Privacy & Information Security Law Blog

On October 27, 2021, the Federal Trade Commission announced significant amendments to the agency’s Safeguards Rule (the “Final Rule”). Promulgated in 2002 pursuant to the Gramm-Leach-Bliley Act, the Safeguards Rule obligates covered financial institutions to develop, implement and maintain a comprehensive information security program that complies with the Rule’s requirements.

On October 28, 2021, the Federal Trade Commission announced the issuance of a new enforcement policy statement warning companies against using dark patterns that trick consumers into subscription services. The policy statement comes in response to rising complaints about deceptive sign-up tactics like unauthorized charges or impossible-to-cancel billing.

On October 6, 2021, Deputy Attorney General Lisa Monaco announced the launch of the new Civil Cyber-Fraud Initiative. Led by the Department of Justice (“DOJ”) Civil Division’s Commercial Litigation Branch, Fraud Section, the initiative will seek to “utilize the False Claims Act (“FCA”) to pursue cybersecurity related fraud by government contractors and grant recipients.”

The FTC will hold a virtual open meeting on Thursday, October 21, 2021, at 1pm ET to present the agency’s findings on evidence gathered pursuant to the FTC’s issuance of 6(b) orders in 2019 to six Internet Service Providers and three of their advertising affiliates regarding the parties’ privacy practices. Public release of the FTC Staff report is subject to a vote by the Commission. The presentation of findings will be followed by a verbal public comment period where commenters can share feedback on the FTC’s work and bring matters to the Commission’s attention ...

On October 7, 2021, Federal Trade Commission Chair Lina Khan appointed Olivier Sylvain as a senior advisor on rulemaking and emerging technology. As announced by Fordham University School of Law, where Sylvain serves as a professor of communications, information and administrative law, Sylvain is an expert in the Communications Decency Act and also has focused his work on artificial intelligence and community-owned networked computing.

On October 8, 2021, Senator Ed Markey (D-Mass) and Representatives Kathy Castor (D-Fla) and Lori Trahan (D-Mass) penned a letter to Chair of the Federal Trade Commission Lina Khan, urging the agency to ensure that companies uphold the commitments made in their children’s privacy notices and “hold them accountable if they fail to do so.” In the letter, the lawmakers noted that many technology companies have recently announced updates to their respective platforms’ policies that are intended to enhance children and teen protections in compliance with the UK’s Age Appropriate Design Code (“AADC”), which took effect on September 2, 2021.

On October 4, 2021, the California Privacy Protection Agency (“CPPA”) appointed Ashkan Soltani as its first Executive Director. Soltani, a former chief technologist for the Federal Trade Commission and senior advisor to the White House, began his new role on Monday. He also is a distinguished fellow at the Georgetown Law Institute for Technology Law and Policy and the Georgetown Center on Privacy and Technology.

On September 29 and 30, 2021, the U.S. Senate Committee on Commerce, Science and Transportation convened hearings on how to better protect consumer and children’s privacy.

On September 14, 2021, the Federal Trade Commission authorized new compulsory process resolutions in eight key enforcement areas: (1) Acts or Practices Affecting United States Armed Forces Members and Veterans; (2) Acts or Practices Affecting Children; (3) Bias in Algorithms and Biometrics; (4) Deceptive and Manipulative Conduct on the Internet; (5) Repair Restrictions; (6) Abuse of Intellectual Property; (7) Common Directors and Officers and Common Ownership; and (8) Monopolization Offenses.

On September 15, 2021, the Federal Trade Commission issued a Policy Statement to clarify the scope of the FTC’s Health Breach Notification Rule (the “Rule”) as it relates to health apps and connected devices. In its Policy Statement, the FTC emphasized that the Rule was designed to ensure that entities not covered under HIPAA must still be held accountable in the event of a breach of consumers’ sensitive health information. The Rule requires vendors of personal health records (“PHR”), PHR related entities, and service providers to these entities, to notify consumers and the FTC (and, in some cases, the media) in the event of a breach of unsecured identifiable health information. Failure to provide such notice can result in civil penalties under the Rule. While the Rule was established more than a decade ago, in 2009, it has never been enforced by the FTC.

On September 13, 2021, the Federal Trade Commission published final revisions to five rules promulgated pursuant to the Fair Credit Reporting Act (“FCRA”), to clarify that the rules apply only to motor vehicle dealers. The final revisions were made to bring the rules in line with the Dodd-Frank Wall Street Reform and Consumer Protection Act. Entities other than motor vehicle dealers are still subject to the Consumer Financial Protection Bureau’s (“CFPB's”) FCRA counterpart rules and the concurrent jurisdiction of the CFPB and FTC to enforce them.

On September 14, 2021, the U.S. House Committee on Energy and Commerce (“E&C Committee”) voted in favor of a legislative recommendation that would create a new Federal Trade Commission privacy bureau as part of the proposed $3.5 trillion federal budget reconciliation package.

On September 13, 2021, President Biden is expected to nominate Alvaro Bedoya to the Federal Trade Commission. Bedoya would replace FTC Commissioner Rohit Chopra, who was earlier nominated, but has not yet been confirmed, as Director of the Consumer Financial Protection Bureau.

