Privacy & Information Security Law Blog

On February 6, 2018, the Federal Trade Commission (“FTC”) released its agenda for PrivacyCon 2018, which will take place on February 28. Following recent FTC trends, PrivacyCon 2018 will focus on privacy and data security considerations associated with emerging technologies, including the Internet of Things, artificial intelligence and virtual reality. The event will feature four panel presentations by over 20 researchers, including (1) collection, exfiltration and leakage of private information; (2) consumer preferences, expectations and behaviors; (3) economics, markets and experiments and (4) tools and ratings for privacy management. The FTC’s press release emphasizes the event’s focus on the economics of privacy, including “how to quantify the harms that result when companies fail to secure consumer information, and how to balance the costs and benefits of privacy-protective technologies and practices.”

On February 5, 2018, the Federal Trade Commission (“FTC”) announced its most recent Children’s Online Privacy Protection Act (“COPPA”) case against Explore Talent, an online service marketed to aspiring actors and models. According to the FTC’s complaint, Explore Talent provided a free platform for consumers to find information about upcoming auditions, casting calls and other opportunities. The company also offered a monthly fee-based “pro” service that promised to provide consumers with access to specific opportunities. Users who registered online were asked to input a host of personal information including full name, email, telephone number, mailing address and photo; they also were asked to provide their eye color, hair color, body type, measurements, gender, ethnicity, age range and birth date.

On January 23, 2018, the New York Attorney General announced that Aetna Inc. (“Aetna”) agreed to pay $1.15 million and enhance its privacy practices following an investigation alleging it risked revealing the HIV status of 2,460 New York residents by mailing them information in transparent window envelopes. In July 2017, Aetna sent HIV patients information on how to fill their prescriptions using envelopes with large clear plastic windows, through which patient names, addresses, claims numbers and medication instructions were visible. Through this, the HIV status of some patients was visible to third parties. The letters were sent to notify members of a class action lawsuit that, pursuant to that suit’s resolution, they could purchase HIV medications at physical pharmacy locations, rather than via mail order delivery.

On January 25, 2018, the Standardization Administration of China published the full text of the Information Security Technology – Personal Information Security Specification (the “Specification”). The Specification will come into effect on May 1, 2018. The Specification is voluntary, but could become influential within China because it establishes benchmarks for the processing of personal information by a wide variety of entities and organizations. In effect, the Specification constitutes a best practices guide for the collection, retention, use, sharing and transfer of personal information, and for the handling of related information security incidents.

On January 8, 2018, the FTC announced an agreement with electronic toy manufacturer, VTech Electronics Limited and its U.S. subsidiary, settling charges that VTech violated the Children’s Online Privacy Protection Act (“COPPA”) by collecting personal information from hundreds of thousands of children without providing direct notice or obtaining their parent’s consent, and failing to take reasonable steps to secure the data it collected. Under the agreement, VTech will (1) pay a $650,000 civil penalty; (2) implement a comprehensive data security program, subject to ...

As reported in BNA Privacy Law Watch, on December 6, 2017, health care provider 21st Century Oncology agreed to pay $2.3 million to settle charges by the Department of Health and Human Services' (“HHS”) Office for Civil Rights (“OCR”) that its security practices led to a data breach involving patient information. The settlement was made public in the company’s December 6, 2017, bankruptcy filing. The HHS charges stemmed from a 2015 data breach involving the compromise of Social Security numbers, medical diagnoses and health insurance information of at least 2.2 million ...

Recently, the FTC and FCC announced their intent to enter into a Memorandum of Understanding (“MOU”) under which the agencies would coordinate their efforts following the adoption of the Restoring Internet Freedom Order (the “Order”). As we previously reported, if adopted, the Order would repeal the rules put in place by the FCC in 2015 that prohibit high-speed internet service providers (“ISPs”) from stopping or slowing down the delivery of websites and from charging customers extra fees for high-quality streaming and other services. 

Recently, FCC Chairman Ajit Pai released a draft of the Restoring Internet Freedom Order (the “Order”). If adopted, the Order would repeal the rules put in place by the FCC in 2015 that prohibit high-speed internet service providers (“ISPs”) from stopping or slowing down the delivery of websites and from charging customers extra fees for high-quality streaming and other services.

Recently, the Federal Trade Commission released the final agenda for a workshop being held on December 12, 2017, that will address the various consumer injuries that result from the unauthorized access to or misuse of consumers’ personal information.

On November 8, 2017, the United States District Court for the Northern District of California ordered German defendants in an ongoing patent suit, BrightEdge Technologies, Inc. v. Searchmetrics GmbH, to produce a particular database, despite the defendants’ claims that such production would violate German privacy laws.

On November 7, 2017, the Standing Committee of the National People’s Congress of China published the second draft of the E-commerce Law (the “Second Draft”) and is allowing the general public an opportunity to comment through November 26, 2017.

