In the largest ever data security enforcement action taken by the Federal Communications Commission (FCC), AT&T agreed to pay $25 million to resolve an investigation into consumer privacy violations at its call centers in Mexico, Colombia, and the Philippines. The FCC announced the settlement on April 8, 2015, stating that phone companies are expected to “zealously guard” their customers’ personal information and encouraging the industry to “look to this agreement as guidance.” Continue Reading
The past few years have seen exponential growth in the use of technology in the classroom, with applications ranging from the increased availability and use of e-books to the displacement of physical classrooms through Massive Open Online Courses (also known as MOOCs). One of the fastest growing segments of the education technology market relates to online educational services and applications, which are designed to track individual student progress and use the data gathered to deliver an individualized learning experience to each user. However, while online educational services and applications hold significant potential, the gathering of massive amounts of data has also sparked fears about what data will be collected, from whom, how it will be used, and whether, if at all, it will be deleted. This fear is especially prevalent when it comes to online educational services and applications targeted at children.
Last week, Australia became the latest country to pass a mandatory data retention law. The Telecommunications (Interception and Access) Amendment (Data Retention) Bill 2015, which amends Australia’s Telecommunications (Interception and Access) Act 1979, requires telecommunications and Internet service providers (ISPs) to store customer metadata for two years. This means that Australian ISPs and telecom providers will have to store data associated with electronic communications, such as the names and addresses of account holders, the names of the recipients of any communications, the time and duration of communications, the location of equipment used to make the communication (such as cell towers), and computers’ IP addresses. Although the law does not require ISPs and telecoms to store the contents of customers’ electronic communications, metadata still can provide a picture of an individual’s identity, interests, and even location, which makes it of great interest to law enforcement and national security agencies seeking to prevent crime and terrorist attacks. Indeed, the law was promoted as a national security measure designed to give law enforcement access to information that could allow them to prevent terrorist attacks, but its opponents have decried it as a means to subject Australians to mass government surveillance.
The US-EU Safe Harbor has been back in the news recently as Germany’s data protection commissioners met at the end of January and expressed impatience at the delay in implementing what many view as necessary reforms to the program. The European Court of Justice also recently heard a challenge to Facebook’s reliance on the Safe Harbor for the transfer of user data in what many see as an important test case; this lawsuit will be the topic of a future blog post. Continue Reading
With the news of the recent cyber-attack and resulting data breach at health insurance giant Anthem Inc., the buzz around data security and privacy is again high. The Anthem breach serves as a reminder to those entities subject to the Health Insurance Portability and Accountability Act (HIPAA) that failing to keep protected health information secure and private can lead to serious consequences. Continue Reading
Data security is big news. And so is the Federal Trade Commission (“FTC”). Put the two together in a crucible of litigation, and it is sure to be a blockbuster. That is what the closely-watched case FTC v. Wyndham, now pending before the Third Circuit Court of Appeals, is shaping up to be.
To compile data for the report, the EU’s Article 29 Data Protection Working Party conducted a sweep of 478 of the most frequently visited websites in the e-commerce, media, and public sectors in eight EU Member States. The sweep targeted websites in these sectors because they likely pose the greatest risk to data protection and privacy for European citizens. The cookie sweep consisted of two stages: (1) a statistical review of cookies used by the websites and their technical properties; and (2) an in-depth manual review of cookie information and consent mechanisms. The study recorded each website’s cookie notification method, the visibility and quality of cookie information provided, and the mechanism offered for users to express consent. Continue Reading
On January 27, 2015 the Federal Trade Commission (the “FTC”) issued a report detailing best practices and recommendations that businesses engaged in the Internet of Things (“IoT”) can follow to protect consumer privacy and security. The IoT refers to the connection of everyday objects to the Internet and the transmission of data between those devices. According to Gartner estimates the IoT services spending will reach $69.5 billion in 2015. The potential benefits of IoT growth include enhanced healthcare through connected medical devices, convenience and cost savings through home automation and improved safety and convenience through connected cars.
On February 3, 2015, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) issued a Risk Alert that summarized its findings about cybersecurity preparedness in the securities industry. As part of its Cybersecurity Examination Initiative, the OCIE collected and analyzed information about cybersecurity practices and trends from over 100 registered investment advisers and broker-dealers. Proskauer discussed the OCIE study and its key findings in a client alert located here. With the OCIE stating that it will continue to focus on cybersecurity issues through 2015, registered investment advisers and broker-dealers should evaluate their cybersecurity policies and procedures in consideration of the OCIE findings.
Anthem Inc. (Anthem), the nation’s second-largest health insurer, revealed late on Wednesday, February 4 that it was the victim of a significant cyber attack. According to Anthem, the attack exposed personal information of approximately 80 million individuals, including those insured by related Anthem companies. Continue Reading
On January 23, 2015, Senior Attorney Lesley Fair at the Federal Trade Commission (“FTC”) posted on the Agency’s business blog clarifying how the Children’s Online Privacy Protection Act (“COPPA”) applies to schools. COPPA seeks to protect the privacy of children by allowing parents to control what personal information about their children under the age of thirteen may be collected by “operators” of websites or online services, including apps, that are either directed to children or that knowingly collect personally identifiable information from children. Subject to certain regulatory exceptions, the entities covered by COPPA must notify parents and obtain consent before collecting, using, or disclosing any personal information from children under thirteen. Continue Reading
Big or small, all bank accounts are susceptible to hijacking and fraudulent wire transfers. Banks ordinarily bear the risk of loss for unauthorized wire transfers. Two independent frameworks exist to govern these transfers: the Electronic Fund Transfer Act (“EFTA”) for consumer accounts, and Article 4A of the Uniform Commercial Code (“UCC”) for business accounts.
While the EFTA will ordinarily shield consumers from having to pay for most unauthorized charges as long as they provide notice to their bank, UCC §4A-202 shifts the risk of loss to the customer if the bank can show that (1) a commercially reasonable security procedure was in place and (2) the bank accepted the payment order in good faith and in compliance with the security procedure and any other written agreement or customer instruction.
The commercial reasonability of a security procedure is a question of law, and courts will consider several factors, including:
- Customer instructions expressed to the bank
- The bank’s understanding of the customer’s situation, including the size, type, and frequency of payment orders ordinarily issued
- Alternative security procedures offered to the customer
- Security procedures in general use by similarly situated banks and customers.
In addition, a security procedure will be found commercially reasonable if the customer selected it after refusing a security procedure that was commercially reasonable for the customer’s needs.