Category: Communication Media & Internet

FTC Provides Guidance to Social Media Influencers in Live Twitter Chat

Influencer marketing is the popular practice of using individuals with large social media audiences—known as “influencers”—to advertise products and services through their social media accounts. The Federal Trade Commission (FTC) has made it clear that influencers must clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media. To emphasize this point, the FTC sent letters to 90 influencers and marketers earlier this year reminding them of their obligation to make appropriate disclosures on ads. The FTC has also provided Endorsement Guides with answers to frequently asked questions from advertisers, ad agencies, bloggers, and others.

Most recently the FTC hosted a live Twitter chat to answer questions and provide guidance on influencer marketing. The FTC covered a number of topics during the chat, from the use of the hashtag “#ad” as a disclosure to built-in disclosure tools on popular social media platforms. Key takeaways from the Twitter chat are:

  • Using “#ad” is a sufficient disclosure, as long as it is hard to miss in the post.

  • Even if an influencer posts from abroad, U.S. law still applies if it is reasonably foreseeable that the posts will affect U.S. consumers.

  • Built-in tools such as the “Paid” tag on Facebook and “includes paid promotion” mark on YouTube are not sufficient to disclose that a post is an ad.

  • For Snapchat and Instagram posts, the FTC suggests superimposing a disclosure over the images. For a series of images, a disclosure on the first image may be sufficient, as long as it stands out, and viewers have time to see it.

The Twitter chat followed shortly after the FTC announced its first settlement with two social media influencers, Trevor Martin and Thomas Cassell, for endorsing the online gambling service CSGO Lotto without disclosing that they were the owners of the company, as well as paying other well-known social media influencers to promote the company without requiring them to disclose the payments in their posts.

Click here to read a transcript of the questions and the FTC’s responses during the official Twitter chat.

This post was written by Edward J. McAndrew, Philip N. Yannella, Kim Phan & Roshni Patel of Ballard Spahr LLP Copyright ©
For more legal analysis go to The National Law Review

Recording Conversations with Your Cellphone: with Great Power Comes Potential Legal Liability

In the cellphone age, nearly everyone walks around with a multi-tasking recording device in their pocket or purse, and it comes in handy for many of our modern problems: Your dog suddenly started doing something adorable? Open your video app and start rolling. Need to share that epic burger you just ordered with your foodie friends? There’s an app for that. Want to remember the great plot twist you just thought of for that novel you’ve been working on? Record a voice memo.

Sometimes, though, the need arises to record more serious matters. Many people involved in lawsuits choose to record conversations with their phones, all in the name of preserving evidence that might be relevant in court. People involved in contentious divorce or child custody cases, for example, might try to record a hostile confrontation that occurred during a pickup for visitation. Conversely, others might be worried that an ex-spouse has secretly recorded a conversation and plans to use it against them out of context.

But while everyone has the power to record just about anything with few swipes on their phone, do they have the legal right to do so? If not, what are the possible consequences? Can you even use recorded conversations in court? Consider these important questions before your press record.

Criminal Liability: Can you go to jail just for recording someone’s conversation?

The short answer: Yes. Under Michigan’s Eavesdropping law,[1] it is a felony punishable by up to two years and $2,000 to willfully use any device to eavesdrop on (meaning to overhear, record, amplify, or transmit) a conversation without the consent of all participants in that conversation.[2]It is also a felony for a person to “use or divulge” any information that they know was obtained through illegal eavesdropping.[3]

But there is one important distinction that Michigan courts have recognized: if you are a participant in the conversation, then you do not need permission of other participants to record the conversation (at least not when it comes to the eavesdropping law; there may be other laws that apply, as discussed below).[4] This makes sense given the purposes of the law. The theory is that if you are a participant in the conversation, then other participants at least have a chance to judge your character and determine if you are the kind of person who might relay the conversation to others (either verbally or by making a recording).

The bottom line is that if you use a device, like your cellphone, to record, overhear, amplify, or transmit a conversation that you are not a part of without the permission of all participants, you could face criminal consequences.

Civil Liability: If someone records your private conversation, can you file a lawsuit against them?

The short answer: Yes. The eavesdropping statute allows eavesdropping victims to bring a civil lawsuit against the perpetrator.[5] But the same distinction applies; you cannot sue someone for recording a conversation that they participated in.

Before filing a civil eavesdropping claim, though, consider what if anything there is to gain. The eavesdropping statute permits a judge to issue an injunction prohibiting the perpetrator from further eavesdropping. This may be a valuable remedy if there is a risk that the eavesdropper would otherwise continue eavesdropping on your conversations. The statue also allows a plaintiff to recover actual damages and punitive damages from the wrongdoer. In many cases, actual damages will likely be minimal, and punitive damages are subject to the whims of the judge or jury deciding the case. A result, the cost of litigation may exceed any monetary recovery unless actual damages are significant or the eavesdropper’s conduct was egregious enough to elicit a large punitive award from a jury.

Evidence and Admissibility: Can I use a recorded conversation in court?

Many people are familiar with the exclusionary rule that arises from the Fourth Amendment of the United States Constitution, which provides that if police officers obtain evidence as a result of an illegal search or seizure, then the prosecution is prohibited from using that evidence to support their case. This raises the question:

If a regular civilian obtains evidence by recording a conversation in violation of the eavesdropping statute, is that evidence automatically excluded from court proceedings?

The short answer: No. The exclusionary rule is specifically designed to curb the potentially oppressive power of the government in order to guarantee the protections of the Fourth Amendment, at the expense of excluding potentially valuable evidence from court proceedings. Since the Fourth Amendment only restricts government conduct, the exclusionary rule only applies to evidence obtained as a result of unconstitutional government action. As a result, even if a private citizen breaks the law and records your conversation, that recording is not automatically excluded from court.[6]

So does this mean you can use any recorded conversation in court whenever you want?

The short answer: No. Anything presented in court still needs to comply with the Rules of Evidence, and in many cases recorded conversations will not make the cut. A big reason is the hearsay rule, which says that out of court statements cannot be used to prove the truth of the matter asserted.[7] In other words, you can’t use a recording of your neighbor saying “I use my neighbor’s Wi-Fi” as evidence to prove that he was, in fact, using your Wi-Fi.

But there are many exceptions to the hearsay rule which might allow a recorded conversation into court. Salient among these exceptions is the rule that admissions of a party-opponent are not hearsay.[8] Consequently, if a man records his ex-wife’s conversation with her current husband, the hearsay rule will not prevent the man from using the recording of his ex-wife against her in a child custody case; the ex-wife is a “party-opponent” and her out-of-court statements are not considered hearsay.

Continuing this same example, note that the man’s actions would violate the eavesdropping statute (assuming he didn’t have permission to make the recording) because he was not a participant in the hypothetical conversation. But this violation would not keep the recording out of court. Nevertheless, if a prosecutor wanted to press charges, the man could be subject to criminal liability. And if the ex-wife was so inclined, she could file a civil lawsuit against the man and ask for an injunction and monetary damages.