On September 1, 2021, the Federal Trade Commission banned Support King, LLC, the operator of SpyFone.com (“SpyFone”), and its CEO, Scott Zuckerman, from offering, promoting, selling or advertising any surveillance app, service or business. The FTC alleged SpyFone allowed purchasers to illegally surveil other individuals by surreptitiously monitoring a device user’s activity without the device user’s knowledge. The FTC also alleged that SpyFone failed to safeguard such illegally harvested personal information by failing to put in place basic security measures.

On July 9, 2021, President Biden signed the Executive Order on Promoting Competition in the American Economy (the “Executive Order”). The stated goal of the Executive Order is to increase competition in the United States and resolve issues related to monopolistic behaviors, including with respect to privacy and data protection.

On July 1, 2021, the Federal Trade Commission settled a complaint brought under the Children’s Online Privacy Protection Act (“COPPA”) against Toronto-based Kuuhuub Inc. and its Finnish subsidiaries Kuu Hubb Oy and Recolor Oy, operators of the online coloring book app, Recolor. The FTC alleged that the app operators violated the COPPA Rule by collecting and disclosing personal information from child users of the app without first notifying their parents or obtaining verifiable parental consent.

On June 15, 2021, the U.S. Senate confirmed Lina Khan to the Federal Trade Commission by a vote of 69-28. Khan will fill the vacancy left by former Chairman Joseph Simons (R) who resigned from the FTC in January 2021.

As reported on the Hunton Retail Law Resource blog, this week, the Federal Trade Commission voted 3 to 1 to accept a settlement agreement with MoviePass, Inc., its parent company, and two of the now-defunct company’s former employees, after allegations of failure to take reasonable measures to secure consumers’ data and deceptive trade practices. The Commission brought an enforcement action against MoviePass pursuant to the FTC Act and the Restore Online Shoppers’ Confidence Act (“ROSCA”), the latter of which requires disclosure of all material terms, a consumer’s informed consent, and a simple mechanism to stop recurring charges when marketing negative option services.

On May 11, 2021, Senators Edward Markey (D-MA) and Bill Cassidy (R-LA) introduced the Children and Teens’ Online Privacy Protection Act (the “Bill”). The Bill, which would amend the existing Children’s Online Privacy Protection Act (“COPPA”), would prohibit companies from collecting personal information from children ages 13 to 15 without their consent.

Building upon its April 2020 business guidance on Artificial Intelligence and algorithms, on April 19, 2021, the FTC published new guidance focused on how businesses can promote truth, fairness and equity in their use of AI.

As reported on the Hunton Retail Law Blog, on April 22, 2021, the U.S. Supreme Court unanimously held in a highly-anticipated case, AMG Capital Management, LLC v. FTC, that the FTC cannot seek or obtain equitable monetary relief pursuant to §13(b) of the FTC Act.

On February 24, 2021, the Federal Trade Commission announced that it will hold a workshop on digital dark patterns on April 29, 2021. The workshop will aim to understand the ways in which user interfaces can have the effect, intentionally or unintentionally, of obscuring, subverting or impairing consumer autonomy, decision-making or choice.

On January 21, 2021, President Biden designated Rebecca Kelly Slaughter as Acting Chair of the Federal Trade Commission.

On January 13, 2021, the FTC announced that fertility-app developer Flo Health, Inc. (“Flo”) agreed to a settlement over allegations that the company shared app users’ health information with third-party data analytics providers despite representations that Flo would keep such information private.

As reported on the Hunton Retail Law Resource blog, the Federal Trade Commission settled charges with mobile advertising company Tapjoy, Inc., on allegations that the company failed to provide promised rewards in exchange for completed activities such as the payment of money, disclosure of sometimes-sensitive personal information or registration for “free trial” marketing offers.

On January 11, 2021, the FTC announced that Everalbum, Inc. (“Everalbum”), developer of the “Ever” photo storage app, agreed to a settlement over allegations that the company deceived consumers about its use of facial recognition technology and its retention of the uploaded photos and videos of users who deactivated their accounts.

The Federal Trade Commission issued a call for presentations on consumer privacy and data security research for its sixth annual PrivacyCon, which is to be held on July 27, 2021. The call for presentations asks for empirical research and demonstrations, including economic analyses, with implications for privacy and data security policy and law.

On December 15, 2020, the Federal Trade Commission announced a proposed settlement with Ascension Data & Analytics, LLC, a Texas-based mortgage industry data analytics company (“Ascension”), to resolve allegations that the company failed to ensure one of its vendors was adequately securing personal information of mortgage holders.

On December 14, 2020, the Federal Trade Commission announced that it had issued orders to nine social media and video streaming companies, requesting information on how the companies collect, use and present personal information, their advertising and user engagement practices and how their practices affect children and teens. The orders will assist the FTC in conducting a study of these policies, practices and procedures. The FTC issued the orders pursuant to Section 6(b) of the FTC Act, which allows the agency to undertake broad studies separate from its law enforcement activities.

On November 27, 2020, New Mexico Attorney General Hector Balderas filed a notice of appeal to the U.S. Court of Appeals for the Tenth Circuit in the lawsuit it brought against Google on February 20, 2020, regarding alleged violations of the federal Children’s Online Privacy Protection Act (“COPPA”) in connection with G-Suite for Education (“GSFE”). As we previously reported, the U.S. District Court of New Mexico had granted Google’s motion to dismiss, in which it asserted that its terms governed the collection of data through GSFE and that it had complied with COPPA by using schools both as “intermediaries” and as the parent’s agent for parental notice and consent, in line with Federal Trade Commission Guidance.