On November 8, 2017, the FTC announced a settlement with Georgia-based online tax preparation service, TaxSlayer, LLC (“TaxSlayer”), regarding allegations that the company violated federal rules on financial privacy and data security. According to the FTC’s complaint, malicious hackers were able to gain full access to nearly 9,000 TaxSlayer user accounts between October 2015 and December 2015. The hackers allegedly used the personal information contained in the users’ accounts, including contact information, Social Security numbers and financial information, to engage in tax identify theft and obtain tax refunds through filing fraudulent tax returns. The FTC charged TaxSlayer with violating the Gramm-Leach-Bliley Act’s Safeguards Rule and Privacy Rule. 

On October 31, 2017, the New York and Vermont Attorneys General (“Attorneys General”) announced a settlement with Hilton Domestic Operating Company, Inc., formerly known as Hilton Worldwide, Inc. (“Hilton”), to settle allegations that the company lacked reasonable data security and waited too long to report a pair of 2015 data breaches, which exposed over 350,000 credit card numbers. The Attorneys General alleged that Hilton failed to maintain reasonable data security and waited more than nine months after the first incident to notify consumers of the breaches, in violation of the states' consumer protection and breach notification laws.

Recently, the Office of the Privacy Commissioner of Canada (“OPC”) issued its 2017 Global Privacy Enforcement Network Sweep results (the “Report”), which focused on certain privacy practices of online educational tools and services targeted at classrooms. The OPC examined the privacy practices of two dozen educational websites and apps used by K-12 students. The “sweep” sought to replicate the consumer experience by interacting with the websites and apps, and recording the privacy practices and controls in place. The overarching theme of the Report is “user controls over personal information,” which the OPC further refined into four subthemes: (1) transparency, (2) consent, (3) age-appropriate collection and disclosure, and (4) deletion of personal information.

On October 3, 2017, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) issued an announcement clarifying when protected health information (“PHI”) can be shared with family, friends and others. This announcement, prompted by the recent mass shooting in Las Vegas, outlines the purposes for which PHI can be disclosed to these parties pursuant to HIPAA and the conditions that apply, which are summarized below:

On September 29, 2017, Samanage USA, Inc. (“Samanage”), a North Carolina-based technology company that provided cloud-based IT support services as a subcontractor for Vermont’s health care exchange (“Vermont Health Connect”), agreed to a $264,000 settlement with the Vermont Attorney General in relation to a breach that exposed the Social Security numbers of 660 Vermont Health Connect users.

On September 7, 2017, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) issued an announcement containing disaster preparedness and recovery guidance in advance of Hurricane Irma. The announcement follows a bulletin issued in late August during Hurricane Harvey that addressed how protected health information (“PHI”) can be shared during emergencies. Together, these communications underscore key privacy and security issues for entities covered by HIPAA to help them protect individuals’ health information before, during and after emergency situations.

On September 5, 2017, the FTC announced that Lenovo, Inc. (“Lenovo”) agreed to settle charges that its preloaded software on some laptop computers compromised online security protections in order to deliver advertisements to consumers. The settlement agreement (the “Settlement”) is between Lenovo, the FTC and 32 State Attorneys General. 

Recently, the National Information Security Standardization Technical Committee of China published a draft document entitled Information Security Technology – Guidelines for De-Identifying Personal Information (the “Draft Guidelines”). The Draft Guidelines are open for comment from the general public until October 9, 2017.

On August 25, 2017, U.S. District Judge Lucy Koh signed an order granting preliminary approval of the record class action settlement agreed to by Anthem Inc. this past June. The settlement arose out of a 2015 data breach that exposed the personal information of more than 78 million individuals, including names, dates of birth, Social Security numbers and health care ID numbers. The terms of the settlement include, among other things, the creation of a pool of funds to provide credit monitoring and reimbursement for out-of-pocket costs for customers, as well as up to $38 million in attorneys’ fees. Anthem will also be required to make certain changes to its data security systems and cybersecurity practices for at least three years.

On August 25, 2017, the FTC published the sixth blog post in its “Stick with Security” series. As we previously reported, the FTC will publish an entry every Friday for the next few months focusing on each of the 10 principles outlined in its Start with Security Guide for Businesses. This week’s post, entitled Stick with Security: Segment your network and monitor who’s trying to get in and out, illustrates the benefits of segmenting networks and monitoring the size and frequency of data transfers.

As reported in BNA Privacy Law Watch, on August 17, 2017, Delaware amended its data breach notification law, effective April 14, 2018. The Delaware law previously required companies to give notice of a breach to affected Delaware residents “as soon as possible” after determining that, as a result of the breach, “misuse of information about a Delaware resident has occurred or is reasonably likely to occur.” The prior version of the law did not require regulator notification.

On August 15, 2017, the FTC announced that it had reached a settlement with Uber, Inc., over allegations that the ride-sharing company had made deceptive data privacy and security representations to its consumers. Under the terms of the settlement, Uber has agreed to implement a comprehensive privacy program and undergo regular, independent privacy audits for the next 20 years.

