Privacy & Information Security Law Blog

On February 22, 2013, the Federal Trade Commission announced that it had settled charges against HTC America, Inc. (“HTC”) alleging that the mobile device manufacturer “failed to take reasonable steps to secure the software it developed for its smartphones and tablet computers, introducing security flaws that placed sensitive information about millions of consumers at risk.” This settlement marks the FTC’s first case against a mobile device manufacturer.

On February 26, 2013, the National Institute of Standards and Technology (“NIST”) issued a Request for Information (“RFI”) to gather comments regarding the development of a framework to reduce cybersecurity risks to critical infrastructure. As we previously reported, the Obama Administration’s executive order, Improving Critical Infrastructure Cybersecurity (the “Executive Order”), released on February 12, 2013, directs NIST to coordinate development of this framework. Under the Executive Order, NIST is charged with collaborating with industry partners and identifying existing international standards and practices that have proven effective.

On February 20, 2013, Hunton & Williams LLP hosted a webinar on cybersecurity risks and the Obama Administration’s recently-issued Executive Order on cybersecurity issues related to critical infrastructure. The webinar, entitled “The Cybersecurity Executive Order: Understanding Its Impact on Your Business,” covered issues such as the current threat landscape, U.S. and EU regulatory initiatives related to cybersecurity, and guidelines to help businesses prevent and manage cyber events.

The Executive Order, “Improving Critical Infrastructure Cybersecurity,” and the Presidential Policy Directive (“PPD”), “Critical Infrastructure Security and Resilience,” signed by President Obama on February 12, 2013, raise the stakes in the national debate over cybersecurity requirements and seem likely, if not designed, to provoke a legislative response. Industry has good reason to pay attention.

On February 8, 2013, during the Centre for Information Policy Leadership’s First Friday call, Hunton & Williams partner Frederick Eames offered insights on how key U.S. government players are likely to approach privacy and data security initiatives this session. Eames discussed upcoming privacy legislation and outlined his predictions regarding how several Congressional committees, including the House of Representatives Energy & Commerce Committee and the Senate Committee on Commerce, Science, & Transportation, will address privacy-related issues.

On February 12, 2013, the Obama Administration released its highly-anticipated Executive Order on cybersecurity. Evolving cyber threats and increased government attention to these issues will affect companies in every industry, and businesses must consider a proactive approach to protecting against risks to critical business systems, company personal data, intellectual property and other proprietary information.

On February 12, 2013, in conjunction with the release of an executive order on Improving Critical Infrastructure Cybersecurity (the “Executive Order”), President Obama signed a Presidential Policy Directive on Critical Infrastructure Security and Resilience (“PPD-21” or “PPD”). The PPD revokes the 2003 Homeland Security Presidential Directive-7 (issued by President George W. Bush as an initiative under the former Office of Homeland Security and the Homeland Security Council) to adjust to the new risk environment and make the nation’s critical infrastructure more resilient. The PPD expands upon the work that has been accomplished to date for the physical security of critical infrastructure and lays a foundation for the implementation of the Executive Order to protect critical infrastructure cybersecurity.

On February 11, 2013, the Federal Trade Commission announced that a congressionally-mandated study of the U.S. credit reporting industry found that 26 percent of consumers identified at least one error that might affect their credit score. The study reported that 5 percent of consumers had errors on their credit reports that could result in less favorable terms for loans and insurance.

Today, the Obama Administration released an executive order, Improving Critical Infrastructure Cybersecurity (the “Executive Order”), which is focused primarily on government actions to support critical infrastructure owners and operators in protecting their systems and networks from cyber threats. The Executive Order requires administrative agencies with cybersecurity responsibilities to (1) share information in the near-term with the private sector within the scope of their current authority and to develop processes to address cyber risks; and (2) review and report to the President on the sufficiency of their current cyber authorities. The requirements to review and report to the President likely will serve to pressure Congress to pass more comprehensive legislation that should, inter alia, address issues that an executive order cannot, such as the provision of liability protection, incentives for compliance, and regulatory authority to compel compliance.

On January 17, 2013, Mexico’s Ministry of Economy published its Lineamientos del Aviso de Privacidad (in Spanish) (“Privacy Notice Guidelines” or “Guidelines”), which it prepared in collaboration with the Mexican data protection authority. The Guidelines introduce heightened notice and opt-out requirements for the use of cookies, web beacons and similar technology, and they impose extensive requirements on the content and delivery of privacy notices generally (with respect to all personal data, not just data collected via cookies and other automated means). The Guidelines will take effect in mid-April.