On November 9, 2020, the Federal Trade Commission announced it had entered into an consent agreement (the “Proposed Settlement”) with Zoom Video Communications, Inc. (“Zoom”) to settle allegations that the video conferencing provider engaged in a series of unfair and deceptive practices that undermined the security of its user base, which, according to the FTC, has grown from 10 million users in December 2019 to 300 million in April 2020 during the COVID-19 pandemic.

On September 17, 2020, Senator Roger Wicker (MS), Chairman of the Senate Commerce Committee, along with Senators John Thune (SD), Deb Fischer (NE) and Marsha Blackburn (TN) introduced the Setting an American Framework to Ensure Data Access, Transparency, and Accountability (SAFE DATA) Act (“the Bill”). The Bill marks an official introduction of an update of Senator Wicker’s draft United States Consumer Data Privacy Act of 2019, which was circulated last November.

The Centre for Information Policy Leadership at Hunton Andrews Kurth (“CIPL”) and the Data Security Council of India (“DSCI”) have published a report on Enabling Accountable Data Transfers from India to the United States under India’s Proposed Personal Data Protection Bill (the “Report”).

The U.S. Department of Commerce has issued two new sets of FAQs in light of the Court of Justice of the European Union’s (“CJEU’s”) recent decision to invalidate the EU-U.S. Privacy Shield in Schrems II. We previously reported on the Schrems II ruling and its implication for businesses that transfer personal data to the U.S. The new FAQs from the Department of Commerce address the impact of the decision on the EU-U.S. Privacy Shield framework and the Swiss-U.S. Privacy Shield framework.

On June 30, 2020, the Federal Trade Commission (“FTC”) announced it had entered into a consent agreement (the “Proposed Settlement”) with NTT Global Data Centers Americas, Inc. (“NTT”), a successor in interest to RagingWire Data Centers, Inc. (“RagingWire”), to settle allegations in a November 2019 Administrative Complaint that RagingWire misrepresented its participation in and compliance with the EU-U.S. Privacy Shield Framework (“Privacy Shield”), in violation of the FTC Act.

On June 9, 2020, the Federal Communications Commission (“FCC”) announced a proposed $225 million fine, the largest in the history of the FCC, against several individuals for telemarketing violations.

On June 1, 2020, U.S. Senators Maria Cantwell (WA) and Bill Cassidy (LA) introduced the Exposure Notification Privacy Act (the “Act”), bipartisan legislation that would impose requirements and restrictions on operators of automated exposure notification services. The bill defines automated exposure notification service as “a website, online service, online application, mobile application, or mobile operating system that is offered in commerce in the U.S. and that is designed, in part or in full, specifically to be used for, or marketed for, the purpose of digitally notifying, in an automated manner, an individual who may have become exposed to an infectious disease (or the device of such individual, or a person or entity that reviews such disclosures).” These services are commonly referred to as “contact tracing technology” because they are designed to provide alerts when a user comes in near-contact with someone who tested positive for an infectious disease, such as COVID-19.

The Federal Trade Commission (“FTC”) announced its latest Children’s Online Privacy Protection Act (“COPPA”) settlement with California-based app developer HyperBeard and its individual principals. According to the FTC, since at least 2016, HyperBeard has offered a number of child-directed mobile apps, with names like BunnyBuns, KleptoCats and NomNoms that featured brightly colored, animated characters, such as cats, dogs, bunnies, chicks, monkeys and other cartoon characters, and that are described in child-friendly terms like “super cute” and “silly.” These apps are free to download and play, but they generate revenue through in-app advertising and purchases. The FTC alleges that the defendants were aware that children were using their apps, and that they promoted them to child audiences on a kids’ entertainment website, through children’s books and through the merchandizing of officially licensed plush stuffed animals and toys. Defendants allowed third-party ad networks to collect persistent identifiers from children in order to serve them with interest-based ads without parental notice or consent, in violation of COPPA.

We previously posted about the Tapplock, Inc. (“Tapplock”) settlement with the Federal Trade Commission (“FTC”) over allegations that the company violated Section 5 of the FTC Act by falsely claiming that its “smart locks” were secure. Earlier this month, the FTC voted 5-0 to approve the settlement.

On May 19, 2020, the Federal Trade Commission (“FTC”) announced that it reached an agreement with Swiss digital game developer Miniclip, S.A. (“Miniclip”) to settle allegations that Miniclip misled consumers about its membership in a COPPA safe harbor program.

On May 14, 2020 Democrats in both the House and Senate introduced the Public Health Emergency Privacy Act (“the Act”). In the House, the Act was sponsored by Representatives Jan Schakowsky (IL), Anna Eshoo (CA) and Suzan DelBene (WA), and in the Senate was sponsored by Senators Richard Blumenthal (CT) and Mark Warner (VA). Similar to the recently-introduced COVID-19 Consumer Data Protection Act of 2020, the Act would put temporary rules in place regarding the collection, use and disclosure of emergency health data used to combat the spread of the coronavirus. The rules imposed by the Act would only apply during the course of the Public Health Emergency as declared by the Secretary of Health and Human Services (“HHS”) and would only apply to specific uses of certain personal data.

