Privacy & Information Security Law Blog

As reported in BNA Privacy Law Watch, a California legislative proposal would allocate additional resources to the California Attorney General’s office to facilitate the development of regulations required under the recently enacted California Consumer Privacy Act of 2018 (“CCPA”). CCPA was enacted in June 2018 and takes effect January 1, 2020. CCPA requires the California Attorney General to issue certain regulations prior to the effective date, including, among others, (1) to update the categories of data that constitute “personal information” under CCPA ...

On August 13, 2018, the Federal Trade Commission approved changes to the video game industry’s safe harbor guidelines under the Children’s Online Privacy Protection Act (“COPPA”) Rule. COPPA’s “safe harbor” provision enables industry groups to propose self-regulatory guidelines regarding COPPA compliance for FTC approval. 

On August 3, 2018, California-based Unixiz Inc. (“Unixiz”) agreed to shut down its “i-Dressup” website pursuant to a consent order with the New Jersey Attorney General, which the company entered into to settle charges that it violated the Children’s Online Privacy Protection Act (“COPPA”) and the New Jersey Consumer Fraud Act. The consent order also requires Unixiz to pay a civil penalty of $98,618.

On July 19, 2018, the French Data Protection Authority (“CNIL”) announced that it served a formal notice to two advertising startups headquartered in France, FIDZUP and TEEMO. Both companies collect personal data from mobile phones via software development kit (“SDK”) tools integrated into the code of their partners’ mobile apps—even when the apps are not in use—and process the data to conduct marketing campaigns on mobile phones.

On July 10, 2018, the Centre for Information Policy Leadership (“CIPL”) at Hunton Andrews Kurth LLP submitted formal comments to the European Data Protection Board (the “EDPB”) on its draft guidelines on certification and identifying certification criteria in accordance with Articles 42 and 43 of the GDPR (the “Guidelines”). The Guidelines were adopted by the EDPB on May 25, 2018, for public consultation.

On July 27, 2018, the Justice BN Srikrishna committee, formed by the Indian government in August 2017 with the goal of introducing a comprehensive data protection law in India, issued a report, A Free and Fair Digital Economy: Protecting Privacy, Empowering Indians (the “Committee Report”), and a draft data protection bill called the Personal Data Protection Bill, 2018 (the “Bill”). Noting that the Indian Supreme Court has recognized the right to privacy as a fundamental right, the Committee Report summarizes the existing data protection framework in India, and recommends that the government of India adopt a comprehensive data protection law such as that proposed in the Bill.

In its most recent cybersecurity newsletter, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) provided guidance regarding identifying vulnerabilities and mitigating the associated risks of software used to process electronic protected health information (“ePHI”). The guidance, along with additional resources identified by OCR, are outlined below:

On July 23, 2018, the Centre for Information Policy Leadership (“CIPL”) at Hunton Andrews Kurth LLP issued two new discussion papers on the Central Role of Organizational Accountability in Data Protection. The goal of these discussion papers is to show that organizational accountability is pivotal to effective data protection and essential for the digital transformation of the economy and society, and to emphasize how its many benefits should be actively encouraged and incentivized by data protection authorities (“DPAs”), and law and policy makers around the globe.

On July 17, 2018, the European Union and Japan successfully concluded negotiations on a reciprocal finding of an adequate level of data protection, thereby agreeing to recognize each other’s data protection systems as “equivalent.” This will allow personal data to flow safely between the EU and Japan, without being subject to any further safeguards or authorizations. 

This post has been updated. 

As reported by Mundie e Advogados, on July 10, 2018, Brazil’s Federal Senate approved a Data Protection Bill of Law (the “Bill”). The Bill, which is inspired by the EU General Data Protection Regulation (“GDPR”), is expected to be sent to the Brazilian President in the coming days.

As reported by Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados, the Bill establishes a comprehensive data protection regime in Brazil and imposes detailed rules for the collection, use, processing and storage of personal data, both electronic and physical.

On July 5, 2018, the European Parliament issued a nonbinding resolution (“the Resolution”) that calls on the European Commission to suspend the EU-U.S. Privacy Shield unless U.S. authorities can “fully comply” with the framework by September 1, 2018. The Resolution states that the data transfer mechanism does not provide the adequate level of protection for personal data as required by EU data protection law. The Resolution takes particular aim at potential access to EU residents’ personal data by U.S. national security agencies and law enforcement, citing the passage of the CLOUD Act as having “serious implications for the EU, as it is far-reaching and creates a potential conflict with the EU data protection laws.”

