Category: Privacy Law

Are You Ready for 2023? New Privacy Laws To Take Effect Next Year

Five new state omnibus privacy laws have been passed and will go into effect in 2023. Organizations should review their privacy practices and prepare for compliance with these new privacy laws.

What’s Happening?

While the US currently does not have a federal omnibus privacy law, states are beginning to pass privacy laws to address the processing of personal data. While California is the first state with an omnibus privacy law, it has now updated its law, and four additional states have joined in passing privacy legislation: Colorado, Connecticut, Utah, and Virginia. Read below to find out if the respective new laws will apply to your organization.

Which Organizations Must Comply?

The respective privacy laws will apply to organizations that meet particular thresholds. Notably, while most of the laws apply to for-profit businesses, we note that the Colorado Privacy Act also applies to non-profits. There are additional scope and exemptions to consider, but we provide a list of the applicable thresholds below.

The California Privacy Rights Act (CPRA) – Effective January 1, 2023

The CPRA applies to for-profit businesses that do business in California and meet any of the following:

  1. Have a gross annual revenue of over $25 million;
  2. Buy, receive, or sell the personal data of 100,000 or more California residents or households; or
  3. Derive 50% or more of their annual revenue from selling or sharing California residents’ personal data.

Virginia Consumer Data Protection Act (CDPA) – Effective January 1, 2023

The CDPA applies to businesses in Virginia, or businesses that produce products or services that are targeted to residents of Virginia, and that:

  1. During a calendar year, control or process the personal data of at least 100,000 Virginia residents, or
  2. Control or process personal data of at least 25,000 Virginia residents and derive over 50% of gross revenue from the sale of personal data.

Colorado Privacy Act (CPA) – Effective July 1, 2023

The CPA applies to organizations that conduct business in Colorado or produce or deliver commercial products or services targeted to residents of Colorado and satisfy one of the following thresholds:

  1. Control or process the personal data of 100,000 Colorado residents or more during a calendar year, or
  2. Derive revenue or receive a discount on the price of goods or services from the sale of personal data, and process or control the personal data of 25,000 Colorado residents or more.

Connecticut Act Concerning Personal Data Privacy and Online Monitoring (CTPDA) – Effective July 1, 2023

The CTPDA applies to any business that conducts business in the state, or produces a product or service targeted to residents of the state, and meets one of the following thresholds:

  1. During a calendar year, controls or processes personal data of 100,000 or more Connecticut residents, or
  2. Derives over 25% of gross revenue from the sale of personal data and controls or processes personal data of 25,000 or more Connecticut residents.

Utah Consumer Privacy Act (UCPA) – Effective December 31, 2023

The UCPA applies to any business that conducts business in the state, or produces a product or service targeted to residents of the state, has annual revenue of $25,000,000 or more, and meets one of the following thresholds:

  1. During a calendar year, controls or processes personal data of 100,000 or more Utah residents, or
  2. Derives over 50% of the gross revenue from the sale of personal data and controls or processes personal data of 25,000 or more Utah residents.

The Takeaway 

Organizations that fall under the scope of these respective new privacy laws should review and prepare their privacy programs. The list of updates may involve:

  • Making updates to privacy policies,
  • Implementing data subject request procedures,
  • How your business is handling AdTech, marketing, and cookies,
  • Reviewing and updating data processing agreements,
  • Reviewing data security standards, and
  • Providing training for employees.

Article By Eva J. Pulliam, Christine Chong, and Destiny Planter of ArentFox Schiff LLP

For more privacy and cybersecurity legal news, click here to visit the National Law Review. 

© 2022 ArentFox Schiff LLP

What Employers Need to Know in a Post-Dobbs Landscape

On June 24, 2022, in Dobbs v. Jackson Women’s Health Organization, the United States Supreme Court overturned both Roe v. Wade and Planned Parenthood v. Casey and held the access to abortion is not a right protected by the United States Constitution. This article analyzes several employment law issues employers may face following the Dobbs decision.

Federal Law

The Pregnancy Discrimination Act (PDA) prohibits employment discrimination “on the basis of pregnancy, childbirth, or related medical conditions.” In construing the PDA’s reference to “childbirth”, federal courts around the country have held the PDA prevents employers from taking adverse employment actions (including firing, demotion, or preventing the opportunity for advancement) because of an employee’s decision to have an abortion as well as an employee’s contemplation of an abortion. The PDA also prohibits adverse employment actions based upon an employee’s decision not to have an abortion. So, for example, an employer would violate the PDA if it pressured an employee to have, or not to have, an abortion in order to keep her job or be considered for a promotion.