As part of its regulatory review of the Gramm-Leach-Bliley Act (“GLB”) Safeguards Rule, the Federal Trade Commission will hold a workshop, Information Security and Financial Institutions: An FTC Workshop to Examine the Safeguards Rule. The workshop, originally scheduled for May, has been postponed until July 13, 2020.

On April 30, 2020, Senator Roger Wicker (MS), Chairman of the Senate Commerce Committee, along with Senators John Thune (SD), Jerry Moran (KS) and Marsha Blackburn (TN), announced plans to introduce the COVID-19 Consumer Data Protection Act of 2020 (“the bill”), which would put temporary rules in place regarding the collection, processing and transfer of data used to combat the spread of the coronavirus. The bill would only apply during the course of the COVID-19 Public Health Emergency as declared by the Secretary of Health and Human Services, and would only apply to specific uses of certain personal data.

On April 14, 2020, the Indiana Attorney General’s office announced that the state had reached a settlement agreement with Equifax in connection with Equifax’s 2017 data breach. Under the terms of the settlement, Equifax will pay a $19.5 million penalty. Indiana previously elected not to participate in a July 2019 multistate and Federal Trade Commission settlement with Equifax regarding the same data breach.

A Canadian maker of Internet-connected padlocks, Tapplock, Inc. (“Tapplock”), settled Federal Trade Commission (“FTC”) allegations that the company violated Section 5 of the FTC Act by falsely claiming that its “smart locks” were secure. The FTC alleged that Tapplock “did not take reasonable measures to secure its locks, or take reasonable precautions or follow industry best practices for protecting consumers’ personal information.” The FTC further alleged that Tapplock did not have a security program in place prior to security researchers discovering vulnerabilities in the design and function of the smart locks.

On April 9, 2020, the Federal Trade Commission (“FTC”) issued guidance under the Children’s Online Privacy Protection Act (“COPPA”) for operators of educational technology (“EdTech”) used both in school settings and for virtual learning. The FTC’s guidance stresses that, while COPPA generally requires companies that collect personal information online from children under age 13 to provide notice of their data collection and use practices, and obtain verifiable parental consent, in the educational context and under certain conditions, schools can consent on behalf of parents to the collection of student personal information.

On March 31, 2020, the Federal Trade Commission (“FTC”) announced that it will hold a workshop on data portability on September 22, 2020. Data portability allows consumers to obtain a copy of the data an organization holds about them (e.g., emails, photos, contacts, calendar, social media content), in a format that can easily be downloaded and transferred to another entity or to themselves. Data portability has been embraced as a consumer right in the EU General Data Protection Regulation (“GDPR”), California Consumer Privacy Act (“CCPA”), and several recent privacy bills at both the state and federal level.

On March 12, 2020, Senator Jerry Moran (KS) introduced a comprehensive federal privacy bill entitled the Consumer Data Privacy and Security Act of 2020 (the “Act”).

On January 16, 2020, the Federal Trade Commission announced that settlements with five companies of separate allegations that they had falsely claimed certification under the EU-U.S. Privacy Shield framework had been finalized.

As reported on our Hunton Retail Law Resource blog, on January 7, 2020, the Federal Trade Commission announced a settlement with Mortgage Solutions FCS, Inc., d/b/a Mount Diablo Lending, and its sole principal, Ramon Walker, to resolve allegations that the lender violated the FTC Act, the Fair Credit Reporting Act (“FCRA”) and the Gramm-Leach-Bliley (“GLB”) Act, by improperly disseminating consumers’ personal information on Yelp in response to consumers’ negative reviews posted to that site.

On January 6, 2020, the Federal Trade Commission announced that it granted final approval to a settlement with InfoTrax Systems, L.C. and its former CEO, Mark Rawlins, related to allegations that InfoTrax failed to implement reasonable, low-cost and readily available security safeguards to protect the personal information the company maintained on behalf of its business clients.

In a January 6, 2020 blog post, the Director of the Federal Trade Commission’s Bureau of Consumer Protection reflected on how the FTC has taken action over the past year to strengthen its orders in data security cases. These orders have been a subject of focus for the FTC: in June 2018, the 11th Circuit’s LabMD decision struck down an FTC data security order as unenforceably vague, and the FTC subsequently held a hearing in the course of the FTC’s Hearings on Competition and Consumer Protection in the 21st Century on how it could improve data security orders.

On December 18, 2019, the House Energy and Commerce Committee released a bipartisan staff-level draft privacy bill (“the bill”). While comprehensive in scope, much of the key language in the bill was left in brackets, meaning the two sides have not yet reached a compromise on final language.

On December 9, 2019, the Federal Communications Commission (“FCC”) announced that online fax services do not fall under legal prohibitions against junk faxes. In a petition filed in 2017 for declaratory judgement brought by AmeriFactors Financial Group, LLC pursuant to the Telephone Consumer Protection Act (“TCPA”) and the Junk Fax Protection Act  (“JFPA”), the petitioner sought clarification regarding the status of online cloud-based fax services.

On December 6, 2019, the Federal Trade Commission announced its Final Order and Opinion in the matter of Cambridge Analytica, LLC, finding that Cambridge Analytica violated the FTC Act’s Section 5 prohibition against “unfair or deceptive acts or practices” when harvesting personal information through its “GSRApp” Facebook application.