Other Law: Is the eavesdropping statute the only law you need to worry about before recording all of your conversations?

The short answer: No, don’t hit record just yet. Even if you comply with the eavesdropping statute, there are still other potential pitfalls to be aware of. For instance, wiretapping laws govern the recording and interception of telephone calls and electronic communications, and carry criminal penalties. For inter-state phone calls, the laws of other states will come into play as well. And depending on the means you use to obtain a recording and what you do with the recording once you have it, you risk incurring civil liability for a variety of privacy torts, such as intrusion upon seclusion or public disclosure of private facts.

The safest route is to always get permission from everyone involved before recording a conversation or sharing a recorded conversation with anyone. If that’s not an option, consult with a lawyer who has had an opportunity to consider all of the facts involved in your case.

________________________________

[1] MCL 750.539 et seq.
[2] MCL 750.539a; MCL 570.539c.
[3] MCL 750.539e.
[4] See Sullivan v. Gray, 117 Mich. App. 476, 324 N.W.2d 58, 59 – 61 (1982).
[5] MCL 750.539h.
[6] See, e.g., Swan v. Bob Maxey Lincoln Mercury, No. 216564, 2001 WL 682371, at *2 n3 (Mich. Ct. App. Apr. 24, 2001)
[7] MRE 802.
[8] MRE 801(d)(2).

This post was written by Jeffrey D. Koelzer of  Varnum LLP © 2017
For more legal analysis go to The National Law Review

Troll Hunting: Practical Strategies for Businesses to Combat Anonymous Online Trolls

No matter the business you operate, modern commerce increasingly takes place online, rarely putting the consumer and your business face-to-face. A recent study revealed that approximately 80% of American consumers buy products online, and 74% of consumers think it is extremely or somewhat important to read online reviews before making a purchasing decision.[1]  The average consumer reviews three online sources for information before soliciting a local business, typically: a search engine, the business’s website, and a website containing reviews or testimonials.[2]  Small and local businesses are not immune to the internet’s influence, as nearly 40% of consumers seek out online testimonials, ratings, or reviews to evaluate when considering whether to engage a local business for products or services.[3]  In fact, consumers cite negative online ratings and reviews as the second greatest reason not to consider a local business for products or services, behind only high prices.[4]  

Because consumers consistently turn to online resources to determine whether to do business with you, managing your online reputation is an essential task. You must actively control information about your products, address negative reviews, optimize search engines, and improve your customers’ online experience. In fact, many companies employ full time personnel solely to manage their social media presence.

But monitoring your online reputation becomes even more critical when an anonymous user (aka a “troll”) begins posting harmful or false information. The danger lies in the very nature of the internet, as “any person with a phone line can become a town crier with a voice that resonates farther than it could from any soapbox.”[5]  When that voice spreads false information, interferes with your business, or divulges your trade secrets, what can you do to identify the anonymous user and hold them liable for the harm caused?

Understanding The First Amendment and Anonymous Online Speech

To pursue a claim against an anonymous online user, you must first understand the First Amendment protection afforded online speech. Internet speech is generally granted the same protection as traditional offline speech; that is, most types of speech on the internet are protected to some degree.[6]

The right to free speech online also includes a right to remain anonymous.[7]  Far from being hostile to such online secrecy, the courts have held that careful safeguards to protect anonymous online speech are important to preserve “the robust exchange of ideas and allows individuals to express themselves freely without fear of economic or official retaliation [or] concern about social ostracism.”[8] 

As in the traditional offline arena, some categories of speech, such as fighting words, obscenities, and false statements, are not protected by the First Amendment.[9]  Thus, when trolls exploit the anonymous nature of the internet to post false or damaging information about you, they often exceed the First Amendment’s protections for anonymous online speech. For example, anonymous online users may step beyond the boundaries of protected speech by:

• Creating an email account to distribute your CEO’s sensitive personal emails to senior management.[10]

• Creating online accounts to conduct a smear campaign against you with the objective of inducing employees to quit.[11]

• Posting reviews about working for you that disclose confidential or trade secret information.[12]

• Creating a website using your name to complain about your business practices and post negative reviews.[13]

• Posting false reviews of you online by posing as a former customer.[14]

If not for the use of an anonymous online persona, each of these actions could be addressed by filing a lawsuit against the troll. However, anonymity adds a layer of complication as you must either first find a way to unmask the troll’s identity or stop the harmful conduct by some other means.

Strategies to Address Harmful Online Comments Short of Litigation

Before filing a lawsuit to unmask your troll, first consider whether less costly means might stop the conduct or remove the harmful comments. This approach typically depends on the voluntary compliance of companies hosting the content, and thus is not guaranteed to succeed. However, the low cost of this initial step makes it worth considering. Further, pursuing these strategies, whether successful or not, may cause the troll to stop harming you, or to remove the content voluntarily, thereby accomplishing the end goal.

One alternative to litigation is to determine whether the online statements violate the online service provider’s “Terms of Service.” For example, Facebook’s® Terms of Service prohibit users from posting content that “infringes or violates someone else’s rights or otherwise violates the law” and authorizes Facebook to “remove any content or information” posted on Facebook that “violates this Statement or our policies.”[15]  Twitter® also requires users to ensure that posts comply “with applicable laws, rules, and regulations” and permits Twitter to remove “any Content.”[16]  Large online service providers typically offer reporting platforms where you can report a violation of the terms of service and ask to have the false or harmful content removed.[17] Thus, where a post or comment violates the terms of service, a letter to the internet service provider bringing the issue to its attention may be all that’s needed to get the offending content removed.

Another option is to request that search engines, such as Google® or Bing®, “de-index” the page on which the comments appear. “De-indexing” is a request that the search engine voluntarily remove a website from its index, thereby ensuring it will not appear in response to a search about you. Most search engines retain the right to remove offensive content. For example Google’s ® Terms of Service state that Google “may review content to determine whether it is illegal or violates our policies, and . . . may remove or refuse to display content that we reasonably believe violates our policies or the law.”[18]  The result is that, while the website containing the false statement still exists, it can’t be accessed in response to a search. The effectiveness of this step depends on whether the content clearly violates the applicable terms of service or is blatantly unlawful, and a search engine may require a court order finding the content to be unlawful before it will agree to de-index the website.

A final alternative is to address the comments from a public relations perspective. You can choose to simply engage the troll in the online forum itself, to address the falsity of the comments or steer the

discussion in a more beneficial direction. However, this approach carries significant risk that your comments may be used against you, or may even incite a more passionate, negative response. Thus, this approach should be reserved for unique factual situations that justify a public relations response instead of a legal one.

Identifying the Anonymous Online User

If you cannot stop the harmful online comments through one of the strategies above, you should consider filing a lawsuit to identify the troll and assert the appropriate claims against them. First, however, you need to analyze the conduct and determine whether you have a legal claim against the anonymous user. If so, you can file a lawsuit against the troll and attempt to uncover his or her identity.

