Privacy and Information Security

In an aggressive expansion of its security and privacy enforcement programs, on September 15, 2021, the FTC issued what it characterized as a “Policy Statement” reinterpreting an old rule about personal health records.

First, some background. In 2009, Congress directed the FTC to create a rule requiring companies to provide notice when there

Jessica L. Rich and Laura Riposo VanDruff, Two Former Senior FTC Officials Further Bolstering Kelley Drye’s Privacy and Advertising PracticesWe are thrilled that Jessica Rich and Laura Riposo VanDruff have joined the firm’s Privacy and Advertising practice groups. Both attorneys are former top officials at the Federal Trade Commission (FTC), with Rich having served as Director of the Bureau of Consumer Protection (BCP) and VanDruff as an Assistant Director in BCP’s Division of Privacy

The California Office of the Attorney General has published a list of recent CCPA enforcement examples on its website.  Each example summarizes the AG’s allegation of noncompliance and the steps that the companies took to cure the alleged noncompliance.

Under CCPA, companies have 30 days to cure noncompliance after which the California AG may initiate a civil action for civil penalties not to exceed $2,500 for each violation or $7,500 for each intentional violation.  In each example made public by the California AG, the AG stated that the target of the enforcement action cured the violation and the California AG did not assess penalties.  In January 2023, however, the right to cure will sunset when the CPRA takes effect.


Continue Reading CCPA Update: California AG Releases List of Enforcement Actions 

The Colorado Legislature recently passed the Colorado Privacy Act (“ColoPA”), joining Virginia and California as states with comprehensive privacy legislation. Colorado Governor Jared Polis signed the bill (SB 21-190) into law on July 7, and ColoPA will go into effect on July 1, 2023.

How does the measure stack up against the VCDPA and the CCPA (as amended by CPRA)? The good news is that, in broad terms, ColoPA generally does not impose significant new requirements that aren’t addressed under the CCPA or VCDPA, but there are a few distinctions to note..
Continue Reading Privacy Law Update: Colorado Privacy Bill Becomes Law: How Does it Stack Up Against California and Virginia?

Last year’s voter guide to California Proposition 24, the California Privacy Rights Act (CPRA), included a stark argument against enacting the privacy ballot initiative because it did not go far enough to protect employee privacy.  “Currently, employers can obtain all kinds of personal information about their workers and even job applicants,” the argument against Proposition

Update: Governor Polis signed SB 21-190 into law on July 7, 2021, see our updated blog post here.

The Colorado Legislature recently passed the Colorado Privacy Act (“ColoPA”), joining Virginia and California as states with comprehensive privacy legislation. Assuming Colorado Governor Jared Polis signs the bill (SB 21-190) into law, ColoPA will

Just a few months after California officials announced the nominations of the inaugural Board members of the California Privacy Protection Agency (“CalPPA”), the CalPPA released the agenda for its first board meeting on June 14, 2021. The meeting will be held remotely in accordance with California Executive Order N-29-20, but the public may still

The California Privacy Rights Act (CPRA), effective January 1, 2023, adds “contractors” to the list of entities that a business may entrust with customer data.  So what is a “contractor?”  And how are “contractors” different from other entities described by California privacy law, such as “service providers” or “third parties?”

As it turns out, the answer is surprising.  Contractors are nearly identical to service providers, with just two differences:  contractors are not data processors; and contractors must make a contractual certification in CCPA contracts.  Moreover, contractors are not even new entities, and were already described in existing California privacy law.

Origins of “Contractors” in CCPA

To help explain the origins of the new contractor classification, we start with the California Consumer Privacy Act (CCPA).  Under the CCPA, now in effect, each disclosure of personal information from a covered business to another entity is regulated, either via consumer opt out preferences or via contractual restrictions.  Altogether, there are three potential data flows described in the CCPA:  business to third party, business to service provider, and business to a person who is not a third party.  We describe each in turn:

  • Business to Third Party:  First, when a business discloses personal information to a third party, this constitutes the “sale” of personal information (unless an exception applies, such as in the context of an intentional disclosure).  The CCPA grants consumers the right to opt out of such sales of their personal information to prevent these data flows.

As an example, selling a marketing list to a third party or sharing profile information with an adtech partner in most cases would be considered a sale of personal information to a third party.

  • Business to Service Provider:  Second, when a business discloses personal information to a service provider, no “sale” occurs and there is no right of consumers to opt out.  The requirements for the recipient to be a service provider are that (1) the service provider processes personal information on behalf of the business, and (2) the service provider agrees to retain, use, or disclose the personal information only for business purposes specified in a written contract.

Service providers provide technical, professional, and other business support to the business.  For example, a service provider might offer various services such as cloud-based servers or software, consulting, or e-commerce fulfillment services.

  • Business to a Person Who Is Not a Third Party:  Finally, there is a rarely discussed third option in the CCPA.  The CCPA states that any recipient of personal information that agrees to certain enhanced contractual terms is not a third party.  This third category requires that the recipient agree to contractual terms that mirror service provider contractual terms, along with three additional terms:  (1) to refrain from selling the personal information, (2) to refrain from retaining, using, or disclosing the information outside the direct business relationship between the recipient and the business, and (3) to certify that the recipient understands the above contractual restrictions.

This third option is significant to avoid the “sale” of personal information.  If the recipient is not a third party, then a sale can only occur if the recipient is a “business” under CCPA.  In many cases, the recipient will not be a business either, typically because the recipient does not determine the purposes and means of processing the personal information.

As an example, if an authorized reseller furnishes a manufacturer with a list of new orders for fulfillment, and the manufacturer agrees to use the list only to fulfill orders, the manufacturer is not a third party.   Because the manufacturer does not determine the purposes and means of processing the personal information it receives, the manufacturer is not acting as a “business.”  No sale occurs.

Similarly, if an identity verification service sends personal information to a company to assist that company with confirming the identity of an applicant for service, and the company agrees contractually to limit its use and disclosure of the information for business purposes, the recipient is not a third party or business and no sale occurs from the identity verification service to the business.

Here’s a summary of the entities that may receive personal data under the CCPA:
Continue Reading CPRA Update: What is a “Contractor?”

Ad Law Access PodcastIn April, Law360 published the article “Deepfake Best Practices Amid Developing Legal Practices,” co-authored by partner John Villafranco and associate Rod Ghaemmaghami. The article provides an analysis of deepfake use cases, describes legal tools available to protect against harmful uses of the technology, and suggests some best practices for responsible use of

Smart (CA) TVs Are Listening: California Assembly Passes Voice Recognition Device Bill Headed to Senate

The California Assembly recently passed AB-1262 updating an existing law to further limit the use of personal information collected through connected TVs and smart speaker devices. Specifically, the bill prohibits:

  • Operating a voice recognition feature of a connected TV or