On December 3, 2019, the Federal Trade Commission announced that it had reached settlements in four separate Privacy Shield cases. Specifically, the FTC alleged that Click Labs, Inc., Incentive Services, Inc., Global Data Vault, LLC, and TDARX, Inc. each falsely claimed to participate in the EU-U.S. Privacy Shield framework. The FTC also alleged that Click Labs and Incentive Services falsely claimed to participate in the Swiss-U.S. Privacy Shield framework and that Global Data and TDARX continued to claim participation in the EU-U.S. Privacy Shield after their Privacy Shield certifications lapsed. The complaints further alleged that Global Data and TDARX failed to comply with the Privacy Shield framework, including by failing to (1) verify annually that statements about their Privacy Shield practices were accurate, and (2) affirm that they would continue to apply Privacy Shield protections to personal information collected while participating in the program.

On November 29, 2019, Senator Roger Wicker (MS), Chairman of the Senate Commerce Committee, circulated a draft of a comprehensive federal privacy bill entitled the United States Consumer Data Privacy Act of 2019 (“the Bill”).

On November 26, 2019, Senate Commerce Committee Ranking Member Maria Cantwell (WA), alongside Senators Brian Schatz (HI), Amy Klobuchar (MN) and Ed Markey (MA), unveiled a new comprehensive federal privacy bill entitled the Consumer Online Privacy Rights Act (“COPRA”).

The bill would create a new bureau within the Federal Trade Commission  focusing on privacy and data security to enforce the law and promulgate new rules and regulations in the space. It also would provide enforcement authority for state attorneys general as well as a private right of action. It would preempt only state laws that “directly conflict with the provisions of the Act,” and specifically notes that state laws that afford a “greater level of protection to individuals” would not be considered in direct conflict.

On November 18, 2019, the ranking members from four Senate Committees (Senator Maria Cantwell (WA) from Commerce, Senator Dianne Feinstein (CA) from Judiciary, Senator Sherrod Brown (OH), and Senator Patty Murray (WA) from Health, Education, Labor and Pensions) released a set of “core principles” for federal privacy legislation.

On November 19, 2019, the Federal Trade Commission announced that Medable, Inc. (“Medable”) agreed to settle allegations that the company had misrepresented its participation in the EU-U.S. Privacy Shield program. The FTC alleged that, from December 2017 to October 2018, Medable falsely claimed in its online privacy policy that it was a certified participant in the EU-U.S. Privacy Shield framework and adhered to the framework’s principles. According to the complaint, although Medable did initiate an application with the Department of Commerce in December 2017, the company never completed the steps necessary to participate in the framework.

On November 13, 2019, the Centre for Information Policy Leadership (“CIPL”) at Hunton Andrews Kurth issued a discussion paper on “Organizational Accountability in Light of FTC Consent Orders” (the “Discussion Paper”). The Discussion Paper examines the recent $5 billion FTC settlement with Facebook, which resulted from Facebook’s alleged violation of a prior 2012 FTC consent order, and the recent $575 million FTC settlement with Equifax, related to its 2017 data breach.

On November 5, 2019, Representatives Anna G. Eshoo (CA) and Zoe Lofgren (CA) introduced the Online Privacy Act (the “Act”), which proposes sweeping legislation that would create federal privacy rights for individuals, require companies to adhere to data minimization and establish a federal Digital Privacy Agency (“DPA”).

On October 21, 2019, the Federal Trade Commission took action against two companies alleged to have engaged in the business of false online reviews and social media influence. In the first case, the FTC entered into a consent decree with cosmetics marketer Sunday Riley, LLC, and the company’s owner, who sell products at Sephora stores and online at Sephora.com. According to the FTC’s complaint, disguised as ordinary consumers, Sunday Riley employees and Ms. Riley herself posted fake 5-star reviews of the company’s products on Sephora’s website. Under the terms of the FTC’s agreement, the company and its principal are barred from posting fake reviews, must clearly identify endorsers, and must instruct staff on their disclosure obligations. The FTC vote on the action was 3-2, with Commissioners Chopra and Slaughter dissenting on the grounds that the settlement did not include a monetary payment or an admission of guilt.

On October 22, 2019, the Federal Trade Commission announced that, for the first time, it has brought a case against a developer of “Stalking” Apps. The agency alleges that Retina-X Studios, and its owner, James N. Johns, Jr., developed and marketed three apps that allowed purchasers to surreptitiously monitor the movements and online activities of users of devices on which the apps were installed without the knowledge or permission of the device’s user. The FTC also alleges that the app developer took steps to ensure that a device user would not be aware that the app had been installed, bypassing mobile device manufacturers’ security restrictions and leaving the device vulnerable to cybersecurity risks. The apps were marketed as tools for monitoring the behavior of employees and children. The FTC further alleges that the app developer issued policies that made inaccurate representations regarding the security of their online systems, which were recently found to have been hacked twice during earlier incidents.

As an update to our previous blog posts, the FTC announced that it and the New York Attorney General reached a $170 million agreement with Google to resolve allegations that the company violated COPPA through its YouTube platform. Under the agreement, Google will pay $136 million to the FTC and $34 million to New York. The FTC voted 3-2 to authorize the action.

As an update to our previous blog post, according to media reports, Google has reached a settlement with the FTC in the range of $150 to $200 million over the agency’s investigation into the company’s alleged violations of COPPA through its YouTube platform. The settlement has not been announced by the FTC or Google, and the details of the settlement have not been made publicly available. These reports follow Google’s announcement earlier this week that it has created a separate YouTube Kids site, which will include different content for different age groups. This news also ...