Step One: Determine Whether the Conduct is Actionable

The types of claims available to combat online misconduct are generally the same as those available in traditional offline situations.

The most common claim pursued against trolls is a claim for defamation. When a person publishes false, harmful statements of fact about your business ethics or financial integrity, they are likely liable for defamation.[19]  Libel—defamation in writing—consists of publishing a false written statement, either deliberately or with at least a negligent disregard for the truth.[20] 

In evaluating whether you have a claim for defamation, you must candidly consider whether there is any truth to the comments, as truth is an absolute defense.[21]  Likewise, opinions are not actionable. So, if the statements are arguably just opinion, as opposed to a statement of fact (or an opinion that could reasonably be interpreted as stating facts), the anonymous speaker will not be liable.[22]  Finally, you must evaluate whether you will be deemed a “public figure,” in full or in a limited capacity.[23]  If you are a public figure, whether limited or not, you will be required to prove that the speaker acted with “reckless disregard of the truth.” Because this is a higher standard than negligence, there is a greater likelihood that the troll will not ultimately be held liable for defamation.

In addition to defamation, there are a number of other claims that you may be able to pursue against your troll:

• If the user is directing its harmful comments at a vendor, business partner, or potential customer, the user may be liable to you for tortious interference with a contract or a business expectancy. To succeed, you must have a valid contract or business expectancy; the anonymous user must both know about it and interfere with it, so as to cause its breach or termination; and have no legal justification for doing so.[24]

• If the user publishes false information about your products or services, the user may be liable for trade libel or business/product disparagement. Each of these claims has similar elements, requiring proof that the anonymous user posted a false statement concerning your products or services to dissuade a potential customer from doing business with you.[25] 

• If the user is a competitor, and the comments contain false or misleading advertisements about your products or services, the user may also be liable for unfair competition under the Lanham Act.[26]  

• If the user posts information containing your trade secrets, the user may be liable under state or federal trade secret laws.[27]

• If the user is a former employee, or had a contractual relationship with you, then the online conduct may violate provisions of that contract, such as nondisclosure or non-compete provisions.

This list is not exhaustive and there may be other potential claims to assert against an anonymous online user.

Step Two: File An Anonymous Lawsuit to Unmask the Troll

Once you identify a viable claim or claims against the anonymous online user, the next step is to file a lawsuit to discover the troll’s identity.

Such a lawsuit is typically filed against an anonymous defendant—John Doe for example—and a subpoena is then issued to the service provider or to the website hosting the content requiring it to identify the user. The service provider or website will likely object, and you will need to ask the Court for an order compelling disclosure of the user’s identity.

There is no universal standard governing when a court will order the disclosure of an anonymous user’s identity. However, most courts apply one of two generally-accepted tests, both of which require a significant showing early in the case that you are likely to succeed on your claims.

The less stringent test requires that you allege facts that—assumed to be true—demonstrate that the anonymous user committed an act giving rise to civil liability.[28]   Because the Court is looking only at whether you have sufficiently alleged a valid claim, your initial complaint is the operative document that the court will consider. You must also demonstrate to the Court’s satisfaction that (1) you have identified the anonymous user and the user is subject to personal jurisdiction; (2) you have made a good faith effort to locate and identify the anonymous user; and (3) the discovery sought is sufficiently limited to identify the appropriate user or users.[29]  This test, or some variation of the test, is used in some Federal Courts—typically in cases involving less protected forms of speech, like commercial speech—and state courts in Wisconsin, and Illinois.[30]

Most jurisdictions apply the second, more stringent test, which requires you to present facts, in the form of admissible evidence or sworn testimony, establishing that you can prove each element of your claim.[31]  This test requires you to provide more than just the pleadings, typically in the form of a statement of facts with supporting documents and testimony. Most states employing this test also require some further steps as well, such as proof that you attempted to notify the anonymous user of the pending proceeding[32]  or satisfaction of an additional balancing test to justify unmasking the troll.[33]  Federal Courts, and many state courts—including Arizona, Kentucky, Michigan, New York, Pennsylvania, Texas, California, Maryland, New Hampshire, and the District of Columbia—have adopted some version of this more stringent test.[34]

If it is not obvious from the nature of the statements that they are actionable, some courts may also require an evidentiary showing that you can prove a valid claim before they will order the troll’s identity disclosed.[35] 

Thus, if you file a lawsuit to identify the anonymous user, you must be prepared to present the facts that support your claim much earlier than in traditional litigation. Since most states apply the more stringent “evidentiary” test, the best practice is to prepare to satisfy that test, even if the less stringent test might be applied.

The factual evidence necessary to compel disclosure of an anonymous user’s identity will likely include, at a minimum: (1) copies of the offending posts; (2) sufficient evidence to demonstrate the posts are false, unlawful, or violate the terms of an agreement; (3) sufficient evidence to show that the comments are directed at you, if necessary; and (4) evidence demonstrating that you have suffered damage as a result of the comments. You should be careful to save copies of the offending posts before alerting the anonymous user that action is being taken, in order to guard against any attempt to edit, delete, or restrict access to the comments.

Step Three: Sue The Troll!

Once you have an order compelling disclosure of the anonymous user’s identity, you can serve that order on the service provider or website and expect a response. However, the response may not always identify the user, but may only give you the user’s IP address or other electronic information. You may need to issue additional subpoenas to service providers in order to identify the user of the IP address and ultimately discover the anonymous user’s identity.

Despite having an order in hand compelling disclosure of the anonymous user’s identity, you may still face obstacles from the service provider or website. Typically, large companies that host comments online resist disclosure of their users’ personal information for as long as possible. Thus, they may raise objections to disclosure, justified or not, ranging from invocation of the Stored Communications Act to the Video Privacy Protection Act. But, with the order in hand, you should be able to dispose of these objections through letter-writing, involving the court only if necessary.

Once you know the identity of the anonymous user, you can now amend the lawsuit to substitute the appropriate person for “John Doe.” With an actual defendant named, you can then begin the lawsuit in earnest to hold the no-longer-anonymous user liable for trolling online.

Conclusion

The prospect of trying to identify an anonymous online user can be daunting. But, armed with an understanding of the First Amendment and the applicable procedure, you can readily evaluate whether an anonymous user has engaged in unlawful conduct and whether you can successfully hunt down the troll to hold him or her liable. Good hunting!

References:

[1] Pew Research Center, December, 2016, “Online Shopping and E-Commerce.”

[2] YP Marketing Solutions, 2016, “The Why Before the Buy.”

[3] Id.

[4] Id.

[5] Reno v. ACLU, 521 U.S. 844, 897, 117 S. Ct. 2329, 2344 (1997).

[6] In re Anonymous Online Speakers, 661 F.3d 1168, 1173 (9th Cir. 2011) (citing Meyer v. Grant, 486 U.S. 414, 422, 425, 108 S. Ct. 1886, 100 L. Ed. 2d 425 (1988)).