On July 2, 2018, the Federal Trade Commission announced that California company ReadyTech Corporation (“ReadyTech”) agreed to settle FTC allegations that ReadyTech misrepresented it was in the process of being certified as compliant with the EU-U.S. Privacy Shield (“Privacy Shield”) framework for lawfully transferring consumer data from the European Union to the United States. The FTC finalized this settlement on October 17, 2018.

As reported in BNA Privacy Law Watch, on June 27, 2018, Equifax entered into a consent order (the “Order”) with 8 state banking regulators (the “Multi-State Regulatory Agencies”), including those in New York and California, arising from the company’s 2017 data breach that exposed the personal information of 143 million consumers.

On June 28, 2018, the Governor of California signed AB 375, the California Consumer Privacy Act of 2018 (the “Act”). The Act introduces key privacy requirements for businesses, and was passed quickly by California lawmakers in an effort to remove a ballot initiative of the same name from the November 6, 2018, statewide ballot. We previously reported on the relevant ballot initiative. The Act will take effect January 1, 2020.

On June 25, 2018, the New York Department of Financial Services (“NYDFS”) issued a final regulation (the “Regulation”) requiring consumer reporting agencies with “significant operations” in New York to (1) register with NYDFS for the first time and (2) comply with the NYDFS’s cybersecurity regulation. Under the Regulation, consumer reporting agencies that reported on 1,000 or more New York consumers in the preceding year are subject to these requirements, and must register with NYDFS on or before September 1, 2018. The deadline for consumer reporting agencies to ...

Recently, Louisiana amended its Database Security Breach Notification Law (the “amended law”). Notably, the amended law (1) amends the state’s data breach notification law to expand the definition of personal information and requires notice to affected Louisiana residents within 60 days, and (2) imposes data security and destruction requirements on covered entities. The amended law goes into effect on August 1, 2018.

On June 6, 2018, the U.S. Court of Appeals for the Eleventh Circuit vacated a 2016 Federal Trade Commission (“FTC”) order compelling LabMD to implement a “comprehensive information security program that is reasonably designed to protect the security, confidentiality, and integrity of personal information collected from or about consumers.” The Eleventh Circuit agreed with LabMD that the FTC order was unenforceable because it did not direct the company to stop any “unfair act or practice” within the meaning of Section 5(a) of the Federal Trade Commission Act (the “FTC Act”).

On May 31, 2018, the Federal Trade Commission published on its Business Blog a post addressing the easily missed data deletion requirement under the Children’s Online Privacy Protection Act (“COPPA”).

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 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.

The Belgian Privacy Commission (the “Belgian DPA”) recently released a Recommendation (in French and Dutch) on Data Protection Impact Assessment (“DPIA”) and the prior consultation requirements under Articles 35 and 36 of the EU General Data Protection Regulation (“GDPR”) (the “Recommendation”). The Recommendation aims to provide guidance on the core elements and requirements of a DPIA, the different actors involved and specific provisions.

As reported in the Hunton Nickel Report:

Recent press reports indicate that a cyber attack disabled the third-party platform used by oil and gas pipeline company Energy Transfer Partners to exchange documents with other customers. Effects from the attack were largely confined because no other systems were impacted, including, most notably, industrial controls for critical infrastructure. However, the attack comes on the heels of an FBI and Department of Homeland Security (“DHS”) alert warning of Russian attempts to use tactics including spearphishing, watering hole attacks, and credential gathering to target industrial control systems throughout critical infrastructure, as well as an indictment against Iranian nationals who used similar tactics to attack private, education, and government institutions, including the Federal Energy Regulatory Commission (“FERC”). These incidents raise questions about cybersecurity across the U.S. pipeline network.

The Federal Trade Commission has modified its 2017 settlement with Uber Technologies, Inc. (“Uber”) after learning of an additional breach that was not taken into consideration during its earlier negotiations with the company. The modifications are based on the fact that Uber failed to notify the FTC of a November 2016 breach, which took place during the time that the FTC was investigating an earlier, 2014 breach. The 2016 breach occurred when intruders used an access key that an Uber engineer had posted on GitHub to download more than 47 million user names, including related email addresses or phone numbers, as well as more than 600,000 drivers’ names and license numbers. The FTC alleged that after Uber learned of the breach, it paid the intruders a $100,000 ransom through its “bug bounty” program. The bug bounty program is intended to reward responsible disclosure of security vulnerabilities.