On August 8, 2019, the FTC announced that Unrollme Inc. (“Unrollme”), an email management company, agreed to settle allegations the company deceived consumers about how it accesses and uses their personal emails. Unrollme offered users a service whereby the company would help unsubscribe users from unwanted subscription emails. In connection with this service, Unrollme required users to provide the company with access to their email accounts. The FTC alleged that Unrollme falsely told consumers it would not “touch” their personal emails. In fact, the FTC alleged, Unrollme shared its users’ email receipts (“e-receipts”) (i.e., emails sent to consumers following a completed transaction) with its parent company, Slice Technologies, Inc. The FTC’s complaint alleged that the parent company used information from the e-receipts (such as the user’s name, address, and information about products or services the individual purchased) for purposes of its own market research analytics products.

As previously reported on July 12, 2019, Facebook will pay a $5 billion penalty to the Federal Trade Commission to resolve a privacy probe into whether Facebook violated a prior FTC consent decree requiring the company to better protect user privacy. The $5 billion penalty is the largest imposed on any company for violating consumers’ privacy – nearly 20 times the largest privacy or data security penalty to date.

On July 22, 2019, the Federal Trade Commission announced that Equifax Inc. (“Equifax”) agreed to pay at least $575 million, and potentially up to $700 million, as part of a global settlement agreement with the FTC, the Consumer Financial Protection Bureau (“CFPB”), and 48 U.S. states and territories to resolve investigations into the colossal data breach the company suffered in 2017. This is the largest data breach settlement in U.S. history.

According to media reports, the Federal Trade Commission has approved a multimillion dollar fine as part of a settlement with Google related to the FTC’s investigation into YouTube’s children’s data privacy practices. The FTC found that, in violation of COPPA, Google had failed to adequately protect children under 13 who used the video-streaming service and improperly collected their data.

On July 17, 2019, the Federal Trade Commission published a notice in the Federal Register announcing an accelerated review of its Children’s Online Privacy Protection Rule (“COPPA Rule” or “Rule”), seeking feedback on the effectiveness of the 2013 amendments to the Rule, and soliciting input on whether additional changes are needed. Citing questions regarding the Rule’s application to the educational technology sector, voice-enabled connected devices, and general audience platforms that host child-directed content, the FTC indicated that it was moving up its review from a standard 10-year timeframe. The Commission vote to conduct the Rule review was unanimous, 5-0.

According to media reports, the Federal Trade Commission has approved a roughly $5 billion settlement with Facebook, Inc. to resolve a privacy probe investigating whether Facebook had violated a prior FTC consent decree requiring the company to better protect user privacy. The investigation followed reports that Cambridge Analytica improperly accessed the personal data of 87 million Facebook users.

On July 2, 2019, the Federal Trade Commission announced a case involving the operator of an online rewards website who allegedly failed to take reasonable steps to secure consumers’ personal data.

On June 14, 2019, the Federal Trade Commission announced that it has taken action against a number of companies that allegedly misrepresented their compliance with the EU-U.S. and Swiss-U.S. Privacy Shield frameworks (collectively, the “Privacy Shield”) and other international privacy agreements.

On May 6, 2019, the Federal Trade Commission announced that Meet24, FastMeet and Meet4U—three dating apps owned by Ukrainian-based company Wildec LLC—were removed from the Apple App Store and Google Play Store following an FTC letter alleging that the apps potentially violated the Children’s Online Privacy Protection Act (“COPPA”) and the Federal Trade Commission Act (“FTC Act”). According to the letter and contrary to what was claimed in their privacy policies, the apps, which collect dates of birth, email addresses, photographs and real-time location date, failed to block users who indicated they were under the age of 13.

On April 24, 2019, the Federal Trade Commission announced two data security cases involving online operators—one, an online rewards website, and the second, a dress-up games website—that were alleged to have failed to take reasonable steps to secure consumers’ data, which allowed hackers to breach both websites.

On April 12, 2019, Senator Edward J. Markey (MA) introduced the Privacy Bill of Rights Act (the “Act”), comprehensive privacy legislation intended to protect individuals’ “personal information,” defined as “information that directly or indirectly identifies, relates to, describes, is capable of being associated with, or could reasonably be linked to, a particular individual.” This definition is substantially similar to the definition of “personal information” contained in the California Consumer Privacy Act of 2018. The Act also includes an enumerated list of examples that constitute “personal information” and specifically excludes certain publicly available information from the term.

During the week of April 1, 2019, the Centre for Information Policy Leadership (“CIPL”) at Hunton Andrews Kurth LLP hosted its annual executive retreat in Washington, D.C. (the “Retreat”). During the Retreat, CIPL held a full-day working session on evolving technologies and a new U.S. privacy framework followed by a closed members only half-day roundtable on global privacy trends with special guest Helen Dixon, Data Protection Commissioner of Ireland.

On March 5, 2019, the Federal Trade Commission announced that it is seeking comment on proposed changes to the FTC’s Safeguards Rule and Privacy Rule under the Gramm-Leach-Bliley Act (“GLB”).

The proposed amendments to the Safeguards Rule, which went into effect in 2003 and imposes data security obligations on financial institutions over which the Commission has jurisdiction, are based primarily on the cybersecurity regulations issued by the New York Department of Financial Services and the insurance data security model law issued by the National Association of Insurance Commissioners. The proposed changes would add more detailed requirements on how financial institutions must protect customer information.