[7] McIntyre v. Ohio Elec. Comm’n, 514 U.S. 334, 342, 115 S. Ct. 1511, 1516 (1995) (“[A]n author’s decision to remain anonymous, like other decisions concerning omissions or additions to the content of a publication, is an aspect of the freedom of speech protected by the First Amendment.”); Anonymous Online Speakers, 661 F.3d at 1173 (“Although the Internet is the latest platform for anonymous speech, online speech stands on the same footing as other speech—there is “no basis for qualifying the level of First Amendment scrutiny that should be applied” to online speech.”); Doe v. Reed, 561 U.S. 186, 218, n.4, 130 S. Ct. 2811, 2831 (2010) (recognizing that the freedom of speech “can be burdened by a law that exposes a speaker to harassment, changes the content of his speech, or prejudices others against his message”)

[8] Anonymous Online Speakers, 661 F.3d at 1173.

[9] Chaplinsky v. N.H., 315 U.S. 568, 571-72, 62 S. Ct. 766, 769 (1942).

[10] Mobilisa, Inc. v. Doe, 217 Ariz. 103, 106-7, ¶¶ 2-9, 170 P.3d 712, 715-16 (Ct. App. 2007).

[11] Anonymous Online Speakers, 661 F.3d at 1173.

[12] Glassdoor, Inc. v. Superior Court, 9 Cal. App. 5th 623, 626-27, 215 Cal. Rptr. 3d 395, 399-400 (Cal. App. 6th Dist. 2017).

[13] Salehoo Group, Ltd. v. ABC Co., 722 F. Supp. 2d 1210, 1212-13 (W.D. Wash. 2010)

[14] Yelp, Inc. v. Hadeed Carpet Cleaning, Inc., 62 Va. App. 678, 686-88, 752 S.E.2d 554, 557-58 (Va. Ct. App. 2014).

[15] https://www.facebook.com/terms.

[16] https://twitter.com/tos?lang=en.

[17] https://www.facebook.com/help/contact/191381691012854; https://support.twitter.com/articles/15789.

[18] https://www.google.com/intl/en-GB/policies/terms/.

[19] Seitz v. Rheem Mfg. Co., 544 F. Supp. 2d 901, 907 (D. Ariz. 2008) (“Although a corporation may maintain an action for libel, it has no personal reputation and may be libeled only by imputation about its financial soundness or business ethics.”).

[20] Desert Palm Surgical Group, P.L.C. v. Petta, 236 Ariz. 568, 579, ¶ 26, 343 P.3d 438, 449 (Ct. App. 2015).

[21] Read v. Phoenix Newspapers, 169 Ariz. 353, 355, 819 P.2d 939, 941 (1991) (“In a civil action for libel, the truth of the contents of the allegedly libelous statement is a complete defense.”)

[22] Yetman v. English, 168 Ariz. 71, 76, 811 P.2d 323, 328 (1991) (“The key inquiry is whether the challenged expression, however labeled by defendant, would reasonably appear to state or imply assertions of objective fact.”)

[23] Makaeff v. Trump Univ., LLC, 715 F.3d 254, 270 (9th Cir. 2013) (recognizing that a limited liability company can be an all-purpose public figure or a limited purpose public figure)

[24] Dube v. Likins, 216 Ariz. 406, 411, ¶ 8, 167 P.3d 93, 98 (Ct. App. June 28, 2007) (citing Miller v. Hehlen, 209 Ariz. 462, 471, ¶ 32, 104 P.3d 193, 202 (App. 2005)).

[25] W. Tech. v. Sverdrup & Parcel, Inc., 154 Ariz. 1, 4 (Ct. App. 1986)

[26] POM Wonderful LLC v. Coca-Cola Co., 134 S. Ct. 2228, 2234 (2014) (“The Lanham Act creates a cause of action for unfair competition through misleading advertising or labeling.”)

[27] 18 U.S.C. § 1836; A.R.S. § 44-401, et seq.

[28] Columbia Ins. Co. v. Seescandy.com, 185 F.R.D. 573, 578-80 (N.D. Cal. 1999); see also Anonymous Online Speakers, 661 F.3d at 1177 (recognizing that “[t]he lowest bar that courts have used is the motion to dismiss or good faith standard.”).

[29] Id. at 578-80.

[30] Anonymous Online Speakers, 661 F.3d at 1176-77; Salehoo, 722 F. Supp. 2d at 1216 (finding that “the prima facie standard is appropriate in order to guarantee that the plaintiff has brought viable claims in connection with his or her attempt to unmask the anonymous defendant.”); Lassa v. Rongstad, 294 Wis. 2d 187, 215 (Wis. 2006) (applying the motion to dismiss standard before compelling disclosure of anonymous identity); Hadley v. Doe, 2015 IL 118000, ¶ 27 (Ill. 2015).

[31] John Doe No. 1 v. Cahill, 884 A.2d 451, 460 (Del. 2005)

[32] Cahill, 884 A.2d at 460; Mobilisa, 217 Ariz. at 110, ¶ 22; Solers, Inc. v. Doe, 977 A.2d 941, 954 (D.C. 2009); Doe v. Coleman, 497 S.W.3d 740, 747 (Ky. 2016); Ghanam v. Does, 303 Mich. App. 522, 541-42 (2014); Ottinger v. Non-Party The Journal News, 2008 N.Y. Misc. LEXIS 4579, **4-7 (N.Y. Sup. Ct. 2008); Pilchesky v. Gatelli, 12 A.3d 430, 442 (Pa. Super. Ct. 2011); In re Does 1-10, 242 S.W.3d 805, 821-23 (Tex. App. Texarkana 2007); Krinsky v. Doe 6, 159 Cal. App. 4th 1154, 1167-73 (2008); Indep. Newspapers, Inc. v. Brodie, 966 A.2d 432, 457-58 (Md. 2009); Mortgage Specialists v. Implode-Explode Heavy Indus., 999 A.2d 184, 193, ¶ 13 (N.H. 2010).

[33] Mobilisa, 217 Ariz. at 112, ¶ 28; Coleman, 497 S.W.3d at 747; Ottinger, 2008 N.Y. Misc. LEXIS at **4-7; Brodie, 966 A.2d at 457-58;Mortgage Specialists, 999 A.2d at 193, ¶ 13.

[34] Mobilisa, 217 Ariz. at 112, ¶ 28; Solers, 977 A.2d at 954; Dendrite Intern., Inc. v. Doe No. 3, 342 N.J. Super. 134, 156-58 (2001); Ghanam, 303 Mich. App. at 541-42; Ottinger, 2008 N.Y. Misc. LEXIS at **4-7; Krinsky, 159 Cal. App. 4th at 1167-73; Brodie, 966 A.2d at 457-58;Mortgage Specialists, 999 A.2d at 193, ¶ 13.