State Law

Several states have implemented “trigger laws,” which impose restrictions or categorical bans on abortion following Dobbs. In addition, states such as Texas have enacted laws that allow individuals to file civil actions against entities that “knowingly engage in conduct that aids or abets the performance or inducement of an abortion, including paying for or reimbursing the cost of an abortion through insurance or otherwise.” Relying on that law, Texas legislators have already threatened at least two high profile employers for implementing policies which reimburse travel costs for abortion care unavailable in an employee’s home state. Although the Texas statute is currently being challenged in court, its text provides for statutory damages “in an amount of not less than $10,000” for “each abortion . . . induced.”

Although the issue has not been litigated yet, courts will likely have to decide how the PDA’s protections interact with a state’s anti-abortion laws.

Employer Handbook Policies and Procedures

The Dobbs decision may also impact workplace morale and productivity. Accordingly, employers should consider reviewing their handbooks as well as policies and procedures, with human resources and managers to ensure requisite familiarity with the employer’s social media policy, dress code, code of conduct, and how the employer handles confidential health information. Employers should be prepared for increased public expression from the workforce—including social media posts, discussions with other employees and third parties, and wearing clothing or other accessories reflecting strong opinions. Human resources should also be prepared for an increase in leave requests and employee resignations.

Travel Benefits for Employees Seeking Reproductive Care

In the wake of Dobbs, many businesses in states where access to abortion will be prohibited or highly restricted are considering—or have already implemented—benefit or employee expense plan amendments that would cover travel and lodging for out-of-state abortions. Ultimately, the legal and regulatory future for such plans remains unclear; especially in states where abortion laws are the most restrictive and contain “aiding and abetting” liability.

At a high level, employers seeking to enact such benefit or expense plans may find some comfort in a statement contained in Justice Kavanaugh’s concurrence in Dobbs. Specifically, Justice Kavanaugh wrote:

  • Some of the other abortion related legal questions raised by today’s decision are not especially difficult as a constitutional matter. For example, may a State bar a resident of that State from traveling to another State to obtain an abortion? In my view, the answer is no based on the constitutional right to interstate travel.

Thus, it appears that outright travel bans or similar prohibitive restrictions would face significant legal challenges, and could be declared void.

At this early stage in the post-Roe era, there appear to be several ‘paths’ emerging for employers seeking to provide travel benefits. Each comes with its own set of potential issues and considerations that employers, in conjunction with their counsel and benefit providers, should evaluate carefully. Below is a brief discussion of some of the travel-reimbursement plans employers have begun to implement or consider in the wake of Dobbs:

  1. Travel and lodging benefits under existing group health plans.
    • Assuming the plans are self-funded and subject to ERISA, they must also comply with other applicable rules such as HIPAA and the ACA.
    • Such benefits may not be available under non-ERISA plans in states restricting abortion access.
    • Generally would be limited to individuals enrolled in the employer’s plan.
  2. Travel and lodging benefits under Health Reimbursement Arrangements (HRA’s).
    • An HRA is a type of health savings account offering tax-free reimbursement up to a fixed amount each year.
    • HRA’s are generally subject to ERISA and cannot reimburse above the very minimal IRS limits (Section 213), such as mileage (.18 cents) and lodging ($50/per day).
    • Should be integrated with other coverage or qualify as an “Excepted Benefit HRA” or else it may violate certain ACA rules that prohibit lifetime annual dollar limits for certain benefits.
  3. Employee Assistance Programs (EAP’s).
    • EAP’s are voluntary benefit programs some employers use to allow employees access to certain types of care without accruing co-pays, deductibles, or out of pocket costs. Historically, EAP’s have been predominately used for mental health benefits such as therapy or substance abuse counseling.
    • In certain circumstances, EAP’s are exempt from the ACA. To be an “excepted benefit,” the EAP:
      • Cannot provide significant benefits in the nature of medical care or treatment;
      • Cannot be coordinated with benefits under another group health plan;
      • Cannot charge a premium for participation; and
      • Cannot require cost sharing for offered services.
    • The first of the above requirements (significant benefits of a medical nature) is highly subjective and may create risk for employers because it is difficult to determine whether a benefit is “significant.” Accordingly, it may be difficult to locate a third-party vendor or provider that would administer travel and lodging benefits through an EAP.
  4. Travel and lodging benefits to employees as taxable reimbursements.
    • Taxable reimbursements—up to a certain amount annually—for travel to obtain abortion or other medical care not available in the employee’s place of residence.
    • Some employers are requiring only receipts for lodging, but are not requesting substantiation of the employee’s abortion procedure. Some argue this might insulate an employer from liability in states with statutes prohibiting “aiding or abetting” an abortion, on the grounds that the employer does not know what the employee is using the benefit for. Ultimately, whether that is true remains largely untested and unclear.
    • Likely more costly for the employer, because the benefit is broader in scope. In addition, employers may run the risk that a payroll reimbursement of this kind could qualify as setting up a “new medical plan,” thereby raising compliance and other related issues.