During the week of February 25, 2019, the Centre for Information Policy Leadership (“CIPL”) at Hunton Andrews Kurth LLP participated in the meetings of the APEC Data Privacy Subgroup (“DPS”) and Electronic Commerce Steering Group (“ECSG”) in Santiago, Chile. CIPL enjoys formal guest status and a seat at the table at these bi-annual APEC privacy meetings.

On February 27, 2019, the Federal Trade Commission announced a record $5.7 million civil penalty against popular video creation and sharing app Musical.ly (now known as TikTok) for violations of U.S. children’s privacy rules. According to the FTC’s complaint, Musical.ly is designed to appeal to young children (among others), and the company was aware that a significant percentage of Musical.ly users were children under the age of 13. The FTC also alleged that Musical.ly gained actual knowledge of underage use from parents who unsuccessfully sought to have their children’s ...

On February 12, 2019, the Federal Trade Commission announced the completion of the first regulatory review of the Controlling the Assault of Non-Solicited Pornography and Marketing Act (“CAN-SPAM”) Rule (the “CAN-SPAM Rule” or “Rule”). By a vote of 5-0, the FTC voted to retain the CAN-SPAM rule with no modifications.

On December 19, 2018, the European Commission (the “Commission”) issued a press release regarding the publication of the Commission’s second annual review of the functioning of the EU-U.S. Privacy Shield (the “Report”).

In connection with its hearings on data security, the Federal Trade Commission hosted a December 12 panel discussion on “The U.S. Approach to Consumer Data Security.” Moderated by the FTC’s Deputy Director for Economic Analysis James Cooper, the panel featured private practitioners Lisa Sotto, from Hunton Andrews Kurth, and Janis Kestenbaum, academics Daniel Solove (GW Law School) and David Thaw (University of Pittsburgh School of Law), and privacy advocate Chris Calabrese (Center for Democracy and Technology). Lisa set the stage with an overview of the U.S. data security framework, highlighting the complex web of federal and state rules and influential industry standards that result in a patchwork of overlapping mandates. Panelists debated the effect of current law and enforcement on companies’ data security programs before turning to the “optimal” framework for a U.S. data security regime. Among the details discussed were establishing a risk-based approach with a baseline set of standards and clear process requirements. While there was not uniform agreement on the specifics, the panelists all felt strongly that federal legislation was warranted, with the FTC taking on the role of principal enforcer.

On December 4, 2018, the New York Attorney General (“NY AG”) announced that Oath Inc., which was known as AOL Inc. (“AOL”) until June 2017 and is a subsidiary of Verizon Communications Inc., agreed to pay New York a $4.95 million civil penalty following allegations that it had violated the Children’s Online Privacy Protection Act (“COPPA”) by collecting and disclosing children’s personal information in conducting online auctions for advertising placement. This is the largest-ever COPPA penalty.

On December 4, 2018, the Federal Trade Commission published a notice in the Federal Register indicating that it is seeking public comment on whether any amendments should be made to the FTC’s Identity Theft Red Flags Rule (“Red Flags Rule”) and the duties of card issuers regarding changes of address (“Card Issuers Rule”) (collectively, the “Identity Theft Rules”). The request for comment forms part of the FTC’s systematic review of all current FTC regulations and guides. These periodic reviews seek input from stakeholders on the benefits and costs of specific FTC rules and guides along with information about their regulatory and economic impacts.

The Federal Trade Commission published the agenda for the ninth session of its Hearings on Competition and Consumer Protection in the 21st Century (“Hearings Initiative”), a wide-ranging series of public hearings. The ninth session, to take place on December 11-12, 2018, will focus on data security. Lisa Sotto, chair of Hunton Andrews Kurth’s Privacy and Cybersecurity practice, is one of five panel participants discussing “The U.S. Approach to Consumer Data Security.” The panel will be moderated by James Cooper, Deputy Director for Economic Analysis of the FTC’s ...

On November 1, 2018, Senator Ron Wyden (D-Ore.) released a draft bill, the Consumer Data Protection Act, that seeks to “empower consumers to control their personal information.” The draft bill imposes heavy penalties on organizations and their executives, and would require senior executives of companies with more than one billion dollars per year of revenue or data on more than 50 million consumers to file annual data reports with the Federal Trade Commission. The draft bill would subject senior company executives to imprisonment for up to 20 years or fines up to $5 million, or both, for certifying false statements on an annual data report. Additionally, like the EU General Data Protection Regulation, the draft bill proposes a maximum fine of 4% of total annual gross revenue for companies that are found to be in violation of Section 5 of the FTC Act.

On October 19, 2018, the Federal Trade Commission announced that it released a paper on the Staff Perspective on the Informational Injury Workshop (the “Paper”), which summarized the outcomes of a workshop it hosted on December 12, 2017 to discuss and better understand “informational injuries” (i.e., harm suffered by consumers as a result of privacy and security incidents, such as data breaches or unauthorized disclosures of data) in an effort to guide (1) future policy determinations related to consumer injury and (2) future application of the “substantial injury” prong in cases involving informational injury.

