Privacy & Information Security Law Blog

On May 24, 2018, the Federal Trade Commission granted final approval to a settlement (the “Final Settlement”) with PayPal, Inc., to resolve charges that PayPal’s peer-to-peer payment service, Venmo, misled consumers regarding certain restrictions on the use of its service, as well as the privacy of transactions. The proposed settlement was announced on February 27, 2018. In its complaint, the FTC alleged that Venmo misrepresented its information security practices by stating that it “uses bank-grade security systems and data encryption to protect your financial information.” Instead, the FTC alleged that Venmo violated the Gramm-Leach-Bliley Act’s (“GLBA’s”) Safeguards Rule by failing to (1) have a written information security program; (2) assess the risks to the security, confidentiality and integrity of customer information; and (3) implement basic safeguards such as providing security notifications to users that their passwords were changed. The complaint also alleged that Venmo (1) misled consumers about their ability to transfer funds to external bank accounts, and (2) misrepresented the extent to which consumers could control the privacy of their transactions, in violation of the GLBA Privacy Rule.

The Department of Health and Human Services (“HHS”) recently published two advance notices of proposed rulemaking that address the accounting of disclosures and the potential distribution of civil monetary penalties to affected individuals.

On April 11, 2018, Arizona amended its data breach notification law (the “amended law”). The amended law will require persons, companies and government agencies doing business in the state to notify affected individuals within 45 days of determining that a breach has resulted in or is reasonably likely to result in substantial economic loss to affected individuals. The old law only required notification “in the most expedient manner possible and without unreasonable delay.” The amended law also broadens the definition of personal information and requires regulatory notice and notice to the consumer reporting agencies (“CRAs”) under certain circumstances.

On May 8, 2018, Senator Ron Wyden (D–OR) demanded that the Federal Communications Commission investigate the alleged unauthorized tracking of Americans’ locations by Securus Technologies, a company that provides phone services to prisons, jails and other correctional facilities. Securus allegedly purchases real-time location data from a third-party location aggregator and provides the data to law enforcement without obtaining judicial authorization for the disclosure of the data. In turn, the third-party location aggregator obtains the data from wireless carriers. Federal law restricts how and when wireless carriers can share certain customer information with third parties, including law enforcement. Wireless carriers are prohibited from sharing certain customer information, including location data, unless the carrier has obtained the customer’s consent or the sharing is otherwise required by law.

On May 16, 2018, the Irish Data Protection Bill 2018 (the “Bill”) entered the final committee stage in Dáil Éireann (the lower house and principal chamber of the Irish legislature). The Bill was passed by the Seanad (the upper house of the legislature) at the end of March 2018. In the current stage, final statements on the Bill will be made before it is signed into law by the President.

On May 2, 2018, the Belgian Privacy Commission (the “Belgian DPA”) published its Annual Activity Report for 2017 (the “Annual Report”), highlighting its main accomplishments for the past year.

On May 14, 2018, the Centre for Information Policy Leadership (“CIPL”) at Hunton Andrews Kurth LLP published a study on how the ePrivacy Regulation will affect the design and user experiences of digital services (the “Study”). The Study was prepared by Normally, a data product and service design studio, whom CIPL had asked for an independent expert opinion on user experience design.

On April 27, 2018, the Federal Trade Commission issued two warning letters to foreign marketers of geolocation tracking devices for violations of the U.S. Children’s Online Privacy Protection Act (“COPPA”). The first letter was directed to a Chinese company, Gator Group, Ltd., that sold the “Kids GPS Gator Watch” (marketed as a child’s first cellphone); the second was sent to a Swedish company, Tinitell, Inc., marketing a child-based app that works with a mobile phone worn like a watch. Both products collect a child’s precise geolocation data, and the Gator Watch includes geofencing “safe zones.”  

On May 1, 2018, the Information Security Technology – Personal Information Security Specification (the “Specification”) went into effect in China. The Specification is not binding and cannot be used as a direct basis for enforcement. However, enforcement agencies in China can still use the Specification as a reference or guideline in their administration and enforcement activities. For this reason, the Specification should be taken seriously as a best practice in personal data protection in China, and should be complied with where feasible.

On May 4, 2018, St. Kitts and Nevis’ legislators passed the Data Protection Bill 2018 (the “Bill”). The Bill was passed to promote the protection of personal data processed by public and private bodies.