[35] Glassdoor, 9 Cal. App. 5th at 636, 215 Cal. Rptr. 3d 395, 407.

This post was written by Kevin Heaphy of   2017 Ryley Carlock & Applewhite. A Professional Association

Effectiveness of Foreign Remedies to Obtaining Internet Information and Enjoining Illegal Conduct

The Internet has become the common form of commerce. As such, illegal activity has migrated there. The Internet is frequently used to engage in illegal activity cloaked in anonymity. Claimants have few if any direct means of enforcing their rights and court orders against the offenders. The power to make orders against Internet companies is essential to preserving the effectiveness of law online. Obtaining a remedy is often the practical solution to enforcing rights. Moreover, illegal online conduct crosses multiple jurisdictions often time simultaneously. As courts with personal jurisdiction have the power to adjudicate claims, it is essential that remedies have extraterritorial effect so to make it easier and less expensive for proceedings having to be brought in every country where the illegality occurs and the internet company operates.

For instance, Norwich Pharmacal orders are used to compel non-parties to disclose information or documents in their possession to assist in the discovery of wrongdoers. Norwich orders have increasingly been used in the online context by plaintiffs wo allege that they are being anonymously defamed or defrauded and seek orders against the Internet service providers to disclose the identity of the perpetrator. York University v. Bell Canada Enterprises  (2009), 311 D.L.R. (4th) 755 (Ont. S.C.J.); Cartier International AG v. British Sky Broadcasting LTD., (2017), 1 All E.R. 700 (C.A.). However, in Muwema v. Facebook Ireland LTD (2017) IEHC 69, the Irish High Court refused to grant a Norwich Pharmacal order against Facebook, requiring disclosure of the identity and location of an anonymous third party operating a Facebook page containing defamatory conduct. The court found that if Facebook disclosed such information it would endanger the life of the third party. But, Facebook was ordered to notify the third party that he should remove the offending postings within a certain period of time and if not, the plaintiff could renew its request for Norwich Pharmacal relief.

In addition, worldwide injunctions are available in English common law countries to cease conduct by a wrongdoer over which the court has jurisdiction. In Cartier,  Internet service providers were ordered to block the ability of their customers to access certain websites in order to avoid facilitating infringements of trademarks.  In Google Inc. v. Equustek Solutions Inc.  2017 SCC 34, the court ordered Google to block websites that were selling goods that violated the trade secrets of plaintiff. The court further held that this was a worldwide order and not confined to google.ca..

Although the law is evolving, claimants must use existing legal remedies to protect and enforce their rights. Courts are becoming much more receptive to helping the claimant.

This post was written byEric (Rick) S. Rein of Horwood Marcus & Berk Chartered.
Read more legal analysis at The National Law Review.

Federal Communications Commission Tackles the “Reassigned Number Problem”

Reassigned numbers have been at the center of the surge in litigation under the Telephone Consumer Protection Act (“TCPA”) during the last few years.  By now the story is well known to businesses that actively communicate with their customers: the customer consents to receive telemarketing and/or informational robocalls[1] at a wireless telephone number, but months or years later the customer changes his or her wireless telephone number and—unbeknownst to the business—the telephone number is reassigned to a different person.  When the recipient of the reassigned number starts receiving calls or messages from the business, a lawsuit often ensues under the TCPA because that party has not consented to receive such calls.  The FCC adopted on July 13 a Second Notice of Inquiry (“Second NOI”) that promises to address this problem in a meaningful way.  Specifically, the Second NOI focuses on the feasibility of “using numbering information to create a comprehensive resource that businesses can use to identify telephone numbers that have been reassigned from a consumer who has consented to receiving calls to a consumer who has not.”

Background on the Reassigned Number Problem

Under the current regime, the North American Numbering Plan (NANP) Administrator generally provides telephone numbers to voice service providers—including those who supply interconnected voice—in blocks of 1000.  The voice service providers recycle those numbers in and out of service, such that, after a number has been dropped, the number goes into a pool for a short period and then is brought out of the pool and reassigned to a different consumer.

The “reassigned number problem” occurs when a consumer consents to receive robocalls (telemarketing and/or informational), but then terminates service to the relevant wireless number without informing the businesses the consumer previously gave consent to make the robocalls.  Businesses that find themselves making robocalls to numbers that (unbeknownst to them) had been reassigned to a different consumer increasingly find themselves subject to lawsuits under the TCPA—this even though it has been widely acknowledged that (1) customers often switch telephone numbers without providing notice to businesses and (2) there is no public directory of reassigned wireless numbers that businesses can rely on to identify and scrub reassigned numbers.  When various industry groups and business entities asked the FCC to intervene, the FCC clarified that businesses making robocalls needed the consent of “the actual party who receives a call,” not of the intended recipient of the robocall.  FCC created a so-called “safe harbor” that afforded little protection in practice: a business could make a single call to a reassigned number without triggering liability under the TCPA, but the business would then be imputed with “constructive” knowledge that the number had been reassigned even if the single call did not yield actual confirmation that the number had been reassigned. The FCC did so even as it admitted that the tools available to identify reassigned numbers “will not in every case identify numbers that have been reassigned” and that the steps it was taking “may not solve the problem in its entirety” even “where the caller is taking ongoing steps reasonably designed to discover reassignments and to cease calls.”

The Second NOI

The Second NOI promises to more meaningfully address the reassigned number problem by suggesting the creation of a reliable, complete list of reassigned numbers that service providers would be required to update.  In pertinent part, the Second NOI addresses a number of other topics, including, but not limited to, possible reporting alternatives, compensation schemes, frequency of updates, and fees and eligibility requirements for accessing reassigned number data.  It also asks a number of logistical questions, including, but not limited to:

(1) What are the ways in which voice service providers could report the information in an accurate and timely way?

(2) Would the reporting—into a database or other platform—“substantially improve robocallers’ ability to identify reassigned numbers?”

(3) What information should voice service providers report?

(4) In what ways might the information reported raise concerns regarding the disclosure of private, proprietary, or commercially sensitive information?

(5) Should reassignment of toll-free numbers also be reported?

(6) What is the quantity of numbers reassigned and the benefits of reducing unwanted calls to these numbers?

(7) Should there be a safe harbor from TCPA violations for robocallers who use the new reassigned number resource?  What would be the advantages and disadvantages?

(8) How can the FCC incentivize robocallers to use the reassigned number resource?

In addition, the Second NOI seeks comment on whether the notification requirement should apply to all voice service providers or just providers of wireless services, and how to “balance the reporting burden placed on voice service providers against consumers’ privacy interests and robocallers’ interest in learning of reassignments.”   The item also seeks comment on which entity should be responsible for notification in circumstances when a voice service provider does not receive numbers directly from NANP, but instead obtains numbers “indirectly” from carrier partners.