On March 29, 2018, the Centre for Information Policy Leadership (“CIPL”) at Hunton Andrews Kurth LLP submitted formal comments to the Article 29 Working Party (the “Working Party”) on its draft guidelines on the accreditation of certification bodies under the GDPR (the “Guidelines”). The Guidelines were adopted by the Working Party on February 6, 2018, for public consultation.

The Canadian government recently published a cabinet order stating that the effective date for breach notification provisions in the Digital Privacy Act would be November 1, 2018. At that time, businesses that experience a "breach of security safeguards" would be required to notify affected individuals, as well as the Privacy Commissioner and any other organization or government institution that might be able to reduce the risk of harm resulting from the breach.

On March 20, 2018, the Centre for Information Policy Leadership ("CIPL") at Hunton Andrews Kurth LLP issued a factsheet outlining relevant GDPR provisions for negotiations surrounding the proposed ePrivacy Regulation (the "Factsheet").

On March 26, 2018, the U.S. Department of Commerce posted an update on the actions it has taken between January 2017 and March 2018 to support the EU-U.S. and Swiss-U.S. Privacy Shield Frameworks (collectively, the “Privacy Shield”). The update details measures taken in support of commercial and national security issues relating to the Privacy Shield.

On March 26, 2018, the Centre for Information Policy Leadership at Hunton & Williams LLP and AvePoint released its second Global GDPR Readiness Report (the “Report”), detailing the results of a joint global survey launched in July 2017 concerning organizational preparedness for implementing the EU General Data Protection Regulation (“GDPR”). The Report tracks the GDPR implementation efforts of over 235 multinational organizations, and builds on the findings of the first Global GDPR Readiness Report by providing insights on key changes in readiness levels from 2016 to 2017.

As reported in BNA Privacy Law Watch, on March 21, 2018, South Dakota enacted the state’s first data breach notification law. The law will take effect on July 1, 2018, and includes several key provisions:

On March 14, 2018, the Department of Justice and the Securities and Exchange Commission (“SEC”) announced insider trading charges against a former chief information officer (“CIO”) of a business unit of Equifax, Inc. According to prosecutors, the CIO exercised options and sold his shares after he learned of a cybersecurity breach and before that breach was publicly announced. Equifax has indicated that approximately 147.9 million consumers had personal information that was compromised.

On February 12, 2018, the Luxembourg data protection authority (Commission nationale pour la protection des donées, “CNPD”) published on its website (in English and French) a form to be used for the purpose of compliance with data breach notification requirements applicable under the EU General Data Protection Regulation (the “GDPR”). The CNPD also published questions and answers (“Q&As”) regarding the requirements.

On February 21, 2018, the U.S. Securities and Exchange Commission (“SEC”) published long-awaited cybersecurity interpretive guidance (the “Guidance”). The Guidance marks the first time that the five SEC commissioners, as opposed to agency staff, have provided guidance to U.S. public companies with regard to their cybersecurity disclosure and compliance obligations.

On February 13, 2018, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) announced that it entered into a resolution agreement with the receiver appointed to liquidate the assets of Filefax, Inc. (“Filefax”) in order to settle potential violations of HIPAA. Filefax offered medical record storage, maintenance and delivery services for covered entities, and had gone out of business during the course of OCR’s investigation. 

On February 12, 2018, in a settled enforcement action, the U.S. Commodity Futures Trading Commission (“CFTC”) charged a registered futures commission merchant (“FCM”) with violations of CFTC regulations relating to an ongoing data breach. Specifically, the FCM failed to diligently supervise an information technology provider's (“IT vendor’s”) implementation of certain provisions in the FCM’s written information systems security program. Though not unprecedented, this case represents a rare CFTC enforcement action premised on a cybersecurity failure at a CFTC-registered entity.

On February 5, 2018, the Federal Trade Commission (“FTC”) announced its most recent Children’s Online Privacy Protection Act (“COPPA”) case against Explore Talent, an online service marketed to aspiring actors and models. According to the FTC’s complaint, Explore Talent provided a free platform for consumers to find information about upcoming auditions, casting calls and other opportunities. The company also offered a monthly fee-based “pro” service that promised to provide consumers with access to specific opportunities. Users who registered online were asked to input a host of personal information including full name, email, telephone number, mailing address and photo; they also were asked to provide their eye color, hair color, body type, measurements, gender, ethnicity, age range and birth date.