On August 18, 2017, the FTC published the fifth blog post in its “Stick with Security” series. As we previously reported, the FTC will publish an entry every Friday for the next few months focusing on each of the 10 principles outlined in its Start with Security Guide for Businesses. This week’s post, entitled Stick with Security: Store sensitive personal information securely and protect it during transmission, outlines steps businesses can take to secure sensitive data, including when it is in transit.

On August 14, 2017, the Colombian Superintendence of Industry and Commerce (“SIC”) announced that it was adding the United States to its list of nations that provide an adequate level of protection for the transfer of personal information, according to a report from Bloomberg BNA. The SIC, along with the Superintendence of Finance, is Colombia’s data protection authority, and is responsible for enforcing Colombia’s data protection law. Under Colombian law, transfers of personal information to countries that are deemed to have laws providing an adequate level of ...

On August 11, 2017, the FTC published the fourth blog post in its “Stick with Security” series. As we previously reported, the FTC will publish an entry every Friday for the next few months focusing on each of the 10 principles outlined in its Start with Security Guide for Businesses. This week’s post, entitled Stick with Security: Require secure passwords and authentication, examines five effective security measures companies can take to safeguard their computer networks.

On August 9, 2017, Nationwide Mutual Insurance Co. (“Nationwide”) agreed to a $5.5 million settlement with attorneys general from 32 states in connection with a 2012 data breach that exposed the personal information of over 1.2 million individuals. 

On August 4, 2017, the FTC published the third blog post in its “Stick with Security” series. As we previously reported, the FTC will publish an entry every Friday for the next few months focusing on each of the 10 principles outlined in its Start with Security Guide for Businesses. This week’s post, entitled “Stick with security: Control access to data sensibly,” details key security measures businesses can take to limit unauthorized access to data in their possession.

On July 31, 2017, the Federal Trade Commission announced that it has approved modifications to TRUSTe’s safe harbor program under the Children’s Online Privacy Protection Rule (the “COPPA Rule”).

On July 28, 2017, the FTC published the second blog post in its “Stick with Security” series. As we previously reported, the FTC will publish an entry every Friday for the next few months focusing on each of the 10 principles outlined in its Start with Security Guide for Businesses. This week’s post, entitled “Start with security – and stick with it,” looks at key security principles that apply to all businesses regardless of their size or the types of data they handle.

On July 26, 2017, the Court of Justice of the European Union (“CJEU”) declared that the envisaged EU-Canada agreement on the transfer of Passenger Name Records (“PNR Agreement”) interferes with the fundamental right to respect for private life and the right to the protection of personal data and is therefore incompatible with EU law in its current form. This marks the first instance where the CJEU has been asked to rule on the compatibility of a draft international agreement with the European Charter of Fundamental Human Rights.

On July 21, 2017, New Jersey Governor Chris Christie signed a bill that places new restrictions on the collection and use of personal information by retail establishments for certain purposes. The statute, which is called the Personal Information and Privacy Protection Act, permits retail establishments in New Jersey to scan a person’s driver’s license or other state-issued identification card only for the following eight purposes:

On July 5, 2017, the FTC announced that Blue Global Media, LLC (“Blue Global”) agreed to settle charges that it misled consumers into filling out loan applications and then sold those applications, including sensitive personal information contained therein, to other entities without verifying how consumers’ information would be used or whether it would remain secure. According to the FTC’s complaint, Blue Global claimed it would connect loan applicants to lenders from its network of over 100 lenders in an effort to offer applicants the best terms. In reality, Blue Global “sold very few of the loan applications to lenders; did not match applications based on loan rates or terms; and sold the loan applications to the first buyer willing to pay for them.” The FTC alleged that, contrary to Blue Global’s representations, the company provided consumers’ sensitive information—including SSN and bank account number—to buyers without consumers’ knowledge or consent. The FTC further alleged that, upon receiving complaints from consumers that their personal information was being misused, Blue Global failed to investigate or take action to prevent harm to consumers.

On June 26, 2017, Airway Oxygen, a provider of oxygen therapy and home medical equipment, reported that it was the subject of a ransomware attack affecting 500,000 patients’ protected health information. The attack is the second largest health data breach recorded by the Office for Civil Rights (“OCR”) this year, and the largest ransomware incident recorded by OCR since it began tracking incidents in 2009.

On June 23, 2017, Anthem Inc., the nation’s second largest health insurer, reached a record $115 million settlement in a class action lawsuit arising out of a 2015 data breach that exposed the personal information of more than 78 million people. Among other things, the settlement creates a pool of funds to provide credit monitoring and reimbursement for out-of-pocket costs for customers, as well as up to $38 million in attorneys’ fees.