Additionally, employer travel-and-lodging benefits of this type present innumerable other questions and issues. Such questions should include:

  1. Is the employer’s benefit plan subject to ERISA?
    • ERISA is the federal law applicable to qualifying employee benefits plans, including employer-sponsored group health plans. Plans subject to ERISA must also comply with HIPAA, the ACA, and other applicable rules and regulations. So-called self-funded employer plans are subject to ERISA.
    • With some exceptions, ERISA preempts or blocks the implementation of state laws that ”relate to” the ERISA plan.
    • However, ERISA does not:
      • Preempt a state law that regulates insurance companies operating in the state; or
      • Preempt state criminal laws of general applicability.
    • If a plan is self-insured and subject to ERISA it may not be required to comply with state laws related to abortion services based on ERISA preemption.
    • However, the impact of new and untested civil and/or criminal penalties remains unclear.
  2. What procedures does the plan cover?
    • In this environment—especially in states with the most restrictive abortion laws—employers should have a firm understanding of what specific type of abortion procedures the plan covers.
  3. Specific or “general” travel stipends?
    • As noted above, some companies are choosing to provide travel/lodging stipends and benefits to access abortion care in jurisdictions where the procedure is lawful.
    • Some employers are making this travel stipend more general—i.e., not requiring the stipend be used for abortion, or otherwise naming abortion in the benefit program. As an example, a policy that provides a stiped for an employee to “travel to receive medical care that is unavailable within 100 miles of the employee’s place of residence.”
    • Note that out-of-plan reimbursements to employees are likely taxable as wages. Some employees may choose to gross up such stipends to compensate.
  4. What about privacy concerns?
    • Employers should think carefully about how to provide any benefits or stipends while protecting employee privacy, not violating HIPAA, and—where applicable—not running afoul of so-called ‘aiding and abetting’ legislation.
    • To that end, as noted above, some companies are requiring only that employees provide travel receipts—not documentation of the underlying procedure—to qualify for the benefit, reimbursement, or stipend.
    • Of course, without any verification, there is always the potential for abuse—or otherwise using the program for something well beyond its core intent, such as travel, elective plastic surgery, etc. However, some employers may evaluate the risk of abuse as worth the potential lessening of privacy and other concerns.

Protected Activity

Employers must also be aware that certain speech in the workplace—including speech about abortion—may be legally protected. Although the First Amendment generally does not extend to private companies, the National Labor Relations Act (NLRA) prohibits retaliation against employees who discuss the terms and conditions of employment, commonly referred to as “protected concerted activity.” Thus, employees (1) discussing or advocating for an employer to provide benefits to women seeking reproductive and abortion-related healthcare services, (2) advocating for the employer to take a certain public stance on the issue, or (3) protesting the employer’s public position on the issue, may constitute protected activity under the NLRA.

Contacts and Next Steps

Employment law issues will continue to arise and evolve in the coming months following the Dobbs decision. The EEOC, DOL, and HHS may provide further guidance on how Dobbs impacts employment laws such as the Family and Medical Leave Act (FMLA), Americans with Disabilities Act (ADA), and PDA. Employers should consult with legal counsel concerning these developments.

Article By Denise E. Giraudo, Stephen E. Fox, Jonathan E. Clark, and Dan Syed of Sheppard, Mullin, Richter & Hampton LLP

For more labor and employment legal news, click here to visit the National Law Review.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.

Federal Bill Would Broaden FTC’s Role in Cybersecurity and Data Breach Disclosures

Last week, the House Energy and Commerce Committee advanced H.R. 4551, the “Reporting Attacks from Nations Selected for Oversight and Monitoring Web Attacks and Ransomware from Enemies Act” (“RANSOMWARE Act”).  H.R. 4551 was introduced by Consumer Protection and Commerce Ranking Member Gus Bilirakis (R-FL).

If it becomes law, H.R. 4551 would amend Section 14 of the U.S. SAFE WEB Act of 2006 to require not later than one year after its enactment, and every two years thereafter, the Federal Trade Commission (“FTC”) to transmit to the Committee on Energy and Commerce of the House of Representatives and the Committee on Commerce, Science, and Transportation of the Senate a report (the “FTC Report”).  The FTC Report would be focused on cross-border complaints received that involve ransomware or other cyber-related attacks committed by (i) Russia, China, North Korea, or Iran; or (ii) individuals or companies that are located in or have ties (direct or indirect) to those countries (collectively, the “Specified Entities”).