On February 1, 2018, the Singapore Personal Data Protection Commission (the “PDPC”) published its response to feedback collected during a public consultation process conducted during the late summer and fall of 2017 (the “Response”). During that public consultation, the PDPC circulated a proposal relating to two general topics: (1) the relevance of two new alternative bases for collecting, using and disclosing personal data (“Notification of Purpose” and “Legal or Business Purpose”), and (2) a mandatory data breach notification requirement. The PDPC invited feedback from the public on these topics.

Recently, the General Services Administration (“GSA”) announced its plan to upgrade its cybersecurity requirements in an effort to build upon the Department of Defense’s new cybersecurity requirements, DFAR Section 252.204-7012, that became effective on December 31, 2017.

On January 22, 2018, the New York Department of Financial Services (“NYDFS”) issued a press release reminding entities covered by its cybersecurity regulation that the first certification of compliance with the regulation is due on or prior to February 15, 2018. Covered entities must file the certification, which covers the 2017 calendar year, at the NYDFS online portal.

On January 10, 2018, the Law of 3 December 2017 creating the Data Protection Authority (the “Law”) was published in the Belgian Official Gazette. The Law was submitted in the Chamber of Representatives on August 23, 2017, and was approved by the Parliament in plenary meeting on November 16, 2017.

On December 18, 2017, the French data protection authority (“CNIL”) publicly announced that it served a formal notice to WhatsApp regarding the sharing of WhatsApp users’ data with Facebook Inc. (“Facebook”). This decision, dated November 27, 2017, follows the CNIL’s investigations regarding Facebook’s 2014 acquisition of WhatsApp. In 2016, WhatsApp updated its Terms of Service and Privacy Policy to reflect the sharing of information with Facebook. Following this update, the Article 29 Working Party (“Working Party”) requested explanations from WhatsApp on its data processing practices and data sharing, and asked the company to stop sharing data for targeted advertising purposes. The Working Party also gave a mandate to its subgroup in charge of the cooperation on investigations and sanctions to coordinate actions of the relevant national data protection authorities. It is in that context that the CNIL started its investigation of WhatsApp’s data processing practices.

On November 7, 2017, the Standing Committee of the National People’s Congress of China published the second draft of the E-commerce Law (the “Second Draft”) and is allowing the general public an opportunity to comment through November 26, 2017.

On October 17, 2017, the French Data Protection Authority (“CNIL”), after a consultation with multiple industry participants that was launched on March 23, 2016, published its compliance pack on connected vehicles (the “Pack”) in line with its report of October 3, 2016. The Pack applies to connected vehicles for private use only (not to Intelligent Transport Systems), and describes the main principles data controllers must adhere to under both the current French legislation and the EU General Data Protection Regulation (“GDPR”).   

On October 3, 2017, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) issued an announcement clarifying when protected health information (“PHI”) can be shared with family, friends and others. This announcement, prompted by the recent mass shooting in Las Vegas, outlines the purposes for which PHI can be disclosed to these parties pursuant to HIPAA and the conditions that apply, which are summarized below:

This week, the Securities and Exchange Commission (“SEC”) announced the creation of a new Cyber Unit that will target cyber-related threats that may impact investors. The Cyber Unit, which will be part of the SEC’s Enforcement Division, will seek to combat various types of cyber-related threats including:

On September 20, 2017, the French Data Protection Authority (CNIL) announced that it has updated two standards on privacy seals in order to take into account the requirements of the EU General Data Protection Regulation (“GDPR”).

On September 15, 2017, the Federal Trade Commission published the ninth blog post in its “Stick with Security” series. As previously reported, the FTC will publish an entry every Friday for the next few months focusing on each of the 10 principles outlined in its Start with Security Guide for Businesses. This week’s post, entitled Stick with Security: Make sure your service providers implement reasonable security measures, highlights the importance for companies to ensure that the service providers they engage with implement reasonable security measures.

On September 7, 2017, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) issued an announcement containing disaster preparedness and recovery guidance in advance of Hurricane Irma. The announcement follows a bulletin issued in late August during Hurricane Harvey that addressed how protected health information (“PHI”) can be shared during emergencies. Together, these communications underscore key privacy and security issues for entities covered by HIPAA to help them protect individuals’ health information before, during and after emergency situations.

