Privacy and Information Security

Last week, the House Committee on Energy and Commerce held a Committee Hearing on the Oversight of the Federal Trade Commission. All five Commissioners attended and their message was largely the same: the FTC needs additional rulemaking and civil penalty authority to better protect consumers, especially as it applies to privacy and data security enforcement.

Privacy and data security were a focus of the Chairman’s opening statements, during which he noted that both were a top priority for the agency. Chairman Simons also discussed the need for the FTC to have jurisdiction over nonprofits and common carriers, imploring Congress to pass legislation giving the agency such authority, along with comprehensive data security legislation. Simons noted that the FTC was watching and assessing the EU’s implementation of its comprehensive privacy law, the General Privacy Data Protection Regulation (GDPR), to see how it may apply to the U.S. and he reaffirmed enforcement of the EU-U.S. Privacy Shield, which the FTC has enforced in the past.

Chairman Simons also referenced the hearings that the Commission will be holding in the fall, emphasizing that he anticipated the agency would benefit from participant input on a number of topics—from merger guidelines to privacy and data security. Simons, a former student of Chairman Pitofsky, noted that the agency held similar hearings during the Pitofsky era that resulted in agency action, such as amendments to the merger guidelines. The Chairman noted that he wanted this year’s hearings to be similarly effective in setting the agency’s future agenda. Continue Reading Big Government? FTC Advocates for More Authority in Congressional Hearing

California recently passed the California Consumer Privacy Act (CCPA), providing new rights for California consumers (broadly defined as California residents) regarding their personal data. The CCPA is modeled after the EU’s General Data Protection Regulation (GDPR), which provides EU citizens with a number of rights related to data processing and imposes specific requirements on companies that process EU citizen data. The new California law provides similar requirements for businesses that collect data from California consumers. The following are some key points of comparison. Continue Reading GDPR Sidebar: Comparing the California Consumer Privacy Act to the GDPR

On June 28, 2018, Governor Brown signed into law the “California Consumer Privacy Act of 2018.” The legislation was a compromise to avoid a ballot initiative that was more closely modeled after the European Union’s General Data Protection Regulation (GDPR). This Act is scheduled to go into effect on January 1, 2020.

The Act enumerates a number of rights for consumers regarding the privacy of their personal information. Some rights, such as the right to be forgotten or the right to request information disclosure, are reminiscent of those seen in the GDPR, while others, such as the right to opt out of the sale of a consumer’s personal information, are specific to the new law.

Along with identifying consumer rights, the law also imposes requirements on businesses, including those that collect or have collected consumers’ personal information, to make specific disclosures about their personal information practices and to respond to consumer requests. Importantly, the definition of “personal information” is broadly defined to include common information, such as a name or email address, as well as more specific information, such as biometric information and geolocation data, although publicly available information is not included. Continue Reading California Enacts Sweeping Privacy Law; Will Other States Follow?

Under the GDPR, processors must have a lawful basis for processing any data of an EU data subject. Consent is one of six lawful bases[1] under the GDPR, and in this installment of GDPR SIDEBAR, we’ll cover best practices that can help achieve an acceptable level of compliance with GDPR consent requirements.

Valid consent under the GDPR must be: (1) freely given; (2) specific; and (3) informed. And a consumer must make a clear, affirmative action to consent. This means pre-populated check boxes aren’t going to count as valid consent for GDPR purposes. Here are a few tips for meeting GDPR’s consent requirements:

  • Make sure consent is specific. Identify what type of processing the data subject is consenting to, so that the data subject understands exactly what data is collected and how it is used. Example 1 provides a consent mechanism for each specific type of communication (text message, email, etc.). This makes it clear to the data subject what she is signing up for when she consents to processing.

  • Make sure consent is unbundled. Provide a separate consent mechanism for each type of processing the data is expected to be used for. Do not bury consent in an agreement for terms and conditions or a general privacy policy. Example 2 offers unbundled options for separately consenting to marketing messages and the website’s terms and conditions.

Continue Reading GDPR SIDEBAR: Best Practices for Complying with GDPR Consent Requirements

On May 29, Colorado Governor John Hickenlooper signed into law HB18-1128 to strengthen data breach notification requirements for companies and government entities collecting and maintaining personal information from Colorado residents.

Effective September 1, covered entities will be required to notify individuals within 30 days of discovery of a security breach, unless the entity is notified that such a disclosure will impede a criminal investigation. Existing law requires notification to be made “in the most expedient time possible, and without unreasonable delay.” Republican state representative and bill co-sponsor Cole Wist stated the term “reasonable” was “too subjective and loose,” and could prevent consumers from acting quickly to prevent identity theft.  This makes the new law one of the strictest data breach notification laws in the country.  The following identifies pertinent changes to existing law.

Mandatory Information Security Procedures or Programs

Businesses must implement “reasonable” information security procedures or programs to protect the personal data they have – including data that has been shared with third parties – from unauthorized access, use, modification, disclosure, or destruction. Businesses that maintain paper or electronic documents containing customer personal information must develop a written policy for the destruction of such documents once they are no longer needed. Continue Reading Colorado Reaches New High with Strict Data Breach Notification Law

Less than one week after replacing the now defunct Article 29 Working Party (WP29), the European Data Protection Board (EDPB) has adopted new guidelines on the EU General Data Protection Regulation (GDPR) and issued a statement on the ePrivacy Regulation revision.

What is the European Data Protection Board? How is It Different from the Article 29 Working Party?