Among other matters, the FTC Report would include:

  • The number and details of cross-border complaints received by the FTC (including which such complaints were acted upon and which such complaints were not acted upon) that involve ransomware or other cyber-related attacks that were committed by the Specified Entities;
  • A description of trends in the number of cross-border complaints received by the FTC that relate to incidents that were committed by the Specified Entities;
  • Identification and details of foreign agencies, including foreign law enforcement agencies, located in Russia, China, North Korea, or Iran with which the FTC has cooperated and the results of such cooperation, including any foreign agency enforcement action or lack thereof;
  • A description of FTC litigation, in relation to cross-border complaints, brought in foreign courts and the results of such litigation;
  • Any recommendations for legislation that may advance the security of the United States and United States companies against ransomware and other cyber-related attacks; and
  • Any recommendations for United States citizens and United States businesses to implement best practices on mitigating ransomware and other cyber-related attacks

Cybersecurity is an area of recent federal government focus, with other measures recently taken by President Biden, the Securities and Exchange Commission, the Food and Drug Administration, and other stakeholders.

Additionally, H.R. 4551 is also consistent with the FTC’s focus on data privacy and cybersecurity.  The FTC has increasingly taken enforcement action against entities that failed to timely notify consumers and other relevant parties after data breaches and warned that it would continue to apply heightened scrutiny to unfair data security practices.

In May 2022, in a blog post titled “Security Beyond Prevention: The Importance of Effective Breach Disclosures,” the FTC’s Division of Privacy and Identity Protection had cautioned that “[t]he FTC has long stressed the importance of good incident response and breach disclosure as part of a reasonable information security program, and that, “[i]n some instances, the FTC Act creates a de facto breach disclosure requirement because the failure to disclose will, for example, increase the likelihood that affected parties will suffer harm.”

As readers of CPW know, state breach notification laws and sector-specific federal breach notification laws may require disclosure of some breaches.  However, as of May 2022 it is now expressly the position of the FTC that “[r]egardless of whether a breach notification law applies, a breached entity that fails to disclose information to help parties mitigate reasonably foreseeable harm may violate Section 5 of the FTC Act.”  This is a significant development, as notwithstanding the absence of a uniform federal data breach statute, the FTC is anticipated to continue exercise its enforcement discretion under Section 5 concerning unfair and deceptive practices in the cybersecurity context.

Article By Kristin L. Bryan and Jeffrey L. Turner of Squire Patton Boggs (US) LLP

For more privacy and cybersecurity legal news, click here to visit the National Law Review.

© Copyright 2022 Squire Patton Boggs (US) LLP

New Survey Shows that Americans are Ready for More Deliveries by Drone

Auterion, a drone software company, commissioned a survey from the market research company, Propeller Insights, of 1,022 adults. The survey was gender-balanced and distributed across age groups from 18 to 65+, living in rural, suburban, and city environments in the United States, and was conducted in May 2022.

In the report summarizing the survey, “Consumer Attitudes on Drone Delivery,” Auterion reveals that 58 percent of Americans like the idea of drone deliveries, and 64 percent think drones are becoming an option for home delivery now or will be in the near future. With more than 80 percent of those surveyed reporting that they have packages delivered to their homes on a regular basis, the survey finds that Americans are generally ready to integrate drone delivery into daily life for ease and speed. Of the 64 percent who see drones becoming a more common option for home delivery, 32 percent think it’s possible now or within the next 1 to 2 years.

Only 36 percent of those surveyed had doubts about this type of drone integration, including some individuals who think the general public or governments will not approve of large-scale drone adoption for delivery and others who just prefer that drone delivery doesn’t happen at all.

With individuals choosing more than one option, the survey found that the most common types of home package deliveries reported by consumers today, by vehicles and trucks, are:

  • 39 percent – groceries

  • 34 percent – clothing

  • 33 percent – household items

  • 31 percent – meals

  • 27 percent – medicine

  • 11 percent – baby food/needs

Based on these findings, those surveyed were also asked if they were willing to consider drones as a “new corner store” for conveniently delivering small and last-minute necessities: 54 percent of the individuals said “yes.”

With regard to concerns related to these drone deliveries, 43 percent of those surveyed fear the drone will break down and they will not receive their item, and 19 percent are worried about not having human interaction with their delivery person. However, drone delivery and systems provide accurate trackability and direct delivery, and, therefore are more capable of accurate delivery timing. Delivery drones are built to analyze the environment with precision, to communicate through control software in a common language and predict safe landing spots for the packages. Air space is becoming a great option in a time when highways are filled with cars and trucks, and fuel prices are rising. Drones can help to reduce our reliance on gas-powered delivery vehicles, and provide safer, more flexible, and more cost-effective delivery.