Vizio, Inc. (“Vizio”), a California-based company best known for its internet-connected televisions, agreed to a $17 million settlement that, if approved, will resolve multiple proposed consumer class actions consolidated in California federal court. The suits’ claims, which are limited to the period between February 1, 2014 and February 6, 2017, involve data-tracking software Vizio installed on its smart TVs. The software allegedly identified content displayed on Vizio TVs and enabled Vizio to determine the date, time, channel of programs and whether a viewer watched live or recorded content. The viewing patterns were connected to viewer’s IP addresses, though never, Vizio emphasized in its press release announcing the proposed settlement, to an individual’s name, address, or similar identifying information. According to Vizio, viewing data allows advertisers and programmers to develop content better aligned with consumers’ preferences and interests.  

On September 27, 2018, the Federal Trade Commission announced a settlement agreement with four companies - IDmission, LLC, (“IDmission”) mResource LLC (doing business as Loop Works, LLC) (“mResource”), SmartStart Employment Screening, Inc. (“SmartStart”), and VenPath, Inc. (“VenPath”) - over allegations that each company had falsely claimed to have valid certifications under the EU-U.S. Privacy Shield framework. The FTC alleged that SmartStart, VenPath and mResource continued to post statements on their websites about their participation in the Privacy Shield after allowing their certifications to lapse. IDmission had applied for a Privacy Shield certification but never completed the necessary steps to be certified.

On September 26, 2018, the U.S. Department of Commerce’s National Telecommunications and Information Administration (“NTIA”) announced that it is seeking public comments on a proposed approach to advancing consumer privacy. The approach is divided into two parts: (1) a set of desired user-centric privacy outcomes of organizational practices, including transparency, control, reasonable minimization (of data collection, storage length, use and sharing), security, access and correction, risk management and accountability; and (2) a set of high-level goals that describe the outlines of the ecosystem that should be created to provide those protections, including harmonizing the regulatory landscape, balancing legal clarity and the flexibility to innovate, ensuring comprehensive application, employing a risk and outcome-based approach, creating mechanisms for interoperability with international norms and frameworks, incentivizing privacy research, ensuring that the Federal Trade Commission has the resources and authority to enforce, and ensuring scalability.

On September 26, 2018, the U.S. Senate Committee on Commerce, Science, and Transportation convened a hearing on Examining Consumer Privacy Protections with representatives of major technology and communications firms to discuss approaches to protecting consumer privacy, how the U.S. might craft a federal privacy law, and companies’ experiences in implementing the EU General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act (“CCPA”).

Effective September 21, 2018, Section 301 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Act”) requires consumer reporting agencies to provide free credit freezes and year-long fraud alerts to consumers throughout the country. Under the Act, consumer reporting agencies must each set up a webpage designed to enable consumers to request credit freezes, fraud alerts, extended fraud alerts and active duty fraud alerts. The webpage must also give consumers the ability to opt out of the use of information in a consumer report to send the consumer a ...

The Federal Trade Commission announced the opening dates of its Hearings on Competition and Consumer Protection in the 21st Century, a series of public hearings that will discuss whether broad-based changes in the economy, evolving business practices, new technologies or international developments might require adjustments to competition and consumer protection law, enforcement priorities and policy. The FTC and Georgetown University Law Center will co-sponsor two full-day sessions of hearings on September 13 and 14, 2018, to be held at the Georgetown University Law Center facility.

On August 13, 2018, the Federal Trade Commission approved changes to the video game industry’s safe harbor guidelines under the Children’s Online Privacy Protection Act (“COPPA”) Rule. COPPA’s “safe harbor” provision enables industry groups to propose self-regulatory guidelines regarding COPPA compliance for FTC approval. 

On August 6, 2018, the Federal Trade Commission published a notice seeking public comment on whether the FTC should expand its enforcement power over corporate privacy and data security practices. The notice, published in the Federal Register, follows FTC Chairman Joseph Simons’ declaration at a July 18 House subcommittee hearing that the FTC’s current authority to do so, under Section 5 of the FTC Act, is inadequate to deal with the privacy and security issues in today’s market.

On July 12, 2018, two U.S. Senators sent a letter to the Federal Trade Commission asking the agency to investigate the privacy policies and practices of smart TV manufacturers. In their letter, Senators Edward Markey (D-MA) and Richard Blumenthal (D-CT) note that smart TVs can “compile detailed profiles about users’ preferences and characteristics” which can then allow companies to personalize ads to be sent to “customers’ computers, phones or any other device that shares the smart TV’s internet connection.”

On July 5, 2018, the European Parliament issued a nonbinding resolution (“the Resolution”) that calls on the European Commission to suspend the EU-U.S. Privacy Shield unless U.S. authorities can “fully comply” with the framework by September 1, 2018. The Resolution states that the data transfer mechanism does not provide the adequate level of protection for personal data as required by EU data protection law. The Resolution takes particular aim at potential access to EU residents’ personal data by U.S. national security agencies and law enforcement, citing the passage of the CLOUD Act as having “serious implications for the EU, as it is far-reaching and creates a potential conflict with the EU data protection laws.”

On July 2, 2018, the Federal Trade Commission announced that California company ReadyTech Corporation (“ReadyTech”) agreed to settle FTC allegations that ReadyTech misrepresented it was in the process of being certified as compliant with the EU-U.S. Privacy Shield (“Privacy Shield”) framework for lawfully transferring consumer data from the European Union to the United States. The FTC finalized this settlement on October 17, 2018.