Policy

E-Commerce Businesses Beware: The Freedom to Contract does not Trump Reasonable Privacy Expectations

The EDPB’s new Guidelines on Article 6(1)(b) may severely limit e-commerce business’ ability to enhance data processing by unilaterally defining contractual services.

On October 8, 2019, the European Data Protection Board (“EDPB”) released the “Guidelines 2/2019 on the processing of personal data under Article 6(1)(b) GDPR in the context of the provision of online services to data subjects” (the “Guidelines”) after public consultation. The text of the Guidelines is available here. Largely in line with previous guidance, the EDPB takes the view that companies cannot expand legal justifications for data processing operations based on broader definitions of their services. The legal justification of a processing for performing a contract does not cover processing operations, which, reasonably, the individuals would not expect when entering into the contract. Businesses should thus carefully review the legal justifications for the processing operations and be prepared to consider limitations on certain data processing should individuals object. READ MORE

Putting Individuals In The (Urth)Box: FTC Goes After Individual Executives For Unfair And Deceptive Practices

In an increasing trend, the Federal Trade Commission (FTC) joined other federal regulators seeking to hold individuals – not just companies – liable in enforcement proceedings. The most recent target was San Francisco-based UrthBox, Inc. and its principal, Behnam Behrouzi. Specifically, Urthbox and Behrouzi agreed to settle FTC allegations that UrthBox engaged in unfair or deceptive acts or practices by: (1) failing to adequately disclose key terms of its “free trial” automatic renewal programs, and (2) misrepresenting that customer reviews were independent when, in fact, UrthBox provided customers with free products and other incentives to post positive reviews online.[1]

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Orrick Launches Automated Tool to Assess Readiness for California Consumer Privacy Act

Today, Orrick announced the launch of our automated CCPA Readiness Assessment Tool which helps businesses globally determine whether they are covered by the California Consumer Privacy Act (CCPA) and, if yes, their readiness to comply with the new law that is revolutionizing the United States privacy landscape. This free tool is available to all organizations and takes 10-30 minutes to complete.  It segments the CCPA into five workable themes and guides users through a series of dynamic questions relating to each theme. Upon completion of the questionnaire, the tool provides a free and comprehensive readiness assessment tailored to the business’s unique positioning and individual needs.

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Google to Pay $57 Million for GDPR Violations

 

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

California Sets the Standard With a New IoT Law

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 CLOUD Act, Explained

The Clarifying Lawful Overseas Use of Data (“CLOUD”) Act was enacted into law on March 23, 2018. The Act provides that U.S. law-enforcement orders issued under the Stored Communications Act (SCA) may reach certain data located in other countries – a key question in United States v. Microsoft Corporation, No. 17-2, a case argued before the Supreme Court on February 27.[1] Both the government and Microsoft recently agreed that the closely watched case is now moot following the CLOUD Act. READ MORE

SEC Commissioners Provide Guidance on Cybersecurity Disclosures After Wave of Record Incidents

Much has been written about the SEC’s interpretive guidance on cybersecurity disclosures, issued in late February, including Commissioner Stein’s statement that it under-delivers for investors, public companies, and the capital markets. As many observers have noted, the Commission largely repackaged the Division of Corporation Finance’s prior October 2011 guidance. Further, by issuing interpretive guidance, rather than engaging in formal rulemaking, the SEC’s pronouncement does not have the force and effect of law and is not accorded such weight in the adjudicatory process.[1]

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FTC Staff Issues Comments Discussing Key Security and Privacy Issues Surrounding Connected and Automated Vehicles

Given the explosive growth in the connectivity of every day “things,” several government agencies are focused on how best to support innovation and the benefits of an increasingly connected, data driven society, while weighing options for mitigating the cybersecurity and privacy risks relating to the Internet of Things.[1]  The pace of development with respect to connected cars and autonomous vehicles has drawn particular attention.   READ MORE

Plaintiffs’ Lawyer Predicts $1 Billion Settlement in Data Breach Case – But Where’s the “Harm”?

This week, a high profile plaintiffs’ firm (Edelson) stated that “if done right,” the data breach class actions against Equifax should yield more than $1 billion in cash going directly to more than 143 million consumers (i.e., roughly $7 per person).

No defendant to date has paid anything close to $1 billion.  In fact, the largest class settlements in breach cases hardly get close:  Target Stores paid $10 million (cash reimbursement for actual losses) and The Home Depot paid $13 million (cash reimbursement for actual losses + credit monitoring).  Will Equifax be different?

Part of the answer revolves around the increasingly debated role and importance of “consumer harm” in resolving data breach disputes. READ MORE

DFARS and DIB: Compliance Steps for DoD’s Newly Finalized Cybersecurity Rules for Contractors

Department of Defense Finalized Cybersecurity Rules for Contractors and Other Awardees. The First rule amends the Defense Federal Acquisition Regulation Supplement and went into effect on October 21, 2016 (“DFARS Rule”). The other rule modifies the previously voluntary DoD cybersecurity information sharing program (“DIB Rule”) and is set to come into effect on November 3, 2016. Aerial view of the Pentagon, the Department of Defense headquarters in Arlington, Virginia

For businesses that work with the U.S. Department of Defense (“DoD”), two important rules for safeguarding certain categories of sensitive information and reporting cyber incidents were recently finalized, updating the interim rules promulgated in late 2015. The first rule amends the Defense Federal Acquisition Regulation Supplement (“DFARS Rule”) and went into effect on October 21, 2016.  The second rule modifies the previously voluntary DoD cybersecurity information-sharing program in connection with the Defense Industrial Base (“DIB Rule”) and went into effect on November 3, 2016.

We previously explained the changes brought about by the interim rules. Here, we explain what changed after the rules’ comment periods, and provide suggestions for compliance.

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