Technology

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

Orrick Launches Automated GDPR Readiness Tool for Companies

Today, Orrick announced the launch of our automated General Data Protection Regulation (GDPR) Readiness Assessment Tool, which makes the EU’s new, complex, data privacy law, the GDPR, more accessible. The free tool is available to all organizations and allows businesses to stress test their compliance against the upcoming GDPR. It segments the GDPR into 14 workable themes and guides the user through a series of dynamic questions relating to each theme. Upon completion of the assessment, the tool provides a complimentary tailored report summarizing the likely key impacts of the GDPR for an organization. READ MORE

New York DFS Cyber Rules Go Live: Here’s Your Roadmap

August 28, 2017 marks the end of the initial 180-day grace period for compliance under the New York Department of Financial Services’ “first-in-the-nation” cybersecurity regulations (the “Rules”).  The initial regulations were proposed last year, but NY DFS received robust public comments that led to significant amendments.  While the proposed regulations set out proscriptive, one-size-fits-all requirements, the final Rules align more closely to flexible federal, financial sector guidance, captured in the NIST cybersecurity framework and the FFIEC cybersecurity assessment tool.  Accordingly, the final Rules require that cybersecurity programs be calibrated to periodic “risk assessments” that give entities discretion to specify the criteria used to identify, evaluate, and remediate risks, in the context of technological developments and corporate controls.

While covered entities are technically required to be in compliance with the Rules as of Monday, there are additional transitional periods for certain items (see below), and entities have until February 15, 2018 to submit their first certifications to NY DFS.  For organizations still working through compliance requirements, the below steps may help to prioritize and implement a work plan. READ MORE

No Harm, But Foul? FTC Sues Internet of Things Maker D-Link for Security “Vulnerabilities” Despite No Allegations of Breach

Shortly after the new year, the Federal Trade Commission filed suit in the Northern District of California against D-Link Corporation, a Taiwan-based maker of wireless routers, Internet Protocol (IP) cameras, and software used in consumer electronics (such as baby monitors). The complaint alleges that D-Link failed to reasonably secure its products from hackers. Notably, the FTC has not alleged that D‑Link products were exploited by hackers or that a data breach or cyberattack resulted from any alleged security vulnerabilities. Rather, the action is based squarely on security vulnerabilities that “potentially compromis[ed] sensitive consumer information, including live video and audio feeds from D-Link IP cameras” and marketing statements made by D-Link that touted the products’ security features.

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EU Proposes Overhaul to Privacy and Electronic Communications

NIS Directive

January 10, 2017 marked another important step towards reform of the EU data protection framework, with the release of the EU Commission’s proposals for a new Regulation governing privacy and electronic communications.

The draft Regulation, which goes beyond the scope of the current e-Privacy Directive in significant ways, would apply directly without the need for Member States to implement local law in the same way as the General Data Protection Regulation (“GDPR”). Like the e-Privacy Directive, the Regulation sets out rules on, among others, the use and confidentiality of electronic communications and metadata, use of cookies and direct marketing by electronic means.

The main aims of the draft Regulation are to update the ePrivacy Directive to reflect new technologies and to better align it with GDPR. In addition to taking effect on the same day as the GDPR (25th May, 2018), penalties for non-compliance envisaged by the draft Regulation are the same as the GDPR, (i.e. potentially fines of €20m or 4% of annual global turnover, whichever is higher).

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Data Protection Officer and IT Manager – Two Jobs That Do Not Match

Companies required to appoint a data protection officer (“DPO” ) in Europe should carefully consider which candidate is best to select for the job. A company established in Bavaria, Germany, was recently fined by the Bavarian data protection authority (Bayerisches Landesamt für Datenschutzaufsicht, “BayLDA“) for appointing a DPO who at the same time held an operational position as an IT manager. The appointment was deemed to create a conflict of interests between the two functions. This decision could potentially influence the interpretation of the upcoming EU General Data Protection Regulation (“GDPR“) and thus influence the appointment of DPOs by international companies.

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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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What is the FTC Doing About Privacy and Drones?

4 Major Takeaways from Federal Trade Commission FTC October 2016 panel on drones & privacy

Last week, as part of its Fall Technology Series, the Federal Trade Commission (“FTC”) hosted a much-anticipated workshop to explore the privacy concerns associated with drones. Although many in the audience hoped that this workshop would provide some insight into the FTC’s perspective and position on regulation of drones and privacy, the workshop left attendees with more questions than answers. We were there, and provide you with some of the key takeaways.

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What Happens When My Company Receives a National Security Letter? A Primer.

Cyber Security Keyboard Button National Cybersecurity Awareness Month

Even today, most companies—even technology companies—do not think they have information that the U.S. Government wants or needs, particularly as it might relate to a national security investigation. The reality is that as terrorists and others who threaten national security use a broader spectrum of technology resources to communicate and to finance and conduct operations, the U.S. Government has significantly increased its collection of data from technology companies and others.

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European Parliament Passes Long-Anticipated Network and Information Security Directive

NIS Directive

On July 6, 2016, the European Parliament passed the Network and Information Security (“NIS”) Directive, over three years after the initial draft was proposed.  The Directive will enter into force in August 2016.  EU Member States will then have 21 months to transpose the Directive into their national laws and 6 additional months to identify the operators of certain essential services that are subject to the Directive’s requirements.

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