providers (“ISPs”) will again be classified as providers of “information services” under Title I of the Communications Act, rather than “telecommunications services” under Title II.  In many ways, in recent years the net neutrality debate in the U.S. has been as much—or some would say, more—about this statutory classification question than it has been about specific net neutrality rules.  
Continue Reading FCC Poised to Release Draft Order on Net Neutrality Overhaul

The White House released on November 15, 2017 the Vulnerabilities Equities Policy and Process for the United States Government (“VEP”) — the process by which the Government determines whether to disseminate or restrict information about new, nonpublic vulnerabilities that it discovers.  This release was motivated by criticism following the allegations…
Continue Reading White House Releases Vulnerability Equities Policy and Processes

The European Commission has today published its Report on the first annual review of the EU-U.S. Privacy Shield (the Report is accompanied with a Staff Working Document, Infographic, and Q&A).  The Commission concludes that Privacy Shield continues to ensure an adequate level of protection for personal data transferred from the EU to Privacy Shield-certified companies in the United States.  With its conclusion, the Commission also makes a number of recommendations to further improve the Privacy Shield framework.  The Report follows a joint press statement by the U.S. Secretary of Commerce and EU Commissioner Jourová on September 21, 2017, closing the review and reaffirming that the “United States and the European Union share an interest in the [Privacy Shield] Framework’s success and remain committed to continued collaboration to ensure it functions as intended.”

Background

The EU-U.S. Privacy Shield is a framework that effects the lawful transfer of personal data from the EEA to Privacy Shield-certified companies in the U.S.  The Privacy Shield framework was unveiled by the EU and United States on July 12, 2016 and the Privacy Shield framework became operational on August 1, 2016.  To date, there are over 2,400 in companies (including more than 100 EU-based companies) that have certified, with 400 applications under review.

The Privacy Shield provides an annual review and evaluation procedure intended to regularly verify that the findings of the Commission’s adequacy decision are still factually and legally justified.  Under the Privacy Shield, an “Annual Joint Review” is conducted by the U.S. Department of Commerce and the European Commission, with participation by the FTC, EU data protection authorities and representatives of the Article 29 Working Party, and “other departments and agencies involved in the implementation of the Privacy Shield,” including the U.S. Intelligence Community and the Privacy Shield Ombudsperson for matters pertaining to national security.  In preparation for the Review, the Commission also sought feedback from a number of trade associations, NGOs, and certified companies.  (See our earlier posts on the purpose of the first annual review here and here.)
Continue Reading EU Commission Concludes Privacy Shield “Adequate” in first Annual Review