On June 20, 2017, the UK Information Commissioner’s Office (“ICO”) published an updated version of its Code of Practice on Subject Access Requests (the “Code”). The updates are primarily in response to three Court of Appeal decisions from earlier this year regarding data controllers’ obligations to respond to subject access requests (“SARs”). The revisions more closely align the ICO’s position with the court’s judgments.

On June 21, 2017, the Federal Trade Commission updated its guidance, Six-Step Compliance Plan for Your Business, for complying with the Children’s Online Privacy Protection Act (“COPPA”). The FTC enforces the COPPA Rule, which sets requirements regarding children’s privacy and safety online. The updated guidance adds new information on situations where COPPA applies and steps to take for compliance.

On May 27, 2017, the National Information Security Standardization Technical Committee of China published draft guidelines on cross-border transfers pursuant to the new Cybersecurity Law, entitled Information Security Technology – Guidelines for Data Cross-Border Transfer Security Assessment (the “Draft Guidelines"). The earlier draft, Measures for the Security Assessment of Outbound Transmission of Personal Information and Critical Data (the “Draft Measures”), requires network operators to conduct “security assessments” when they propose to transfer personal information and “important information” to places outside of China. These “security assessments” are essentially audits of the cybersecurity circumstances surrounding the proposed transfer that are intended to produce an assessment of the risk involved. If the assessment indicates that the risk is too high, the transfer must be terminated.

On June 2, 2017, in preparation for the first annual review of the EU-U.S. Privacy Shield (“Privacy Shield”) framework, the European Commission has sent questionnaires to trade associations and other groups, including the Centre for Information Policy Leadership at Hunton & Williams LLP, to seek information from their Privacy Shield-certified members on the experiences of such organizations during the first year of the Privacy Shield. The EU Commission intends to use the questionnaire responses to inform the annual review of the function, implementation, supervision and enforcement of the Privacy Shield.

Recently, the Colorado Division of Securities (the “Division”) published cybersecurity regulations for broker-dealers and investment advisers regulated by the Division. Colorado’s cybersecurity regulations follow similar regulations enacted in New York that apply to certain state-regulated financial institutions.

On June 1, 2017, the new Cybersecurity Law went into effect in China. This post takes stock of (1) which measures have been passed so far, (2) which ones go into effect on June 1 and (3) which ones are in progress but have yet to be promulgated.

On May 25, 2017, Oregon Governor Kate Brown signed into law H.B. 2090, which updates Oregon’s Unlawful Trade Practices Act by holding companies liable for making misrepresentations on their websites (e.g., in privacy policies) or in their consumer agreements about how they will use, disclose, collect, maintain, delete or dispose of consumer information. Pursuant to H.B. 2090, a company engages in an unlawful trade practice if it makes assertions to consumers regarding the handling of their information that are materially inconsistent with its actual practices. Consumers can ...

On May 23, 2017, various attorneys general of 47 states and the District of Columbia announced that they had reached an $18.5 million settlement with Target regarding the states’ investigation of the company’s 2013 data breach. This represents the largest multi-state data breach settlement achieved to date.

On May 22, 2017, New York Attorney General Eric T. Schneiderman announced that the AG’s office has reached a settlement (the “Settlement”) with Safetech Products LLC (“Safetech”) regarding the company’s sale of insecure Bluetooth-enabled wireless doors and padlocks. In a press release, Schneiderman indicated that this “marks the first time an attorneys general’s office has taken legal action against a wireless security company for failing to protect their [customers’] personal and private information.”

On May 19, 2017, the Cyberspace Administration of China (“CAC”) issued a revised draft (the “Revised Draft”) of its Measures for the Security Assessment of Outbound Transmission of Personal Information and Critical Data. The original draft was issued in April 2017, and similar to the original draft, the Revised Draft does not have the impact of law; it does, however, provide an indication of how the CAC’s views on the Cybersecurity Law have evolved since the publication of the original draft. The Revised Draft was issued after the CAC received comments on the original draft from numerous parties.

On May 10, 2017, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) announced a $2.4 million civil monetary penalty against Memorial Hermann Health System (“MHHS”) for alleged violations of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Privacy Rule. 

On May 2, 2017, the Cyberspace Administration of China published the final version of the Measures for the Security Review of Network Products and Services (for trial implementation) (the “Measures”), after having published a draft for public comment in February. Pursuant to the Cybersecurity Law of China (the “Cybersecurity Law”), if an operator of key information infrastructure purchases a network product or service that may affect national security, a security review of that product or service is required. The Measures provide detailed information about how these security reviews will actually be implemented. The Measures will come into effect on June 1, 2017, together with the Cybersecurity Law. The Measures should not be confused with the final version of the draft Measures for the Security Assessment of Outbound Transmission of Personal Information and Critical Data, which was published on April 11, 2017, and remain open for public comment.