Article By Kathryn M. Rattigan of Robinson & Cole LLP

For more privacy and cybersecurity legal news, click here to visit the National Law Review.

Copyright © 2022 Robinson & Cole LLP. All rights reserved.

A Rule 37 Refresher – As Applied to a Ransomware Attack

Federal Rule of Civil Procedure 37(e) (“Rule 37”) was completely rewritten in the 2015 amendments.  Before the 2015 amendments, the standard was that a party could not generally be sanctioned for data loss as a result of the routine, good faith operation of its system. That rule didn’t really capture the reality of all of the potential scenarios related to data issues nor did it provide the requisite guidance to attorneys and parties.

The new rule added a dimension of reasonableness to preservation and a roadmap for analysis.  The first guidepost is whether the information should have been preserved. This rule is based upon the common law duty to preserve when litigation is likely. The next guidepost is whether the data loss resulted from a failure to take reasonable steps to preserve. The final guidepost is whether or not the lost data can be restored or replaced through additional discovery.  If there is data that should have been preserved, that was lost because of failure to preserve, and that can’t be replicated, then the court has two additional decisions to make: (1) was there prejudice to another party from the loss OR (2) was there an intent to deprive another party of the information.  If the former, the court may only impose measures “no greater than necessary” to cure the prejudice.  If the latter, the court may take a variety of extreme measures, including dismissal of the action. An important distinction was created in the rule between negligence and intention.

So how does a ransomware attack fit into the new analytical framework? A Special Master in MasterObjects, Inc. v. Amazon.com (U.S. Dist. Court, Northern District of California, March 13, 2022) analyzed Rule 37 in the context of a ransomware attack. MasterObjects was the victim of a well-documented ransomware attack, which precluded the companies access to data prior to 2016. The Special Master considered the declaration from MasterObjects which explained that, despite using state of the art cybersecurity protections, the firm was attacked by hackers in December 2020.  The hack rendered all the files/mailboxes inaccessible without a recovery key set by the attackers.  The hackers demanded a ransom and the company contacted the FBI.  Both the FBI and insurer advised them not to pay the ransom. Despite spending hundreds of hours attempting to restore the data, everything prior to 2016 was inaccessible.

Applying Rule 37, the Special Master stated that, at the outset, there is no evidence that any electronically stored information was “lost.”  The data still exists and, while access has been blocked, it can be accessed in the future if a key is provided or a technological work-around is discovered.

Even if a denial of access is construed to be a “loss,” the Special Master found no evidence in this record that the loss occurred because MasterObjects failed to take reasonable steps to preserve it. This step of the analysis, “failure to take reasonable steps to preserve,” is a “critical, basic element” to prove spoliation.

On the issue of prejudice, Amazon argued that “we can’t know what we don’t know” (related to missing documents).  The Special Master did not find Amazon’s argument persuasive. The Special Master concluded that Amazon’s argument cannot survive the adoption of Rule 37(e). “The rule requires affirmative proof of prejudice in the specific destruction at issue.”

Takeaways:

  1. If you are in a spoliation dispute, make sure you have the experts and evidence to prove or defend your case.

  2. When you are trying to prove spoliation, know the new test and apply it in your analysis (the Special Master noted that Amazon did not reference Rule 37 in its briefing).

  3. As a business owner, when it comes to cybersecurity, you must take reasonable and defensible efforts to protect your data.

Article By Gretchen E. Moore of Strassburger McKenna Gutnick & Gefsky

For more cybersecurity and media legal news, click here to visit the National Law Review.

©2022 Strassburger McKenna Gutnick & Gefsky

Wegmans Settles With NYAG for $400,000 Over Data Incident

The New York Attorney General recently announced a data security-related settlement with Wegmans Food Markets. The issue arose in April 2021 regarding a cloud-based incident. At that time a security researcher notified Wegmans that the company had an Azure cloud storage container that was unsecured. Upon investigation, the company determined that the container had been misconfigured and that three million customer records had been publicly accessible since 2018. The records included email addresses and account passwords.

Of concern for the AG, among other things, were that the passwords were salted and hashed using SHA-1 hashing, rather than PBKDF2. Similarly, the AG found concerning the fact that the company did not have an asset inventory of what it maintained in the cloud. As a result, no security assessments were conducted of its cloud-based databases. The NYAG also took issue with the company’s lack of long-term logging: logs for its Azure assets were kept for only 30 days. Finally, the company kept checksums derived from customer driver’s license information, something for which the NYAG did not feel the company had a “reasonable business purpose” to collect or maintain.