On August 31, 2017, the National Information Security Standardization Technical Committee of China published four draft voluntary guidelines (“Draft Guidelines”) in relation to the Cybersecurity Law of China. The Draft Guidelines are open for comment from the general public until October 13, 2017.

On August 25, 2017, U.S. District Judge Lucy Koh signed an order granting preliminary approval of the record class action settlement agreed to by Anthem Inc. this past June. The settlement arose out of a 2015 data breach that exposed the personal information of more than 78 million individuals, including names, dates of birth, Social Security numbers and health care ID numbers. The terms of the settlement include, among other things, the creation of a pool of funds to provide credit monitoring and reimbursement for out-of-pocket costs for customers, as well as up to $38 million in attorneys’ fees. Anthem will also be required to make certain changes to its data security systems and cybersecurity practices for at least three years.

As reported in BNA Privacy Law Watch, on August 22, 2017, the Russian privacy regulator, Roskomnadzor, announced that it had issued an order (the “Order”), effective immediately, revising notice protocols for companies that process personal data in Russia. Roskomnadzor stated that an earlier version of certain requirements for companies to notify the regulator of personal data processing was invalidated by the Russian Telecom Ministry in July.

On August 7, 2017, the Securities and Exchange Commission (“SEC”) Office of Compliance Inspections and Examinations (“OCIE”) issued a Risk Alert examining the cybersecurity policies and procedures of 75 broker-dealers, investment advisers and investment companies (collectively, the “firms”). The Risk Alert builds on OCIE’s 2014 Cybersecurity Initiative, a prior cybersecurity examination of the firms, and notes that while OCIE “observed increased cybersecurity preparedness” among the firms since 2014, it “also observed areas where compliance and oversight could be improved.”

As reported in BNA Privacy Law Watch, on August 17, 2017, Delaware amended its data breach notification law, effective April 14, 2018. The Delaware law previously required companies to give notice of a breach to affected Delaware residents “as soon as possible” after determining that, as a result of the breach, “misuse of information about a Delaware resident has occurred or is reasonably likely to occur.” The prior version of the law did not require regulator notification.

On August 15, 2017, the FTC announced that it had reached a settlement with Uber, Inc., over allegations that the ride-sharing company had made deceptive data privacy and security representations to its consumers. Under the terms of the settlement, Uber has agreed to implement a comprehensive privacy program and undergo regular, independent privacy audits for the next 20 years.

In the wake of China’s Cybersecurity Law going into effect on June 1, 2017, local authorities in Shantou and Chongqing have brought enforcement actions against information technology companies for violations of the Cybersecurity Law. These are, reportedly, the first enforcement actions brought pursuant to the Cybersecurity Law.

Recently, Nevada enacted an online privacy policy law which will require operators of websites and online services to post a notice on their website regarding their privacy practices. The Nevada law contains content requirements for online privacy notices, specifying that the notice must (1) identify the categories of personally identifiable information (“PII”) collected through the website and the categories of third parties with whom PII may be shared; (2) provide information about users’ ability to review and request changes to PII collected through the website; (3) disclose whether third parties may collect information about users’ online activities from the website; and (4) provide an effective date of the notice.

On July 25, 2017, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) announced the release of an updated web tool that highlights recent data breaches of health information.

On July 21, 2017, New Jersey Governor Chris Christie signed a bill that places new restrictions on the collection and use of personal information by retail establishments for certain purposes. The statute, which is called the Personal Information and Privacy Protection Act, permits retail establishments in New Jersey to scan a person’s driver’s license or other state-issued identification card only for the following eight purposes:

On July 5, 2017, the FTC announced that Blue Global Media, LLC (“Blue Global”) agreed to settle charges that it misled consumers into filling out loan applications and then sold those applications, including sensitive personal information contained therein, to other entities without verifying how consumers’ information would be used or whether it would remain secure. According to the FTC’s complaint, Blue Global claimed it would connect loan applicants to lenders from its network of over 100 lenders in an effort to offer applicants the best terms. In reality, Blue Global “sold very few of the loan applications to lenders; did not match applications based on loan rates or terms; and sold the loan applications to the first buyer willing to pay for them.” The FTC alleged that, contrary to Blue Global’s representations, the company provided consumers’ sensitive information—including SSN and bank account number—to buyers without consumers’ knowledge or consent. The FTC further alleged that, upon receiving complaints from consumers that their personal information was being misused, Blue Global failed to investigate or take action to prevent harm to consumers.

