On October 10, 2019, the California Attorney General added to the complexity of the California Consumer Privacy Act of 2018 (“CCPA”) by releasing long-awaited proposed regulations that provide guidance on various elements of the CCPA. The text of the proposed regulations is available here and the California Attorney General has made other documents and information relating to the proposed regulations available here. The comment period for the proposed regulations will close on December 6, 2019. Interested parties may review and provide written comments addressing the proposed regulations prior to that date or attend one of four scheduled public hearings on the proposed regulations to be held on December 2-5, 2019. READ MORE
On August 21, 2019, the U.S. Court of Appeals for the Seventh Circuit held in FTC v. Credit Bureau Center, LLC, 2019 WL 3940917 (7th Cir. 2019) that the Federal Trade Commission (“FTC”) lacks authority to obtain monetary relief under Section 13(b) of the FTC Act. The FTC has relied on Section 13(b) to seek money relief in consumer protection enforcement actions, including privacy and cybersecurity matters, and had, prior to the Credit Bureau decision, suggested an intent to do so more frequently in the future. READ MORE
Amidst mounting pressure to pursue cybersecurity more aggressively, the Federal Trade Commission (“FTC”), the federal government’s most active enforcer in the space, has recently imposed increasingly stringent cybersecurity requirements in its consent orders. Given that FTC consent orders typically carry 20-year terms and a potential fine of $42,530 (which the FTC may contend applies to each consumer subject to a breach), it is vital for companies faced with an FTC cybersecurity investigation to take every possible step to narrow the scope of relief requested by the FTC. Several recent FTC cybersecurity settlements illustrate an emerging pattern: a company that litigates may secure a better deal than it would have received in an initial settlement, if not defeat the action entirely. But when considering whether to settle or litigate with the FTC, companies must still balance the various legal, business, and reputational risks at stake.
While the California Consumer Privacy Act (“CCPA”) has inspired many states to consider their own consumer privacy bills, including Nevada which recently enacted a new law, not to be lost in the CCPA-focused frenzy is the fact that states continue to revise their data breach notification statutes. In recent weeks, the new Massachusetts breach notification amendment has gone into effect, New Jersey, Maryland, Oregon, Texas, and Washington have enacted their own breach notification amendments, and Illinois has proposed a bill that is poised to become law in the near term. READ MORE
Privacy & Cybersecurity Litigation partner Michelle Visser, counsel David Cohen and associate Nicole Gelsomini authored this blog post for the Washington Legal Foundation on the unsettled state of the law on constitutional standing in privacy and cybersecurity cases in the wake of two recent Supreme Court developments. Constitutional standing challenges are, and will continue to be, an important potential tool for privacy and cybersecurity defendants seeking to dismiss certain class actions brought in federal court. To establish standing, a private plaintiff must show, among other things, that he or she faces an actual or imminent concrete injury from the defendant’s conduct. As explained in the Washington Legal Foundation post, however, the Supreme Court recently passed on two chances to clarify the test that will govern this standing inquiry, leaving defendants to wade through conflicting and ambiguous lower court precedent. The uncertain and nuanced state of this area of law underscores the importance of retaining experienced cybersecurity and privacy defense counsel when faced with this type of suit.
In June 2018, medical laboratory LabMD obtained the first-ever court decision overturning a Federal Trade Commission (FTC) cybersecurity enforcement action. (The team directing that effort – led by Doug Meal and Michelle Visser – joined Orrick in January 2019). There, the Eleventh Circuit held that an FTC cease-and-desist order imposing injunctive relief requiring LabMD to implement “reasonable” data security was impermissibly vague. In the wake of LabMD, the FTC’s new Chairman, Joseph Simons, stated that he was “very nervous” that the agency lacked the remedial authority it needed to deter allegedly insufficient data security practices and that, among other things, the FTC was exploring whether it has additional untapped authority it could use in this space. In this regard, Chairman Simons and Commissioner Rebecca Kelly Slaughter announced that the FTC is examining whether it can “further maximize its enforcement reach, in all areas, through strategic use of additional remedies” such as “monetary relief.” READ MORE
On January 21, 2019, the French data protection supervisory authority (“CNIL”) fined Google €50 million (approximately $57 million) for violating the European General Data Protection Regulation (“GDPR”). The fine penalizes Google for failing to comply with the GDPR’s transparency and notice requirements, and for failing to properly obtain consent from users for ads personalization. This is the largest GDPR fine imposed to date and the first action against a major global tech player. The CNIL’s decision sends an important message to companies that tough enforcement actions are not just a theoretical threat. Companies should look closer at data protection compliance and particularly work on their notices and consent forms. READ MORE
This past September Governor Brown signed into law Senate Bill 327, which is the first state law designed to regulate the security features of Internet of Things (IoT) devices. The bill sets minimum security requirements for connected device manufacturers, and provides for enforcement by the California Attorney General. The law will come into effect on January 1, 2020, provided that the state legislature passes Assembly Bill 1906, which is identical to Senate Bill 327. READ MORE
The California Consumer Privacy Act of 2018 (the “CCPA” or the “Act”), which we reported on here and here continues to make headlines as the California legislature fast-tracked a “clean up” bill to amend the CCPA before the end of the 2018 legislative session. In a flurry of legislative activity, the amendment bill (“SB 1121” or the “Amendment”) was revised at least twice in the last week prior to its passage late in the evening on August 31, just hours before the legislative session came to a close. The Amendment now awaits the governor’s signature.
Although many were hoping for substantial clarification on many of the Act’s provisions, the Amendment focuses primarily on cleaning up the text of the hastily-passed CCPA, and falls far short of addressing many of the more substantive questions raised by companies and industry advocates as to the Act’s applicability and implementation. READ MORE
Game-changing Calif. Consumer Privacy Act of 2018 puts statutory breach damages on the table
The recently-enacted California Consumer Privacy Act of 2018 is a game-changer in a number of respects. The Act imports European GDPR-style rights around data ownership, transparency, and control. It also contains features that are new to the American privacy landscape, including “pay-for-privacy” (i.e., financial incentives for the collection, sale, and even deletion of personal information) and “anti-discrimination” (i.e., prohibition of different pricing or service-levels to consumers who exercise privacy rights, unless such differentials are “reasonably related to the value provided to the consumer of the consumer’s data”). Privacy teams will be hard at work assessing and implementing compliance in advance of the January 1, 2020 effective date. READ MORE