On April 19, 2017, the FTC announced that it is seeking public comment on proposed changes to TRUSTe, Inc.’s safe harbor program under the Children’s Online Privacy Protection Rule (the “Proposed Changes”). As we previously reported, New York Attorney General Eric T. Schneiderman announced that TRUSTe agreed to settle allegations that it failed to properly verify that customer websites aimed at children did not run third-party software to track users. The Proposed Changes are a result of the settlement agreement between TRUSTe and the New York Attorney General.

On April 6, 2017, New Mexico became the 48th state to enact a data breach notification law, leaving Alabama and South Dakota as the two remaining states without such requirements. The Data Breach Notification Act (H.B. 15) goes into effect on June 16, 2017.

On April 6, 2017, New York Attorney General Eric T. Schneiderman announced that privacy compliance company TRUSTe, Inc., agreed to settle allegations that it failed to properly verify that customer websites aimed at children did not run third-party software to track users. According to Attorney General Schneiderman, the enforcement action taken by the NY AG is the first to target a privacy compliance company over children’s privacy.

On April 4, 2017, the Massachusetts Attorney General’s office announced a settlement with Copley Advertising LLC (“Copley”) in a case involving geofencing.

The Cybersecurity Law of China, which was passed in November of 2016, introduced a data localization requirement requiring “operators of key information infrastructure” to retain, within China, critical data and personal information which they collect or generate in the course of operating their business in China. If an entity has a genuine need resulting from a business necessity to transmit critical data or personal information to a destination outside of China, it can do so provided it undergoes a “security assessment.”

On March 21, 2017, New York Attorney General Eric Schneiderman announced that the New York Office of the Attorney General received over 1,300 data breach notifications in 2016, a 60 percent increase from 2015. The reported breaches led to the exposure of personal information of 1.6 million New York residents. According to the Attorney General’s report, 46 percent of the exposed personal information consisted of Social Security numbers, and 35 percent consisted of financial account information. Attorney General Schneiderman cited the updated New York State Department of ...

On March 17, 2017, the Federal Trade Commission announced that Upromise, Inc., (“Upromise”) agreed to pay $500,000 to settle allegations (the “Settlement”) that it violated the terms of a 2012 consent order (the “2012 Order”) that required Upromise to provide notice to consumers regarding its data collection and use practices, and obtain third-party audits.

On March 9, 2017,  Home Depot Inc. (“Home Depot”) reached an agreement that includes the payment of $25 million and the implementation of new data security measures to resolve a putative class action brought by financial institutions impacted by the company’s 2014 data breach.

On February 13, 2017, the Parliament of Australia passed legislation that amends the Privacy Act of 1988 (the “Privacy Act”) and requires companies with revenue over $3 million AUD ($2.3 million USD) to notify affected Australian residents and the Australian Information Commissioner (the “Commissioner”) in the event of an “eligible data breach.”

On February 15, 2017, the European Data Protection Supervisor (“EDPS”) published its Priorities for 2017 (the “EDPS Priorities”). The EDPS Priorities consist of a note listing the strategic priorities and a color-coded table listing the European Commission’s proposals that require the EDPS’ attention, sorted by level of priority.

On February 4, 2017, the Cyberspace Administration of China published a draft of its proposed Measures for the Security Review of Network Products and Services (the “Draft”). Under the Cybersecurity Law of China, if an operator of key information infrastructure purchases network products and services that may affect national security, a security review is required. The Draft provides further hints of how these security reviews may actually be carried out, and is open for comment until March 4, 2017.

Last month, the Standing Committee of the National People’s Congress of China published a full draft of the E-commerce Law (the “Draft”) and is giving the general public an opportunity to comment on the draft through January 26, 2017.

On December 20, 2016, the FTC announced that it has agreed to settle charges that Turn Inc. (“Turn”), a company that enables commercial brands and ad agencies to target digital advertising to consumers, tracked consumers online even after consumers took steps to opt out of tracking.

Recently, the Ministry of Industry and Information Technology of the People’s Republic of China published a draft of the new Notice on Regulating Business Behaviors in the Cloud Service Market (Draft for Public Comments) (the “Draft”) for public comment. The Draft is open for comment until December 24, 2016.

On December 14, 2016, the FTC announced that the operating companies of the AshleyMadison.com website (collectively, the “Operators”) have settled with the FTC and a coalition of state regulators over charges that the Operators deceived consumers and failed to protect users’ personal information. The FTC worked with a coalition of 13 states, the Office of the Privacy Commissioner of Canada and the Office of the Australian Information Commissioner to resolve this matter, which was initiated in the wake of the website’s July 2015 data breach.

Recently, the U.S. District Court for the Northern District of Georgia dismissed a shareholder derivative lawsuit against Home Depot Inc. (“Home Depot”) arising over claims that Home Depot’s directors and officers (the “Defendants”) acted in bad faith and violated their duties of care and loyalty by disregarding their oversight duties in connection with a 2014 data breach. The case is In re Home Depot Inc. S’holder Derivative Litig., N.D. Ga., No. 1:15-CV-2999-TWT.

