Privacy & Information Security Law Blog

As reported on Hunton’s Employment & Labor Perspectives blog, on October 30, 2023, President Biden issued a wide-ranging Executive Order to address the development of artificial intelligence (“AI”) in the United States. Entitled the Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (the “Executive Order”), the Executive Order seeks to address both the “myriad benefits” as well as what it calls the “substantial risks” that AI poses to the country. It caps off a busy year for the Executive Branch in the AI space. In February 2023, the Equal Employment Opportunity Commission published its Strategic Enforcement Plan, which highlighted AI as a chief concern, and in April 2023, the White House released an AI Bill of Rights. The Executive Order, described as a “Federal Government-wide” effort, charges a number of federal agencies, notably including the Department of Labor (“DOL”), with addressing the impacts of employers’ use of AI on job security and workers’ rights. 

On November 22, 2023, the Artificial Intelligence (Regulation) Bill was introduced into the UK Parliament’s House of Lords. The purpose of the Bill is to make provision for the regulation of AI and for connected purposes. 

On November 27, 2023, the California Privacy Protection Agency (“CPPA”) published its draft regulations on automated decisionmaking technology (“ADMT”). The regulations propose a broad definition for ADMT that includes “any system, software, or process—including one derived from machine-learning, statistics, or other data-processing or artificial intelligence—that processes personal information and uses computation as whole or part of a system to make or execute a decision or facilitate human decisionmaking.” ADMT also would include profiling, which would mean the “automated processing of personal information to evaluate certain personal aspects relating to a natural person and in particular to analyze or predict aspects concerning that natural person’s performance at work, economic situation, health, personal preferences, interests, reliability, behavior, location, or movements.”

On November 23, 2023, the UK government’s National Cyber Security Centre (“NCSC”) and the Republic of Korea’s National Intelligence Service (“NIS”) issued a joint advisory detailing techniques and tactics used by cyber actors linked to the Democratic People’s Republic of Korea (“DPRK”) that are carrying out software supply chain attacks. The publication follows the recent announcement of a new Strategic Cyber Partnership between the UK and the Republic of Korea where the two nations have committed to work together to tackle common cyber threats.

On November 27, 2023, the UK government announced the first global guidelines to ensure the secure development of AI technology (the “Guidelines”), which were developed by the UK National Cyber Security Centre (“NCSC”) and the U.S. Cybersecurity and Infrastructure Security Agency (“CISA”), in cooperation with industry experts and other international agencies and ministries. The guidelines have been endorsed by a further 15 countries, including Australia, Canada, Japan, Nigeria, and certain EU countries (full list here).

On November 16, 2023, the Federal Trade Commission released a proposed order in connection with a complaint filed in August of 2020 against Global Tel*Link Corp. (“GTL”) and its subsidiaries, Telmate and TouchPay, which offers communication and payment services for incarcerated individuals. The complaint centered around a security breach where a technician for a vendor of GTL placed unencrypted, personally identifiable information in a test environment to test a new search and storage software. The test environment allegedly was accessible on the internet without password protections which permitted an unauthorized actor to access and exfiltrate the data between August 11-13, 2020. Though GTL restricted access to the test environment, GTL allegedly failed to notify its customers for roughly nine months, while also falsely representing to prospective customers that it had never experienced a security breach.

Glass Lewis & Co. recently published its updated Benchmark Policy Guidelines for 2024 (the “Policy”), which reflect investors’ continuing focus on corporate disclosure and board oversight of cyber risks. The Policy indicates that Glass Lewis may recommend “against” directors following a cybersecurity incident if it finds the board’s risk oversight or its post-incident response to be insufficient. The Policy also provides guidance on what Glass Lewis expects companies to disclose after such an incident.  

On November 21, 2023, the UK Information Commissioner’s Office (“ICO”) issued a statement explaining that it has recently written to companies operating some of the UK’s most visited websites regarding their compliance with data protection laws when using cookies. The ICO noted that certain websites are not providing users with fair choices as to whether or not they are tracked for personalized marketing purposes, and referred to its guidance on making it simple for users to “Reject All” advertising cookies. 

On November 16, 2023, the European Data Protection Board (“EDPB”) published its Guidelines 2/2023 on the Technical Scope of Art. 5(3) of the ePrivacy Directive (the “Guidelines”).

Patrick Gunning from King & Wood Mallesons reports that, on November 2, 2023, the Australian Information Commissioner filed proceedings in the Federal Court of Australia against Australian Clinical Labs Limited seeking a civil penalty (i.e., a fine) in connection with the company’s response to a data breach that occurred in February 2022. The case is significant because: (1) it is only the second time that the Australian regulator has brought court proceedings of this kind despite having the power to do so since 2014; and (2) it signals the regulator’s priority in ensuring that cybersecurity incidents are responded to swiftly. The Australian legislature increased maximum penalties for ‘serious’ contraventions of the Privacy Act with effect from December 2022 to at least A$50 million. However, the maximum penalty available in this case will be A$2.2 million because the company’s conduct occurred prior to December 2022.