As companies in the EU and the U.S. prepare for the application of the EU General Data Protection Regulation (“GDPR”) in May 2018, Hunton & Williams’ Global Privacy and Cybersecurity partner Aaron Simpson discusses with Forcepoint the key, significant changes from the EU Directive that companies must comply with before next year. Accountability, expanded data subject rights, breach notification, sanctions and data transfer mechanisms are a few requirements that Simpson explores in detail. He reminds companies that, in the coming year, it will be very important to ...

On June 23, 2017, Anthem Inc., the nation’s second largest health insurer, reached a record $115 million settlement in a class action lawsuit arising out of a 2015 data breach that exposed the personal information of more than 78 million people. Among other things, the settlement creates a pool of funds to provide credit monitoring and reimbursement for out-of-pocket costs for customers, as well as up to $38 million in attorneys’ fees.

On June 21, 2017, the Federal Trade Commission updated its guidance, Six-Step Compliance Plan for Your Business, for complying with the Children’s Online Privacy Protection Act (“COPPA”). The FTC enforces the COPPA Rule, which sets requirements regarding children’s privacy and safety online. The updated guidance adds new information on situations where COPPA applies and steps to take for compliance.

The U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) and the Health Care Industry Cybersecurity Task Force (the “Task Force”) have published important materials addressing cybersecurity in the health care industry.

On June 5, 2017, an Illinois federal court ordered satellite television provider Dish Network LLC (“Dish”) to pay a record $280 million in civil penalties for violations of the FTC’s Telemarketing Sales Rule (“TSR”), the Telephone Consumer Protection Act (“TCPA”) and state law. In its complaint, the FTC alleged that Dish initiated, or caused a telemarketer to initiate, outbound telephone calls to phone numbers listed on the Do Not Call Registry, in violation of the TSR. The complaint further alleged that Dish violated the TSR’s prohibition on abandoned calls and assisted and facilitated telemarketers when it knew or consciously avoided knowing that telemarketers were breaking the law.

On June 2, 2017, in preparation for the first annual review of the EU-U.S. Privacy Shield (“Privacy Shield”) framework, the European Commission has sent questionnaires to trade associations and other groups, including the Centre for Information Policy Leadership at Hunton & Williams LLP, to seek information from their Privacy Shield-certified members on the experiences of such organizations during the first year of the Privacy Shield. The EU Commission intends to use the questionnaire responses to inform the annual review of the function, implementation, supervision and enforcement of the Privacy Shield.

Recently, the Colorado Division of Securities (the “Division”) published cybersecurity regulations for broker-dealers and investment advisers regulated by the Division. Colorado’s cybersecurity regulations follow similar regulations enacted in New York that apply to certain state-regulated financial institutions.

On June 1, 2017, the new Cybersecurity Law went into effect in China. This post takes stock of (1) which measures have been passed so far, (2) which ones go into effect on June 1 and (3) which ones are in progress but have yet to be promulgated.

On May 25, 2017, Oregon Governor Kate Brown signed into law H.B. 2090, which updates Oregon’s Unlawful Trade Practices Act by holding companies liable for making misrepresentations on their websites (e.g., in privacy policies) or in their consumer agreements about how they will use, disclose, collect, maintain, delete or dispose of consumer information. Pursuant to H.B. 2090, a company engages in an unlawful trade practice if it makes assertions to consumers regarding the handling of their information that are materially inconsistent with its actual practices. Consumers can ...

On May 10, 2017, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) announced a $2.4 million civil monetary penalty against Memorial Hermann Health System (“MHHS”) for alleged violations of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Privacy Rule. 

On May 12, 2017, a massive ransomware attack began affecting tens of thousands of computer systems in over 100 countries. The ransomware, known as “WannaCry,” leverages a Windows vulnerability and encrypts files on infected systems and demands payment for their release. If payment is not received within a specified time frame, the ransomware automatically deletes the files. A wide range of industries have been impacted by the attack, including businesses, hospitals, utilities and government entities around the world.

On April 24, 2017, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) announced that it had entered into a resolution agreement with CardioNet, Inc. (“CardioNet”) stemming from gaps in policies and procedures uncovered after CardioNet reported breaches of unsecured electronic protected health information (“ePHI”). CardioNet provides patients with an ambulatory cardiac monitoring service, and the settlement is OCR’s first with a wireless health services provider.