On November 23, 2016, Bloomberg BNA reported that the Hague Administrative Court in the Netherlands upheld a decision by the Dutch Data Protection Authority that WhatsApp was in breach of the Dutch Data Protection Act (the “Act”) on account of its alleged failure to identify a representative within the country responsible for compliance with the Act, despite the processing of personal data of Dutch WhatsApp users on Dutch smartphones. WhatsApp reportedly faces a fine of €10,000 per day up to a maximum of €1 million ...

Recently, German Chancellor Angela Merkel spoke at Germany’s 10th National IT Summit, and called for EU Member States to take a pragmatic approach to the application of EU data protection laws. Chancellor Merkel warned that a restrictive interpretation of data protection laws risks undermining the development of big data projects in the EU. Ahead of the introduction of the General Data Protection Regulation throughout the EU in May 2018, Merkel argued that, more than simply preventing the excesses of personal data use, data protection law should serve to enable emerging data ...

On November 14, 2016, Lincoln Financial Securities Corp. (“LFS”), a subsidiary of Lincoln Financial Group, entered into a settlement (the “Settlement”) with the Financial Industry Regulatory Authority (“FINRA”), requiring LFS to pay a $650,000 fine and implement stronger cybersecurity protocols following a 2012 hack into its cloud-based server.

On November 7, 2016, Adobe Systems Inc. (“Adobe”) entered into an assurance of voluntary compliance (“AVC”) with 15 state attorneys general to settle allegations that the company lacked proper measures to protect its systems from a 2013 cyber attack that resulted in the theft of the personal information of millions of customers. Under the terms of the AVC, Adobe must pay $1 million to the attorneys general and implement new data security policies and practices.

On November 7, 2016, the Standing Committee of the National People’s Congress of China enacted the final Cybersecurity Law after it held its third reading of the draft Cybersecurity Law on October 31, 2016. The first draft of the Cybersecurity Law was published for comment more than a year ago, followed by the second draft in July this year. The final Cybersecurity Law will apply from June 1, 2017.

This post has been updated. 

On October 27, 2016, the Federal Communications Commission (“FCC”) announced the adoption of rules that require broadband Internet Service Providers (“ISPs”) to take steps to protect consumer privacy (the “Rules”). According to the FCC’s press release, the Rules are intended to “ensure broadband customers have meaningful choice, greater transparency and strong security protections for their personal information collected by ISPs.” 

Recently, the Cyberspace Administration of China published for public comment a draft of the Regulations on the Online Protection of Minors (“Draft Regulations”). The Draft Regulations are open for comment until October 31, 2016.

On October 25, 2016, the Federal Trade Commission released a guide for businesses on how to handle and respond to data breaches (the “Guide”). The 16-page Guide details steps businesses should take once they become aware of a potential breach. The Guide also underscores the need for cyber-specific insurance to help offset potentially significant response costs.

On October 19, 2016, the International Trade Administration issued a press release reaffirming the commitment of both the U.S. Department of Commerce and Japan’s Personal Information Protection Commission (the “PPC”) to continue implementation of the APEC Cross-Border Privacy Rules (“CBPR”) system in order to foster the protection of personal information transferred across borders. According to the press release, the PPC’s “recent decision to recognize the system as a mechanism for international data transfers in the implementing guidelines for Japan’s amended privacy law marks an important milestone for the development of the APEC CBPR system in Japan.” Going forward, both agencies also have committed to cooperate in raising awareness and encouraging other APEC member economies to implement the CBPR system.

Recently, the Centre for Information Policy Leadership (“CIPL”) at Hunton & Williams LLP, a privacy and information policy think tank based in Brussels, London and Washington, D.C., and Telefónica, one of the largest telecommunications company in the world, issued a joint white paper on Reframing Data Transparency (the “white paper”). The white paper was the outcome of a June 2016 roundtable held by the two organizations in London, in which senior business leaders, Data Privacy Officers, lawyers and academics discussed the importance of user-centric transparency to the data driven economy.

On October 27, 2016, the Federal Communications Commission (“FCC”) will vote on whether to finalize proposed rules (the "Proposed Rules”) concerning new privacy restrictions for Internet Service Providers (“ISPs”). The Proposed Rules, which revise previous versions introduced earlier this year, would require customers’ explicit (or “opt-in”) consent before an ISP can use or share a customer’s personal data, including web browsing and app usage history, geolocation data, children’s information, health information, financial information, email and other message contents and Social Security numbers.

On October 3, 2016, the Texas Attorney General announced a $30,000 settlement with mobile app developer Juxta Labs, Inc. (“Juxta”) stemming from allegations that the company violated Texas consumer protection law by engaging in false, deceptive or misleading acts or practices regarding the collection of personal information from children.