The Commission claims it has the authority under Sections 227(b) and 251(e) of the Communications Act of 1934, as amended—which give the FCC control over the US portion of NANP and incorporate the TCPA—to require entities that obtain numbers from NANP to also report reassignments.  In fact, the Commission claims that doing so may further the statutory goals underlying the TCPA, which generally prohibits unwanted robocalls.

Although many details remain to be discussed and addressed by the FCC, the creation of the list that the FCC is proposing would address one of the main challenges faced by businesses that want to comply with the TCPA: how to gather reliable and complete information regarding which wireless telephone numbers have been reassigned.  The possibility of such a list working similar to that available to identify telephone numbers in the Do Not Call List is particularly promising, especially if it comes accompanied by safe harbor provisions similar to those attached to the Do Not Call List obligations in the FCC’s rules.

Comments are due August 28, 2017 and Reply Comments September 26, 2017.

[1] For purposes of this post “robocalls” refers to both calls made using an automatic telephone dialing system or using an artificial voice or pre-recorded message.

This post was contributed by Eduardo R. Guzmán  Paul C. Besozzi  and Koyulyn K. Miller of   Squire Patton Boggs (US) LLP
For more legal analysis check out the National Law Review.

FCC Slams Serial Robocaller With $120 Million Proposed Fine for “Spoofing” Numbers

We all get them.  Repeated marketing calls to our mobile and home phones with the incoming phone number altered to make it appear that it’s a local call, when in fact, the call is from a robo-scammer using IP technology to “spoof” the phone number.  As it turns out, there’s a federal law that makes such spoofing illegal, the Truth in Caller ID Act of 2009 (“TICIDA”), and in its first enforcement action under TICIDA, the FCC hit an alleged serial robocaller, Adrian Abramovich and his companies (together, Abramovich) with a whopping $120 million Notice of Apparent Liability for allegedly originating nearly 100 million such calls.

The Commission also issued a Citation and Order to Abramovich for alleged violations of the Telephone Consumer Protection Act (“TCPA”) for making unauthorized prerecorded telemarketing calls to emergency phone lines, wireless phones and residential phones without obtaining the required prior express written consent from the called party.  While TICIDA allows the Commission to directly fine first-time violators through its NAL authority, which it did here, in TCPA FCC enforcement actions involving entities and individuals that do not hold Commission authorizations, the Commission must first issue a citation, and then can only proceed with a fine if the recipient repeats the violation.  That still leaves Abramovich open to potentially monumental TCPA class action exposure.   The Citation and Order also notified Abromovich that he had violated the federal wire fraud statute by transmitting or causing to be transmitted, by means of wire, misleading or false statements with the intent to perpetrate a fraud.

According to the Commission, Abramovich ran a scheme where his spoofed calls appeared to originate from local numbers and offered, via a pre-recorded message, holiday vacations and cruises claiming to be associated with well-known American travel and hospitality companies.  The pre-recorded messages would prompt customers to “press 1” to secure their reservation.  Once a customer pressed “1”, the customer was transferred to a call center where live operators pushed vacation packages typically involving timeshare presentations, that were not affiliated with the well-known brands used in the recorded messages.  The Commission characterized Abramovich’s schemes as “one of the largest – and most dangerous – illegal robocalling campaigns the Commission has ever investigated.”  According to the Commission, in addition to defrauding consumers, the robocalling campaign also caused disruptions to an emergency medical paging service, which provides paging services for emergency room doctors, nurses, emergency medical technicians, and other first responders.

While significant in absolute terms, the $120 million proposed fine, according to the Commission, was significantly below the penalty that could have been proposed in the NAL.  Rather than fine the statutory maximum of $11,052 for each spoofing violation, or three times that amount for each day of a continuing violation, the Commission calculated the base forfeiture amount at $1,000 per unlawful spoofed call, since this was the first time the Commission used its TICIDA forfeiture authority.

Mr. Abromovitz now has an opportunity to respond to both the NAL and Citation.  Stopping illegal robocalling has been a key priority for Chairman Pai, and no doubt the Commission is expecting that the threat of huge monetary forfeiture penalties against the industry will provide a powerful incentive for roboscammers to look for other ways to make a buck.  Given the Commission’s struggle with fashioning tools to go after serial robocallers that do not have the effect of increasing TCPA exposure for established companies engaging in legitimate customer communications, we do not expect the Commission to back down from its proposed penalty, and expect this to be the start of a new enforcement initiative using TICIDA and its direct penalty provisions.

This post was written byRebecca E. Jacobs,  Martin L. Stern and  Douglas G. Bonner of Womble Carlyle Sandridge & Rice, PLLC.

States Deserve A Complete Picture In Evaluating FirstNet/AT&T Coverage Plans

FirstNet recently selected AT&T as its partner to build, operate and maintain the Nationwide Public Safety Broadband Network (“NPSBN”).  With AT&T leading the charge, network development appears to be on a fast track. In early June, the initial AT&T/FirstNet Radio Access Network (“RAN”) or coverage plans were made available electronically to all 50 states, the District of Columbia and territories of the United States (referred to as the “states” for purposes of this article). After a brief period for review, comment and consultations, the plans will be finalized and the Governor of each state must decide whether to accept the FirstNet plan or to seek an alternative coverage model through the state’s own Request For Proposal (“RFP”) process.

In evaluating its options, the goal of every state should be to obtain the best possible network coverage for its First Responders. The safety of First Responders and the public must be the primary concern in evaluating the AT&T/FirstNet plan. In order to conduct a reasonably thorough examination, the Governors and their teams must have access to the necessary financial, technical and legal information regarding AT&T’s commitments to deliver the NPSBN.

However, the states currently face a major obstacle in conducting their analysis. They do not have access to the underlying contract between AT&T and FirstNet. There have been numerous trade press reports and FirstNet/AT&T presentations about what the AT&T proposed roll-out will entail (e.g. access to the entire AT&T network, public safety usage targets, priority and preemption). However, no one from a state government is privy to the specific terms of the FirstNet/AT&T agreement. As with most agreements the “devil is in the details,” but the states cannot access the details.

There are countless issues involved in the review of state plans that turn on the conditions of the underlying FirstNet/AT&T contract. For example, how much of the statutory requirement for rural coverage can be satisfied through “deployables” as opposed to permanent hardened infrastructure under the terms of the contract? What is the specific long-term commitment to support discounted pricing for public safety use? Is there a mechanism in place to resolve any disputes that may arise between FirstNet and AT&T.

A fundamental question is whether there is an option for AT&T to “opt-out” of the contract with FirstNet if it fails to obtain a certain number of states “opting-in” or for any other reason. Another basic issue pertains to the penalties that AT&T may have to pay if it fails to meet certain levels of public safety use or “adoption” on the network. Without firsthand knowledge of the AT&T/FirstNet agreement, there is no way of knowing with certainty if there are caveats or conditions that could limit such a requirement?  What happens to the spectrum if there is zero public safety adoption in a given area or insufficient adoption on a nationwide basis? These are significant questions to which states are entitled to an answer.