Earlier this month, the New York State Department of Financial Services (“NYDFS”) recently published FAQs and key dates for its cybersecurity regulation (the “NYDFS Regulation”) for financial institutions that became effective on March 1, 2017.

On April 12, 2017, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) entered into a resolution agreement with Metro Community Provider Network (“MCPN”) that stemmed from MCPN’s lack of a risk analysis and risk management plan that addressed risks and vulnerabilities to protected health information (“PHI”).

On April 12, 2017, the Centre for Information Policy Leadership (“CIPL”) at Hunton & Williams LLP issued a discussion paper on Certifications, Seals and Marks under the GDPR and Their Roles as Accountability Tools and Cross-Border Data Transfer Mechanisms (the “Discussion Paper”). The Discussion Paper sets forth recommendations concerning the implementation of the EU General Data Protection Regulation’s (“GDPR’s”) provisions on the development and use of certification mechanisms. The GDPR will become effective on May 25, 2018. The EU Commission, the Article 29 Working Party, individual EU data protection authorities (“DPAs”) and other stakeholders have begun to consider the role of GDPR certifications and how to develop and implement them. CIPL’s Discussion Paper is meant as formal input to that process.

On April 6, 2017, New York Attorney General Eric T. Schneiderman announced that privacy compliance company TRUSTe, Inc., agreed to settle allegations that it failed to properly verify that customer websites aimed at children did not run third-party software to track users. According to Attorney General Schneiderman, the enforcement action taken by the NY AG is the first to target a privacy compliance company over children’s privacy.

On April 4, 2017, the Article 29 Working Party (“Working Party”) adopted its draft Guidelines on Data Protection Impact Assessment and determining whether processing is “likely to result in a high risk” for the purposes of Regulation 2016/679 (the “Guidelines”). The Guidelines aim to clarify when a data protection impact assessment (“DPIA”) is required under the EU General Data Protection Regulation (“GDPR”). The Guidelines also provide criteria to Supervisory Authorities (“SAs”) to use to establish their lists of processing operations that will be subject to the DPIA requirement.

On April 4, 2017, the Article 29 Working Party (the “Working Party”) adopted an Opinion on the Proposed Regulation of the European Commission for the ePrivacy Regulation (the “Proposed ePrivacy Regulation”). The Proposed ePrivacy Regulation is intended to replace the ePrivacy Directive and to increase harmonization of ePrivacy rules in the EU. A regulation is directly applicable in all EU Member States, while a directive requires transposition into national law. 

Haim Ravia and Dotan Hammer of Pearl Cohen Zedek Latzer Baratz recently published an article outlining Israel’s new Protection of Privacy Regulations (“Regulations”), passed by the Knesset on March 21, 2017. The Regulations will impose mandatory comprehensive data security and breach notification requirements on anyone who owns, manages or maintains a database containing personal data in Israel.

The Regulations will become effective in late March 2018.

Read Pearl Cohen’s full article.

On March 17, 2017, retailer Neiman Marcus agreed to pay $1.6 million as part of a proposed settlement (the “Settlement”) to a consumer class action lawsuit stemming from a 2013 data breach that allegedly compromised the credit card data of approximately 350,000 customers.

On March 2, 2017, the UK Information Commissioner’s Office (“ICO”) published draft guidance regarding the consent requirements of the EU General Data Protection Regulation (“GDPR”). The guidance sets forth how the ICO interprets the GDPR’s consent requirements, and its recommended approach to compliance and good practice. The ICO guidance precedes the Article 29 Working Party’s guidance on consent, which is expected in 2017.

On March 9, 2017, AllClear ID hosted a webinar with Hunton & Williams partner and chair of the Global Privacy and Cybersecurity practice Lisa J. Sotto on the new cybersecurity regulations from the New York State Department of Financial Services (“NYDFS”). The NYDFS regulations impose significant cybersecurity requirements on impacted businesses that will dictate how they plan for, respond to and recover from data security events.

On March 9, 2017, AllClear ID will host a webinar with Hunton & Williams partner and chair of the Global Privacy and Cybersecurity practice Lisa J. Sotto on the new cybersecurity regulations from the New York State Department of Financial Services (“NYDFS”).