On September 27, 2016, the French Data Protection Authority (“CNIL”) announced the adoption of two new decisions, Single Authorizations AU-052 and AU-053, that will now cover all biometric access control systems in the workplace. These two new decisions repeal and replace the previous biometric decisions adopted by the CNIL and lay down the CNIL’s new position on biometric systems used to control access to the premises, software applications and/or devices in the workplace.  

On September 23, 2016, the French Data Protection Authority ("CNIL") published the results of the Internet sweep on connected devices. The sweep was conducted in May 2016 to assess the quality of the information provided to users of connected devices, the level of security of the data flows and the degree of user empowerment (e.g., user’s consent and ability to exercise data protection rights).

On September 22, 2016, Korean law firm Bae, Kim & Lee LLC released a Legal Update outlining amendments to Korea’s Personal Information Protection Act (“PIPA”) and the Act on the Promotion of IT Network Use and Information Protection (“IT Network Act”).

On September 15, 2016, the New Jersey Senate unanimously approved a bill that seeks to limit retailers’ ability to collect and use personal data contained on consumers’ driver and non-driver identification cards. The bill, known as the Personal Information and Privacy Protection Act, must now be approved by the New Jersey Assembly.

Recently, the National Privacy Commission (the “Commission”) of the Philippines published the final text of its Implementing Rules and Regulations of Republic Act No. 10173, known as the Data Privacy Act of 2012 (the “IRR”). The IRR has a promulgation date of August 24, 2016, and went into effect 15 days after the publication in the official Gazette.

On September 8, 2016, Advocate General Paolo Mengozzi of the Court of Justice of the European Union (“CJEU”) issued his Opinion on the compatibility of the draft agreement between Canada and the European Union on the transfer of passenger name record data (“PNR Agreement”) with the Charter of Fundamental Rights of the European Union (“EU Charter”). This is the first time that the CJEU has been called upon to issue a ruling on the compatibility of a draft international agreement with the EU Charter.

On August 29, 2016, the Federal Trade Commission announced that it is seeking public comment on the Gramm-Leach-Bliley Act (“GLB”) Safeguards Rule. The GLB Safeguards Rule, which became effective in 2003, requires financial institutions to develop, implement and maintain a comprehensive information security program to safeguard customer information.

Last month, the People’s Republic of China’s Ministry of Transportation, Ministry of Industry and Information Technology and six other administrative departments jointly published the Interim Measures for the Administration of Operation and Services of E-hailing Taxis (the “Measures”). E-hailing is an increasingly popular business in China and has already become a compelling alternative to the traditional taxi. The Measures seek to regulate this emerging industry, and will come into effect on November 1, 2016. Below is a summary of the key requirements.

Recently, the People’s Republic of China’s Ministry of Public Security, the National Development and Reform Commission and six other administrative departments jointly published the Announcement on Regulating the Administration of the Use of Resident Identity Cards (the “Announcement”). The Announcement came into effect on July 15, 2016, the date of its issuance.

The Announcement reiterates existing prohibitions against leasing, lending or assigning a resident identity card to another person, and reiterates an existing requirement that resident identity cards must not be seized or held as a security by government agencies, related entities or their staff.

The State Administration for Industry and Commerce of the People’s Republic of China published a draft of its Implementing Regulations for the P.R.C. Law on the Protection of the Rights and Interests of Consumers (the “Draft”) for public comment. The draft is open for comment until September 5, 2016.

On July 29, 2016, the Federal Trade Commission (“FTC”) announced that it had issued an opinion and final order concluding that LabMD, Inc. (“LabMD”) violated the unfairness prong of Section 5 of the FTC Act by failing to maintain reasonable security practices to protect consumers’ sensitive personal information. The unanimous decision reverses a November 2015 administrative law judge’s initial decision that, as we previously reported, dismissed the FTC’s charges against LabMD for failing to show that LabMD’s allegedly unreasonable data security practices caused, or were likely to cause, substantial consumer injury.

On July 5, 2016, the Standing Committee of the National People’s Congress of the People’s Republic of China (the “Standing Committee”) published the full second draft of the Cybersecurity Law (the “second draft”). The publication of the second draft comes after the Standing Committee’s second reading of the draft on June 27, 2016. The public may comment on the second draft of the Cybersecurity Law until August 4, 2016.

On June 28, 2016, the State Internet Information Office of the People’s Republic of China published the Administrative Provisions on Information Services for Mobile Internet Applications (the “App Administrative Provisions”). This is the first regulation that expressly regulates mobile apps in the People’s Republic of China. Before the App Administrative Provisions were published, the P.R.C. Ministry of Industry and Information Technology had published a draft of the Interim Provisions on the Preinstallation and Management of the Distribution of Mobile Intelligent Terminal Applications (“Interim Provisions”). The comment period for the Interim Provisions draft expired six months ago and i’s still uncertain when it will become effective. According to unofficial statistics, domestic app stores have more than 4 million apps in inventory presently, and the number is growing. Those apps will now become highly regulated products under the App Administrative Provisions.