For AT&T and FirstNet to simply address these and other critical questions an on ad hoc basis is not a prudent approach. The only way a full evaluation of whether the needs and objectives of public safety are being met is for FirstNet and AT&T to disclose the underlying contract to the states so that they can examine the specific terms of the agreement.

As things now stand, a Governor is being asked to accept a vendor to build and operate the public safety network within his or her state – impacting the lives of First Responders and the public – without firsthand knowledge of the terms under which AT&T will provide the service. FirstNet and AT&T should disclose the terms of their contract pursuant to an appropriately drafted non-disclosure agreement so the Governors and their teams will have a complete picture in reviewing the FirstNet/AT&T coverage plans.

This post was written by Albert J. Catalano of  Keller and Heckman LLP.

Practicing Telemedicine Across State Borders: New Expedited Licenses Permit Physicians to Expand Practice

In a watershed moment for the expansion of telemedicine, the Interstate Medical Licensure Compact Commission is now processing applications to allow physicians to practice telemedicine across state lines with greater ease. Nineteen states have passed legislation to adopt the Interstate Medical Licensure Compact, which allows physicians to obtain a license to practice medicine in any Compact state through a simplified application process.  Under the new system, participating state medical boards retain their licensing and disciplinary authority, but agree to share information essential to licensing, creating a streamlined process.

The Federation of State Medical Boards’ President and CEO, Humayun Chaudhry, DO, MACP, called the Compact a “milestone” for medical regulation in the United States.  “The launch of the Compact will empower interested and eligible physicians to deliver high-quality care across state lines to reach more patients in rural and underserved communities. This is a major win for patient safety and an achievement that will lessen the burden being felt nationwide as a result of our country’s physician shortage.”

States currently participating in the Compact are Idaho, Montana, Wyoming, Nevada, Arizona, Utah, Colorado, South Dakota, Kansas, Minnesota, Iowa, Wisconsin, Illinois, Mississippi, Alabama, West Virginia, Pennsylvania, New Hampshire, and Nebraska.  Seven additional states have proposed legislation to adopt the Compact, including Washington, D.C.

Most states require a physician to obtain a license to practice medicine in each state where the patient is located at the time of the physician-patient encounter.  Prior to adoption of the Compact, obtaining licensure in a given state was an oppressive task, requiring the physician to complete lengthy applications, submit required documentation, pay fees, and pass examinations.  This proved to be a burdensome restriction for physicians practicing telemedicine, where patients may be located in any state at the time of the physician-patient encounter.  Licensing requirements were identified as a significant barrier to the expansion of telemedicine, prompting introduction of the Compact.

Physicians are eligible to apply for the Compact license if they possess a full and unrestricted license to practice medicine in a Compact state and have not been disciplined by any state medical board, among other requirements.  To apply, the physician must designate a Compact state as the “state of principal licensure” and select the other Compact states in which they would like to become licensed.  The state of principal licensure will verify the physician’s eligibility and provide credential information to the Interstate Commission.  The Interstate Commission then collects applicable fees and transmits the physician’s information to the additional states, where the licenses will then be granted.

Participation in the Compact creates another pathway for licensure, but does not otherwise change a state’s existing Medical Practice Act.  Physicians located in a state that has not adopted the Compact may still obtain licensure in other states through the ordinary licensure process.

This post was written by Marki Stewart at Dickinson Wright PLLC.

Broadband Internet Service Providers In Regulatory Limbo After Repeal of FCC Privacy and Data Security Rules

data security privacy FCC cybersecurityPotentially signaling the end of the short-lived stint by the Federal Communication Commission (“FCC”) to regulate consumer data privacy on the internet, the Trump Administration recently repealed Obama-era data privacy and security rules for broadband providers.  The action, passed by Congress and signed by President Trump pursuant to the Congressional Review Act, completely rescinds the rules that would have gone into effect later this year.  While the move has been welcomed by industry insiders, it leaves broadband providers in regulatory limbo as the Trump Administration seeks to determine which agency and what rules will oversee data protection in this sector going forward.

The FCC’s Privacy Order and Its Repeal

In November 2016, the FCC released comprehensive consumer privacy and data security rules (the “2016 Privacy Order”) for broadband internet access service (“BIAS”) providers.1  BIAS providers offer consumers high-speed, continuous access to the internet, typically through cable, telephone, wireless, or fiber-optic connections.  They are different from entities such as Amazon and Facebook, which do not provide connections to the internet but rather offer internet services such as cloud storage, messaging, news, video streaming, and online shopping and are regulated, with respect to data privacy matters, by the Federal Trade Commission (“FTC”).

The 2016 Privacy Order would have, among other things, required BIAS providers to obtain affirmative customer consent (“opt-in” consent) prior to using and sharing, for commercial purposes, confidential customer data, such as a user’s web browsing history, application usage history, or geo-location information, and prohibited them from refusing to serve customers who did not provide such consent.  It also required BIAS providers to adopt “reasonable measures” to protect customer data from unauthorized disclosure, and required them to give notice to customers affected by any data breach “without unreasonable delay” but not later than 30 days after determining that a breach had occurred.

Repeal of the 2016 Privacy Order comes as a welcome development for industry groups, which vigorously opposed them both prior to and subsequent to their finalization.  In January 2017, the FCC received multiple petitions to reconsider and stay the order.2  The BIAS industry complained that some of the new rules – particularly the opt-in rule for the use of sensitive customer information – put BIAS providers at a competitive disadvantage because the rules were more restrictive than FTC rules that applied to other internet entities such as Amazon and Facebook and, further, would have required costly updates to BIAS providers’ systems.  In response, the FCC – now with a Chairman appointed by President Trump and a majority of Republican-appointed commissioners – reversed course and, on March 1, 2017, voted to stay some of the provisions of the 2016 Privacy Order that had been due to come into effect.3  Shortly thereafter, Congress and President Trump used their authority under the Congressional Review Act to completely rescind the 2016 Privacy Order.4

Is Net Neutrality Next?

To answer the question of where the Trump Administration might go from here first requires an explanation of how the FCC came to be responsible for regulating data privacy and security for BIAS providers in the first place.

Until 2015, BIAS providers, like other internet service and content providers, were not considered to be “common carriers” by the FCC and, thus, were not subject to data privacy regulation by the FCC.  Instead, for matters concerning data privacy and protection, BIAS providers looked to the FTC.  That changed in 2015, when the FCC issued the “Open Internet Order,”5 which reclassified BIAS providers as “telecommunications services” and, therefore, subjected them to common carrier regulation by the FCC under Title II of the Communications Act of 1934 (“Title II”).  Among other things, Title II requires “telecommunications services” to furnish services to customers “upon reasonable request” and prohibits “unjust and unreasonable discrimination” in the services that common carriers provide.  Title II further provides that “telecommunications services” have a duty to protect the privacy of customer data.6

This reclassification was necessary for the FCC to promote and establish, as the centerpiece of the Open Internet Order, “net neutrality” rules for BIAS Providers.  “Net neutrality” rules require BIAS providers to allow users equal access to all otherwise lawful internet websites, content, and services, without favoring or restricting access, whether the websites are owned or controlled by the service providers’ affiliates, business partners, or competitors.  For example, absent net neutrality rules, a BIAS provider might, in exchange for a fee or other consideration, agree with a video sharing website, such as YouTube, to provide its customers with faster and better access to YouTube than to a rival video sharing website, such as Vimeo.