The NYAG argued that these practices were both deceptive and unlawful in light of the promises Wegman’s made in its privacy policy. It also felt that the practices were a violation of the state’s data security law. As part of the settlement, Wegmans agreed to pay $400,000. It also agreed to implement a written information security program that addresses, among other things:

  1. asset management that covers cloud assets and identifies several items about the asset, including its owner, version, location, and criticality;
  1. access controls for all cloud assets;
  1. penetration testing that takes into account cloud assets, and includes at least one annual test of the cloud environment;
  1. central logging and monitoring for cloud assets, including keeping cloud logs readily accessible for 90 days (and further stored for a year from logged activity);
  1. customer password management that includes hashing algorithms and a salting policy that is at least commensurate with NIST standards and “reasonably anticipated security risks;” and
  1. policies and procedures around data collection and deletion.

Wegmans agreed to have the program assessed within a year of the settlement, with a written report by the third-party assessor provided to the NYAG. It will also conduct at-least-annual reviews of the program. As part of that review it will determine if any changes are needed to better protect and secure personal data.

Putting It Into Practice: This case is a reminder for companies to think not only about assets on its network, but its cloud assets, when designing a security program. Part of these efforts include clearly identifying locations that house personal information (as defined under security and breach laws) and evaluating the security practices and controls in place to protect that information. The security program elements the NYAG has asked for in this settlement signal its expectations of what constitutes a reasonable information security program.

Article By Kari M. Rollins and Liisa M. Thomas of Sheppard, Mullin, Richter & Hampton LLP

For more data privacy legal news, click here to visit the National Law Review.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.

Italian Garante Bans Google Analytics

On June 23, 2022, Italy’s data protection authority (the “Garante”) determined that a website’s use of the audience measurement tool Google Analytics is not compliant with the EU General Data Protection Regulation (“GDPR”), as the tool transfers personal data to the United States, which does not offer an adequate level of data protection. In making this determination, the Garante joins other EU data protection authorities, including the French and Austrian regulators, that also have found use of the tool to be unlawful.

The Garante determined that websites using Google Analytics collected via cookies personal data including user interactions with the website, pages visited, browser information, operating system, screen resolution, selected language, date and time of page views and user device IP address. This information was transferred to the United States without the additional safeguards for personal data required under the GDPR following the Schrems II determination, and therefore faced the possibility of governmental access. In the Garante’s ruling, website operator Caffeina Media S.r.l. was ordered to bring its processing into compliance with the GDPR within 90 days, but the ruling has wider implications as the Garante commented that it had received many “alerts and queries” relating to Google Analytics. It also stated that it called upon “all controllers to verify that the use of cookies and other tracking tools on their websites is compliant with data protection law; this applies in particular to Google Analytics and similar services.”

Article By the Privacy and Cybersecurity Practice Group at Hunton Andrews Kurth

For more data privacy and cybersecurity legal news, click here to visit the National Law Review.

Copyright © 2022, Hunton Andrews Kurth LLP. All Rights Reserved.

Throwing Out the Privacy Policy is a Bad Idea

The public internet has been around for about thirty years and consumers’ browser-based graphic-heavy experience has existed for about twenty-five years. In the early days, commercial websites operated without privacy policies.

Eventually, people started to realize that they were leaving trails of information online, and in the early ‘aughts the methods for business capturing and profiting from these trails became clear, although the actual uses of the data on individual sites was not clear. People asked for greater transparency from the sites they visited online, and in response received the privacy policy.

A deeply-flawed instrument, the website privacy policy purports to explain how information is gathered and used by a website owner, but most such policies are strangely both imprecise and too long, losing the average reader in a fog of legalese language and marginally relevant facts. Some privacy policies are intentionally obtuse because it doesn’t profit the website operator to make its methods obvious. Many are overly general, in part because the website company doesn’t want to change its policy every time it shifts business practices or vendor alliances. Many are just messy and poorly written.

Part of the reason that privacy policies are confusing is that data privacy is not a precise concept. The definition of data is context dependent. Data can mean the information about a transaction, information gathered from your browser visit (include where you were before and after the visit), information about you or your equipment, or even information derived by analysis of the other information. And we know that de-identified data can be re-identified in many cases, and that even a collection a generic data can lead to one of many ways to identify a person.

The definition of data is context dependent.