The EDPB is made up of the head/representative of each of the EU national supervisory authorities, the European Data Protection Supervisor, and a non-voting member of the European Commission. The Board is tasked with ensuring the consistent application of GDPR by monitoring and ensuring the correct application of the GDPR, issuing guidelines, recommendations, and best practices regarding GDPR requirements, and approving data protection certification mechanisms encouraged under the GDPR, among other things. While the structure of the EDPB resembles that of the WP29, unlike the WP29, the EDPB has the power to adopt binding decisions to ensure the correct and consistent application of the GDPR.

What’s New on the European Data Protection Board Front?

The EDPB is carrying out its mandate to ensure a consistent level of data protection for individuals and the consistent application of GDPR by taking following steps:

  • Endorsing GDPR material issued by the WP29 (i.e., WP29 guidelines, recommendations, working documents, and referential).
  • Adopting a draft version of the Guideline on certification, which explains key concepts of certification provisions under GDPR Articles 42 and 43 as well as the scope and purpose of certification. The deadline for comments (which should be sent to EDPB@edpb.europa.eu) is July 12, 2018.
  • Adopting the final version of the Guidelines on derogations applicable to international transfers, which provides guidance on the application of GDPR Article 49 on derogations when transferring personal data to third countries or international organizations.
  • Releasing a statement on the revision to the ePrivacy Regulation, supporting the swift adoption of the new ePrivacy Regulation and offering insights and clarifications on key issues including, preventing the processing of electronic communications on the basis of “legitimate interest” or the general purpose of performance of a contract, ensuring that the new regulation maintains at least the current level of protection under the ePrivacy Directive, providing protection for all electronic communications, encouraging the use of anonymized electronic communication data, and ensuring that consent is obtained for websites and mobile apps.

How Do These European Data Protection Board Developments Impact My Business?

Now that GDPR is effective, the EDPB is moving swiftly to provide implementation guidance and compliance recommendations. All businesses with an EU footprint should familiarize themselves with and monitor the EDPB website for GDPR guidelines and public consultations.  Given the anticipated end of 2018 entry into force of the ePrivacy Regulation, which will complement the GDPR, companies should likewise scrutinize the EDPB’s recent ePrivacy Regulation statement in relation to their electronic communications practices.

Just when you think you’ve tackled the Wild, Wild West of GDPR and privacy compliance, California decides to mix it all up again.

This November 6th, California voters will decide on the California Consumer Privacy Act (“Act”), a statewide ballot proposition intended to give California consumers more “rights” with respect to personal information (“PII”) collected from or about them.  Much like CalOPPA, California’s Do-Not-Track and Shine the Light laws, the Act will have broader consequences for companies operating nationwide.

The Act provides certain consumer “rights” and requires companies to disclose the categories of PII collected, and identify with whom the PII is shared or sold. It also includes a right to prevent the sale of PII to third parties, and imposes requirements on businesses to safeguard PII.  If passed, the Act would take effect on November 7, 2018, but would apply to PII collected or sold by a business on or after nine (9) months from the effective date – i.e., on August 7, 2019.

Who is Covered?

The Act is intended to cover businesses that earn $50 million a year in revenue, or businesses that “sell” PII either by (1) selling 100,000 consumer’s records each year, or (2) deriving 50% of their annual revenue by selling PII. These categories of businesses must comply if they collect or sell Californians’ PII, regardless of whether they are located in California, a different state, or even a different country. Continue Reading SADDLE UP AMERICA: California Aims to Pass its Own GDPR Law

You’ve probably heard of the dreaded four-letter word – GDPR.  Companies around the globe had been preparing for the May 25th implementation date for quite some time.  But U.S.-based companies with no apparent EU presence may not have thought twice about whether the data protection law across the pond even applies to them.  Let’s face it, we have enough federal and state laws here in the U.S. to worry about.  But now that the GDPR dust has settled a bit, these U.S. companies may want to take a closer to look to confirm they aren’t captured within GDPR’s sweeping scope.

In this first installment of GDPR SIDEBAR, we address the fundamental threshold question of whether and to what extent a U.S.-based company must comply with the GDPR.  [click here for a primer on GDPR]

Continue Reading GDPR SIDEBAR: Should You Be Complying with the New Data Protection Law?

Earlier this week, the FTC settled its case with BLU Products, Inc., a cell phone company the FTC claimed misled consumers about its privacy and data security practices. According to the agency, the company represented that it did not collect unnecessary personal information and that it imposed specific data security procedures to protect consumers’ personal information. But the FTC claimed not so fast, alleging that BLU allowed one of its partners, an advertising software company, to collect sensitive consumer information such as text message contents and call logs with full telephone numbers. The FTC also alleged that BLU failed to implement the security features it represented to consumers, allowing the company’s devices to be subject to security vulnerabilities that could allow third parties to gain full access to the devices.

In settling the case, BLU agreed not to misrepresent its data collection or data security practices. The order also requires BLU to clearly and conspicuously disclose: (1) all of the “covered information” that the company collects, uses, or shares; (2) any third parties that will receive this “covered information”; and (3) all purposes for collecting, using, or sharing such information. This disclosure must be separate from the company’s privacy policy or terms of use and the company must obtain the consumer’s affirmative express consent to the collection, use, and sharing of such information. “Covered Information” is defined as geolocation information, text message content, audio conversations, photographs, or video communications from or about a consumer or their device. Continue Reading Why So BLU?: FTC Settles Privacy and Data Security Claims with Mobile Company; Fencing-In Relief Requires Consumer Opt-In to Data Sharing

FTC Commissioner Terrell McSweeny is scheduled to resign effective April 28 and may leave with acting Chairman Maureen Ohlhausen as the sole commissioner. Law360  published an article by partner John Villafranco and professor Stephen Calkins that discusses whether the FTC can take formal action by a 1-0 vote and when does a commission cease being a commission? To read the full article, please click here.