Previous attempts by the FCC to impose net neutrality rules on BIAS providers had been rejected by the Court of Appeals for the D.C. Circuit.  Most recently, in 2014, the D.C. Circuit held that the FCC did not have the authority to impose net neutrality rules on BIAS providers because they were not subject to the common carrier rules under Title II.7  In response, the FCC reclassified BIAS providers as common carriers in its Open Internet Order.  The 2016 Privacy Order was an attempt by the FCC to further define the data privacy and protection rules that applied to BIAS providers under Title II.

The Trump Administration now seeks to return the BIAS industry to privacy oversight by the FTC, as both the current FCC and FTC Chairpersons have indicated that “jurisdiction over broadband providers’ privacy and data security practices should be returned to the FTC, the nation’s expert agency with respect to these important subjects.”8  However, this is easier said than done, as it would require that the FCC revoke the Open Internet Order and its accompanying net neutrality rules.  Such a move would be favored by the BIAS industry and the new Chairman of the FCC, Ajit Pai, who regards the net neutrality rules as a “mistake,”9 but would be met by criticism from many major internet content providers and services, such as Amazon, Google, and Facebook.10

In the meantime, the FTC is without authority to regulate BIAS providers regarding data privacy, as the FTC Act contains an express exemption of FTC jurisdiction for common carriers.11  Further complicating matters is an August 2016 decision of the Court of Appeals for the Ninth Circuit, which interpreted the FTC’s common carrier exemption as including all activities of any entity designated as a common carrier, even those activities that are unrelated to the entity’s common carrier business and which otherwise might be subject to FTC jurisdiction if they were carried out by a separate entity.12  If the Ninth Circuit position were to stand and be adopted by other Circuits – the FTC is currently seeking a rehearing en banc – the FCC suddenly might find itself responsible for regulating a host of non-common carrier related business activities merely because they are provided by entities that have been designated as common carriers under Title II.

Many large BIAS providers have faced this uncertainty by pledging to take “reasonable measures to protect customer information” and notify “consumers of data breaches as appropriate” in accordance with the existing FTC data privacy framework (i.e., ensuring that their data security practices are not “unfair or deceptive” in contravention of Section 5 of the FTC Act).[13]

BIAS providers are also presently subject to a host of state laws concerning data privacy and protection, including at least 48 state data breach notification laws, the most recent of which was enacted in New Mexico.14  These laws typically require businesses to notify the state authorities, affected customers, and major credit reporting agencies when the state’s residents’ confidential personal information, such as social security or driver’s license numbers, credit card numbers, and passwords, have been exposed through a data breach.  In addition, some states, such as Massachusetts15 and California,16 also require businesses to implement and maintain reasonable security procedures and practices to protect customer information.  Finally, some states maintain consumer protection laws, which, similar to the FTC Act, generally protect against unfair or deceptive trade practices and have been used by state attorney generals to penalize companies that fail to protect customer data.17

Conclusion

The Trump Administration’s repeal of the 2016 Privacy Order has provided a respite for the BIAS industry from vigorous new requirements that would have gone into effect this year.  However, it also has created a period of regulatory uncertainty as regulators determine the way forward, including the fate of the Open Internet Order.  In the meantime, BIAS providers should, as they have promised, continue to follow reasonable data privacy and protection practices, consistent at least with those required by the FTC, and also carefully consider whether any other applicable federal or state data privacy laws apply to their business.

ARTICLE BY Peter Carey, Joseph Facciponti, Keith M. Gerver & Joseph V. Moreno of Cadwalader, Wickersham & Taft LLP

© Copyright 2017 Cadwalader, Wickersham & Taft LLP

1 Protecting the Privacy of Customers of Broadband and Other Telecommunications Services, Report and Order, 31 FCC Rcd 13911 (2016), available at https://apps.fcc.gov/edocs_public/attachmatch/FCC-16-148A1.pdf.

2 See, e.g., Joint Petition for Stay, available athttps://ecfsapi.fcc.gov/file/101270254521574/012717%20Petition%20for%20Stay.pdf(“Stay Petition”).

3 See Order Granting Stay Petition, available at https://apps.fcc.gov/edocs_public/attachmatch/FCC-17-19A1.pdf.

4 See S.J. Res. 34 – 115th Congress, available at https://www.congress.gov/bill/115th-congress/senate-joint-resolution/34/text.

5 See Protecting and Promoting the Open Internet, Report and Order on Remand, Declaratory Ruling, and Order, 30 FCC Rcd 5601 (2015), available athttps://apps.fcc.gov/edocs_public/attachmatch/FCC-15-24A1.pdf.

6 See 47 U.S.C. § 222(a) (“Every telecommunications carrier has a duty to protect the confidentiality of proprietary information of, and relating to . . . customers.”).

7 See Verizon v. F.C.C., 740 F.3d 623 (D.C. Cir. 2014).

8 See Joint Statement of Acting FTC Chairman Maureen K. Ohlhausen and FCC Chairman Ajit Pai on Protecting Americans’ Online Privacy, available at https://www.ftc.gov/news-events/press-releases/2017/03/joint-statement-acting-ftc-chairman-maureen-k-ohlhausen-fcc.

9 See Remarks of Federal Communications Commission Chairman Ajit Pai at the Mobile World Congress (February 28, 2017), available at https://apps.fcc.gov/edocs_public/attachmatch/DOC-343646A1.pdf.

10 See Google, Facebook and Amazon write to FCC demanding true net neutrality, The Guardian (May 7, 2014), available athttps://www.theguardian.com/technology/2014/may/08/google-facebook-and-amazon-sign-letter-criticising-fcc-net-neutrality-plan.

11 See 15 U.S.C. § 45(a)(2).

12 See F.T.C. v. AT&T Mobility LLC, 835 F.3d 993 (9th Cir. 2016).  The FTC has sought rehearing en banc.

13 See Stay Petition, ISP Privacy Principles.

14 See New Mexico H.B. 15, Data Breach Notification Act (2017).

15 See Mass Gen. Laws Ann. ch. 93H, § 2.

16 See Cal. Civ. Code § 1798.81.5(b).

17 See, e.g., Press Release, A.G. Schneiderman Announces $100K Settlement with E-Retailer after Data Breach Exposes Over 25K Credit Card Numbers, N.Y. State Attorney General’s Office (Aug. 5, 2016), available at https://ag.ny.gov/press-release/ag-schneiderman-announces-100k-settlement-e-retailer-after-data-breach-exposes-over. 

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