On June 27, 2016, the Standing Committee of the National People’s Congress of the People's Republic of China held a second reading of the draft Cybersecurity Law (the “second draft”). The law is aimed at strengthening the protection and security of key information infrastructure and important data in China. As we previously reported, the first draft of the Cybersecurity Law was published for comment almost a year ago, but the National People’s Congress has not published the full second draft of the Cybersecurity Law to date.

On June 25, 2016, the Cyberspace Administration of China published its new Administrative Provisions on Internet Information Search Services (the “Provisions”). The Provisions will come into effect on August 1, 2016.

This post has been updated. 

On June 17, 2016, the National Privacy Commission (the “Commission”) of the Philippines released draft guidelines entitled, Implementing Rules and Regulations of the Data Privacy Act of 2012 (“IRR”), for public consultation.

Under the IRR, the processing of personal data has to adhere to the principles of transparency, legitimate purpose and proportionality. The IRR defines personal data as personal information, sensitive information and privileged information. Sensitive information refers to personal information about an individual’s race, ethnicity, health, education, genetic or sexual life of a person, proceedings related to an offense committed by a person, health records and tax returns. According to the IRR, the personal information controller should take organizational, physical and technical security measures for data protection. Such security measures include the designation of a privacy officer, limitations on physical access and the adoption of technical and logical security measures.

On June 22, 2016, the Federal Trade Commission announced a settlement with Singaporean-based mobile advertising network, InMobi, resolving charges that the company deceptively tracked hundreds of millions of consumers’ locations, including children, without their knowledge or consent. Among other requirements, the settlement orders the company to pay $950,000 in civil penalties. 

On June 8, 2016, the Federal Trade Commission announced that Practice Fusion, an electronic health records company, agreed to settle FTC charges that the company misled consumers about the privacy of doctor reviews submitted to the company.

On May 19, 2016, the U.S. Department of Commerce’s National Telecommunications and Information Administration (“NTIA”) announced that its multistakeholder process to develop best practices to address privacy, transparency and accountability issues related to private and commercial use of unmanned aircraft systems (“UAS”) had concluded with the group reaching a consensus on a best practices document. As we previously reported, the NTIA announced in March 2015 the multistakeholder process in response to a Presidential Memorandum issued by the White House in February 2015, which directed NTIA to facilitate discussion between private sector entities to develop standards for commercial UAS use.

On April 26, 2016, Korean law firm Bae, Kim & Lee LLC released a Privacy News Alert outlining amendments to Korea’s Personal Information Protection Act (“PIPA”) and the Act on the Promotion of IT Network Use and Information Protection (“IT Network Act”). According to Tae Uk Kang, partner at Bae, Kim & Lee and author of the alert, these amendments to PIPA and the IT Network Act “reflect the general trend concerning the Korean data privacy policy, which is intended to achieve more stringent regulation (and sanctions) of processing personal information.”

On April 13, 2016, Nebraska Governor Pete Ricketts signed into law LB 835 (the “Bill”), which among other things, adds a regulator notification requirement and broadens the definition of “personal information” in the state’s data breach notification statute, Neb. Rev. Stat. §§ 87-802 to 87-804. The amendments take effect on July 20, 2016.

On April 6, 2016, U.S. District Judge R. Gary Klausner approved a settlement in Corona v. Sony Pictures Entertainment, Inc., No. 14-CV-09600 (RGK). As we previously reported, the litigation centered on a data breach involving the stolen personal information of at least 15,000 former and current employees. After a partial success on its motion to dismiss, Sony still faced potential liability for negligence based on its three-week delay in notifying its employees of the data breach, as well as statutory claims under the California Confidentiality of Medical Information Act and the Unfair Competition Law.

On April 6, 2016, the Federal Trade Commission formally welcomed the updated Recommendation on Consumer Protection in E-commerce (the “Recommendation”) issued by the Organization for Economic Cooperation and Development (“OECD”) on March 24, 2016, endorsing the Recommendation’s broadened scope and increased consumer protections that “are designed to strengthen consumers’ trust in the expanding electronic marketplace.”

On March 22, 2016, the Ministry of Commerce of the People’s Republic of China published drafts of its proposed (1) Specifications for Business Services in Mobile E-commerce (“Mobile E-commerce Specifications”) and (2) Specifications for Business Services in Cross-border E-commerce (“Cross-border E-commerce Specifications”). A public comment period on these drafts is now open. Comments will be accepted until May 31, 2016.

On March 14, 2016, the UK Information Commissioner’s Office (“ICO”) published a guide, Preparing for the General Data Protection Regulation (GDPR) – 12 Steps to Take Now. The guide, which is a high-level checklist with accompanying commentary, sets out a number of points that should inform organizations’ data privacy and governance programs ahead of the anticipated mid-2018 entry into force of the GDPR.