Privacy & Information Security Law Blog

On December 7, 2009, the Business Forum for Consumer Privacy released “A Use and Obligations Approach to Protecting Privacy: A Discussion Document" at the Federal Trade Commission’s roundtable entitled “Exploring Privacy.”  The roundtable was a first step in the FTC’s effort to re-examine privacy protection in light of rapid, dynamic changes in technology, advances in data analytics and increasingly ubiquitous data collection and use.  The paper is the product of a three year effort on the part of the Forum to develop an approach to protecting data that meets the needs of businesses and consumers in this emerging environment.  The paper may be found at www.informationpolicycentre.com.

On December 17, 2009, the Electronic Privacy Information Center (“EPIC”) filed a complaint with the FTC claiming that Facebook is engaging “unfair and deceptive trade practices” by changing its privacy policies.  Notably, the changes allow anyone who browses the Internet to view a Facebook user’s name, profile picture, gender, geographic region and list of friends.  Facebook has stated that it implemented these changes to make it easier to find individual users among the estimated 350 million Facebook users.

A class action complaint filed on December 9, 2009, in Illinois federal court alleges that WideOpen West, Finance, LLC ("WOW"), an Internet service provider, violated its users' privacy by "installing spyware devices on its broadband networks."  Valentine v. WideOpen West (N.D. Ill., No. 1:09-cv-07653).  This action against WOW follows the October 6, 2009, dismissal by a district court in California of similar claims against six out-of-state ISP defendants (including WOW) filed in November 2008 by the same lead plaintiff.  The court in Valentine v. NebuAd, Inc. et al. (N.D. Cal., No. 3:08-cv-05113) found that the ISP defendants were not subject to personal jurisdiction in California, leaving the now-defunct NebuAd as the only defendant in that case.  Plaintiff Valentine has now brought this action against WOW in the Northern District of Illinois.

The court in In re Heartland Payment Systems, Inc. Securities Litigation, Civ. No. 09-1043 (D. N.J. Dec. 12, 2009) recently dismissed a class action lawsuit brought by investors in Heartland, a processor of payment card transactions whose stock value dropped significantly after it suffered a data security breach in which hackers allegedly stole 130 million payment card numbers.  The plaintiffs argued that Heartland’s statements to the effect that it had adequate security systems and that it took the issue of computer network security very seriously were fraudulent because Heartland knew it had poor data security and failed to remedy critical problems soon enough to prevent the theft.

The U.S. Supreme Court announced Monday that it will review the Ninth Circuit’s 2008 decision on employee privacy in Quon v. Arch Wireless Operating Co.  In Quon, the Ninth Circuit considered whether the Ontario, California police department and the City of Ontario violated a police officer’s privacy rights by reviewing private text messages the officer sent using a two-way pager issued by the police department.  The police officer had on several occasions exceeded the limit on the text messages provided by the department-paid plan.  Each time, the officer paid for the overage without anyone reviewing his text messages.  When the officer again exceeded the limit, his supervisor requested from the service provider and subsequently reviewed transcripts of the officer’s messages to determine if the messages were work-related.

On Monday, December 7, the Federal Trade Commission began a three-part series of roundtables collectively entitled "Exploring Privacy."  The conference opened with a presentation by Richard M. Smith featuring data flow charts he developed with FTC staff to illustrate the current “personal data ecosystem” and how personal information moves in various online and offline contexts.  The charts that served as the basis for his discussion (available here) offer a sense of the FTC’s understanding of today’s information marketplace.  Other panels covered topics such as consumer expectations, information brokers and online behavioral advertising.

On November 3, 2009, the Higher Regional Court of Düsseldorf (OLG Düsseldorf, Az. I-20 U 137/09) ruled on the duty to verify consent for email marketing with respect to purchased email addresses. According to the Court, a company that purchases email addresses for marketing purposes must verify customer consent itself – the company cannot rely on a data broker’s statement that it obtained the necessary consents.

This decision came in an interim injunction proceeding to cease unsolicited email marketing. The Court ruled in favor of the claimant, finding that the company ...

Senior staff changes at the Federal Trade Commission have enhanced privacy’s profile within the agency.  Jessica Rich is the new Deputy Director of Consumer Protection.  Ms. Rich has been the Acting Associate Director responsible for the Division of Privacy and Identity Protection following nearly a decade as Assistant Director for the Division.  Rich has long been seen as the FTC’s staff’s privacy thought leader.  The new Privacy Division Associate Director is Maneesha Mithal.  Ms. Mithal brings a strong international background to the position.  The new Assistant Director is ...

On November 30, the Council of the European Union agreed to allow U.S. anti-terrorism authorities access to financial data of individuals located in the EU under certain circumstances. Under the agreement, U.S. authorities will continue to have access to data collected by Society for Worldwide Interbank Financial Telecommunication ("SWIFT") after a SWIFT database located in Switzerland becomes active later this year (the data had previously been processed in a database located in the U.S.). The agreement contains restrictions on access to the data that have been negotiated ...

Commissioner Viviane Reding has been chosen as Commissioner for Justice, Fundamental Rights, and Citizenship in the new European Commission that is set to take office in early 2010 (assuming approval by the European Parliament).  Ms. Reding's responsibilities will thus include data protection, including the Commission's ongoing review of the EU framework for data protection.  She is currently EU Commissioner for Information Society & Media, where she oversaw review of the e-Privacy Directive and the EU legislative framework for telecommunications.  Commission President ...