The California Privacy Protection Agency (“CPPA”) Board (the “Board”) announced an upcoming public meeting to take place over Zoom on Friday, December 8, 2023 at 9 am PST.

On November 9, 2023, the European Parliament adopted, by a majority of 481 votes in favor, 31 votes against and 71 abstentions, the final text of the Data Act. As explained in our previous blog, the Data Act aims to “ensure fairness in the digital environment, stimulate a competitive data market, open opportunities for data-driven innovation and make data more accessible for all” and was initially proposed by the European Commission on February 23, 2022.

On October 31, 2023, the Department of Health and Human Services (“HHS”) announced the issuance of a settlement agreement with Doctors’ Management Services (“DMS”), a Massachusetts-based medical management company, related to alleged violations of the Health Insurance Portability and Accountability Act’s (“HIPAA’s”) Privacy and Security Rules (collectively, the “HIPAA Rules”). DMS is a HIPAA business associate (“BA”) that provides payer credentialing and medical billing services to HIPAA Covered Entities (“CEs”). 

On November 8, 2023, the UK Information Commissioner’s Office (“ICO”) and the European Data Protection Supervisor (“EDPS”) announced they have signed a Memorandum of Understanding (“MOU”) intended to reinforce their “common mission to uphold individuals’ data protection and privacy rights, and cooperate internationally to achieve this goal”. The MOU sets out broad principles of collaboration between the ICO and EDPS and the legal framework governing the sharing of relevant information and intelligence. The ICO and EDPS consider that, when addressing similar issues, reducing divergencies in their regulatory approaches will benefit public and private organizations, individuals, and other stakeholders in the UK and EU.  

On October 30, 2023, the Federal Trade Commission announced that it is sending nearly $100 million in refunds to consumers who were harmed as a result of internet phone service provider Vonage’s alleged use of dark patterns and other obstacles that made it difficult for users to cancel their service.

On November 8, 2023, the Network Advertising Initiative (“NAI”) issued its best practices guidance (“Guidance”), which advocates for the use of demographic data for health advertising, rather than sensitive health information.

On November 1, 2023, New York Governor Hochul announced that the New York State Department of Financial Services (“NYDFS”) amended its Cybersecurity Regulation applicable to covered financial institutions. Our previous blog post covered key proposed changes to the Cyber Regulation.

The NYDFS, which regulates financial institutions including insurance companies, mortgage brokers and banks, adopted the original Cybersecurity Regulation in 2017. The new amendments strengthen the initial framework and require NYDFS-regulated entities to adhere to a number of ...

On October 30, 2023, the U.S. Securities and Exchange Commission (“SEC”) announced charges against SolarWinds Corporation and its Chief Information Security Officer (“CISO”), Timothy G. Brown, for fraud and internal control failures relating to allegedly known cybersecurity risks and vulnerabilities. The SEC’s complaint alleges that, from SolarWinds’ October 2018 initial public offering through its December 2020 8-K filing, the company was the target of a massive, nearly two-year long cyberattack, known as SUNBURST, and defrauded investors by overstating its cybersecurity practices and understating or failing to disclose known risks. The SEC has alleged that SolarWinds (1) mislead investors by disclosing only generic and hypothetical risks when the company and Brown allegedly knew of specific deficiencies in SolarWinds’ cybersecurity practices; (2) issued public statements about its cybersecurity practices and risks that were allegedly at odds with its internal assessments; and (3) discussed internally in 2019 and 2020 questions regarding the company’s ability to protect its critical assets from cyberattacks; and (4) made an incomplete disclosure about the SUNBURST attack in the company’s Form 8-K filing on December 14, 2020. In addition, the SEC alleged that Timothy Brown was aware of SolarWinds’ cybersecurity risks and vulnerabilities but did not resolve the issues or sufficiently raise them further within the company.

On October 27, 2023, the European Data Protection Board (“EDPB”) adopted an urgent binding decision instructing the Irish Data Protection Commissioner (the “Irish DPC”) to take final measures against Meta Ireland Limited (“Meta”) within two weeks and impose a ban on Meta’s processing of personal data for behavioral advertising based on the contractual necessity and legitimate interests legal bases. The ban would apply across the European Economic Area (“EEA”).

On November 1, 2023, 29 nations, including the U.S., the UK, the EU and China (full list available here), reached a ground-breaking agreement, known as the Bletchley Declaration. The Declaration sets forth a shared understanding of the opportunities and risks posed by AI and the need for governments to work together to meet the most significant challenges posed by the technology. The Declaration states  that there is an urgent need to understand and collectively manage the potential risks posed by AI to ensure the technology is developed and deployed in a safe, responsible way. The Declaration was signed at the AI Safety Summit 2023, held at Bletchley Park in the UK.