The definition of privacy is also untidy. An ecommerce company must capture certain information to fulfill an online order. In this era of connected objects, the company may continue to take information from the item while the consumer is using it. This is true for equipment from televisions to dishwashers to sex toys. The company likely uses this information internally to develop its products. It may use the data to market more goods or services to the consumer. It may transfer the information to other companies so they can market their products more effectively. The company may provide the information to the government. This week’s New Yorker devotes several pages to how the word “privacy” conflates major concepts in US law, including secrecy and autonomy,1 and is thus confusing to courts and public alike.

All of this is difficult to reflect in a privacy policy, even if the company has incentive to provide useful information to its customers.

Last month the Washington Post ran an article by Geoffrey Fowler that was subtitled “Let’s abolish reading privacy policies.” The article notes a 2019 Pew survey claiming that only 9 percent of Americans say they always read privacy policies. I would suggest that more than half of those Americans are lying. Almost no one always reads privacy policies upon first entering a website or downloading an app. That’s not even really what privacy policies are for.

Fowler shows why people do not read these policies. He writes, “As an experiment, I tallied up all of the privacy policies just for the apps on my phone. It totaled nearly 1 million words. “War and Peace” is about half as long. And that’s just my phone. Back in 2008, Lorrie Cranor, a professor of engineering and public policy at Carnegie Mellon University, and a colleague estimated that reading and consenting to all the privacy policies on websites Americans visit would take 244 hours per year.”

The length, complexity and opacity of online privacy policies are concerning. The best alleviation for this concern would not be to eliminate privacy policies, but to make them less instrumental in the most important decisions about descriptive data.

Limit companies’ use of data and we won’t need to fight through their privacy options.

Website owners should not be expected to write out privacy policies that are both sufficiently detailed and succinctly readable so that consumers can make meaningful choices about use of the data that describes them. This type of system forces a person to be responsible for her own data protection and takes the onus off of the company to limit its use of the data. It is like our current system of waste recycling – both ineffective and supported by polluters, because rather than forcing manufacturers to use more environmentally friendly packaging, it pushes consumers to deal with the problem at home, shifting the burden from industry to us.  Similarly, if the legislatures provided a set of simple rules for website operators – here is what you are allowed to do with personal data, and here is what you are not allowed to do with it – then no one would read privacy policies to make sure data about our transactions was spared the worst treatment. The worst treatment would be illegal.

State laws are moving in this direction, providing simpler rules restricting certain uses and transfers of personal data and sensitive data. We are early in the process, but if the trend continues regarding omnibus state privacy laws in the same manner that all states eventually passed data breach disclosure laws, then we can be optimistic and expect full coverage of online privacy rules for all Americans within a decade or so. But we shouldn’t need to wait for all states to comply.

Unlike the data breach disclosure laws which encourage companies to comply only with the laws relevant to their particular loss of data, omnibus privacy laws affect the way companies conduct the normal course of everyday business, so it will only take requirements in a few states before big companies start building their privacy rights recognition functions around the lowest common denominator. It will simply make economic sense for businesses to give every US customer the same rights as most protective state provides its residents. Why build 50 sets of rules when you don’t need to do so? The cost savings of maintaining only one privacy rights-recognition system will offset the cost of providing privacy rights to people in states who haven’t passed omnibus laws yet.

This won’t make privacy policies any easier to read, but it will become less important to read them. Then privacy policies can return to their core function, providing a record of how a company treats data. In other words, a reference document, rather than a set of choices inset into a pillow of legal terms.

We shouldn’t eliminate the privacy policy. We should reduce the importance of such polices, and limit their functions, reducing customer frustration with the privacy policy’s role in our current process. Limit companies’ use of data and we won’t need to fight through their privacy options.

ENDNOTES

1 Privacy law also conflates these meanings with obscurity in a crowd or in public.

Article By Theodore F. Claypoole of Womble Bond Dickinson (US) LLP

For more privacy and cybersecurity legal news, click here to visit the National Law Review.

Copyright © 2022 Womble Bond Dickinson (US) LLP All Rights Reserved.

Heated Debate Surrounds Proposed Federal Privacy Legislation

As we previously reported on the CPW blog, the leadership of the House Energy and Commerce Committee and the Ranking Member of the Senate Commerce Committee released a discussion draft of proposed federal privacy legislation, the American Data Privacy and Protection Act (“ADPPA”), on June 3, 2022. Signaling potential differences amongst key members of the Senate Committee on Commerce, Science, and Transportation, Chair Maria Cantwell (D-WA) withheld her support. Staking out her own position, Cantwell is reportedly floating an updated version of the Consumer Online Privacy Rights Act (“COPRA”), originally proposed in 2019.

Early Stakeholder Disagreement

As soon as a discussion draft of the ADPPA was published, privacy rights organizations, civil liberty groups, and businesses entered the fray, drawing up sides for and against the bill. The ACLU came out as an early critic of the legislation. In an open letter to Congress sent June 10, the group urged caution, arguing that both the ADPPA and COPRA contain “very problematic provisions.” According to the group, more time is required to develop truly meaningful privacy legislation, as evidenced by “ACLU state affiliates who have been unable to stop harmful or effectively useless state privacy bills from being pushed quickly to enactment with enormous lobbying and advertising support of sectors of the technology industry that resist changing a business model that depends on consumers not having protections against privacy invasions and discrimination.” To avoid this fate, the ACLU urges Congress to “bolster enforcement provisions, including providing a strong private right of action, and allow the states to continue to respond to new technologies and new privacy challenges with state privacy laws.”

On June 13, a trio of trade groups representing some of the largest tech companies sent their open letter to Congress, supporting passage of a federal privacy law, but ultimately opposing the ADPPA. Contrary to the position taken by the ACLU, the industry groups worry that the bill’s inclusion of a private right of action with the potential to recover attorneys’ fees will lead to litigation abuse. The groups took issue with other provisions as well, such as the legislation’s restrictions on the use of data derived from publicly-available sources and the “duty of loyalty” to individuals whose covered data is processed.

Industry groups and consumer protection organizations had the opportunity to voice their opinions regarding the ADPPA in a public hearing on June 14. Video of the proceedings and prepared testimony of the witnesses are available here. Two common themes arose in the witnesses’ testimony: (1) general support for federal privacy legislation; and (2) opposition to discrete aspects of the bill. As has been the case for the better part of a decade in which Congress has sought to draft a federal privacy bill, two fundamental issues continue to drive the debate and must be resolved in order for the legislation to become law: the private right of action to enforce the law and preemption of state laws or portions of them. . While civil rights and privacy advocacy groups maintain that the private right of action does not go far enough and that federal privacy legislation should not preempt state law, industry groups argue that a private right of action should not be permitted and that state privacy laws should be broadly preempted.

The Path Forward

The Subcommittee on Consumer Protection and Commerce of the House Energy and Commerce Committee is expected to mark up the draft bill the week of June 20. We expect the subcommittee to approve the draft bill with little or no changes. The full Energy and Commerce Committee should complete work on the bill before the August recess. Given the broad bipartisan support for the legislation in the House, we anticipate that the legislation, with minor tweaks, is likely to be approved by the House, setting up a showdown with the Senate after a decade of debate.

With the legislative session rapidly drawing to a close, the prospects for the ADPPA’s passage remain unclear. Intense disagreement remains amongst key constituency groups regarding important aspects of the proposed legislation. Yet, in spite of the differences, a review of the public comments to date regarding the ADPPA reveal one nearly unanimous opinion: the United States needs federal privacy legislation. In light of the fact that most interested parties agree that the U.S. would benefit from federal privacy legislation, Congress has more incentive than ever to reach compromise regarding one of the proposed privacy bills.

Article By Shea Leitch, Jeffrey L. Turner, Kristin L. Bryan, and Kyle R. Fath of Squire Patton Boggs (US) LLP

For more data privacy and cybersecurity legal news, click here to visit the National Law Review.

© Copyright 2022 Squire Patton Boggs (US) LLP

Privacy Tip #335 – Health Care Sector Continues to Be Hit with Ransomware

According to the 2022 State of Ransomware Report issued recently by Sophos, it surveyed 5,600 IT professionals from 31 countries, including professionals in the health care sector. Those professionals in the health care sector shared that 66 percent of them had experienced a ransomware attack in 2021, which was an increase of 69 percent over 2020. This was the largest increase of all sectors surveyed.

If you look at the Office for Civil Rights data breach portal, you will see that a vast majority of breaches reported by health care providers and business associates are related to “Hacking/IT incident.” This confirms that the health care sector continues to be attacked by threat actors seeking to steal protected health information of patients.

If you are a patient who receives a breach notification letter from a health care provider or business associate, the letter will provide guidance on how to protect yourself following a data breach and may offer some protection guidance, including credit monitoring or fraud resolution. Such a letter has been sent to patients to comply with the breach notification requirements of HIPAA and state law. Part of those requirements includes that the patients be provided mitigation steps following the breach to protect themselves from fraud. Avail yourself of these protections in the event your information is compromised. Take the time to sign up for the mitigation offered. It is clear that these attacks will not subside any time soon.

Article By Linn F. Freedman of Robinson & Cole LLP

For more cybersecurity and media legal news, click here to visit the National Law Review.

Copyright © 2022 Robinson & Cole LLP. All rights reserved.