On March 1, 2017, the Federal Communications Commission (“FCC”), under the new leadership of Chairman Ajit Pai, voted 2-1 to issue a temporary stay of the data security obligations of the FCC’s Broadband Consumer Privacy Rules (the “Rules”), which were to go into effect March 2, 2017. The temporary stay will remain in place until the FCC is able to act on pending petitions for reconsideration.

China’s new Cybersecurity Law will impose new restrictions on information flows from operators of key information infrastructure, and will become effective in June 2017. Hunton & Williams LLP will host a webinar on China’s New Cybersecurity Law on March 7, 2017, at 12:00 p.m. EST.

On February 16, 2017, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) entered into a resolution agreement with Memorial Healthcare System (“Memorial”) that emphasized the importance of audit controls in preventing breaches of protected health information (“PHI”). The $5.5 million settlement with Memorial is the fourth enforcement action taken by OCR in 2017, and matches the largest civil monetary ever imposed against a single covered entity.

On January 18, 2017, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) entered into a resolution agreement with MAPFRE Life Insurance Company of Puerto Rico (“MAPFRE”) relating to a breach of protected health information (“PHI”) contained on a portable storage device. This is the second enforcement action taken by OCR in 2017, following the action taken against Presence Health earlier this month for failing to make timely breach notifications.

On January 19, 2017, the North American Electric Reliability Corporation (“NERC”) released a draft Reliability Standard CIP-013-1 – Cyber Security – Supply Chain Risk Management (the “Proposed Standard”). The Proposed Standard addresses directives of the Federal Energy Regulatory Commission (“FERC”) in Order No. 829 to develop a new or modified reliability standard to address “supply chain risk management for industrial control system hardware, software, and computing and networking services associated with bulk electric system operations.” 

Last month, the Standing Committee of the National People’s Congress of China published a full draft of the E-commerce Law (the “Draft”) and is giving the general public an opportunity to comment on the draft through January 26, 2017.

On January 7, 2017, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) entered into a resolution agreement with Presence Health stemming from the entity’s failure to notify affected individuals, the media and OCR within 60 days of discovering a breach. This marks the first OCR settlement of 2017 and the first enforcement action relating to untimely breach reporting by a HIPAA covered entity.

On January 3, 2017, Bloomberg Law: Privacy and Data Security reported that Chilean legislators are soon expected to consider a new data protection law (the “Bill”) which would impose new privacy compliance standards and certain enforcement provisions on companies doing business in Chile. 

On January 4, 2017, the National Institute of Standards and Technology (“NIST”) announced the final release of NISTIR 8062, An Introduction to Privacy Engineering and Risk Management in Federal Systems. NISTIR 8062 describes the concept of applying systems engineering practices to privacy and sets forth a model for conducting privacy risk assessments on federal systems. According to the NIST, NISTIR 8062 “hardens the way we treat privacy, moving us one step closer to making privacy more science than art.”

On January 3, 2017, the Office of Management and Budget (“OMB”) issued a memorandum (the “Breach Memorandum”) advising federal agencies on how to prepare for and respond to a breach of personally identifiable information (“PII”). The Breach Memorandum, which is intended for each agency’s Senior Agency Official for Privacy (“SAOP”), updates OMB’s breach notification policies and guidelines in accordance with the Federal Information Security Modernization Act of 2014 (“FISMA”).

On December 21, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that it had fined 12 financial institutions a total of $14.4 million for improper storage of electronic broker-dealer and customer records. Federal securities law and FINRA rules require that business-related electronic records be kept in “write once, read many” (“WORM”) format, which prevents alteration or destruction. FINRA found that the 12 sanctioned firms had failed to store such records in WORM format, in many cases for extended periods of time.

On December 28, 2016, the New York State Department of Financial Services (“DFS”) announced an updated version of its cybersecurity regulation for financial institutions (the “Updated Regulation”). The Updated Regulation will become effective on March 1, 2017.

On December 21, 2016, the Centre for Information Policy Leadership (“CIPL”) at Hunton & Williams LLP issued a white paper on Risk, High Risk, Risk Assessments and Data Protection Impact Assessments under the GDPR (the “White Paper”). The White Paper sets forth guidance and recommendations concerning the interpretation and implementation of the EU General Data Protection Regulation’s (“GDPR's”) provisions relating to risk and risk assessment, which will become applicable on May 25, 2018. While risk assessments already are required under the EU Data Protection Directive, the GDPR broadens the relevance of risk and risk assessment by explicitly and comprehensively incorporating a risk-based approach to data protection.

On November 19, 2016, the French government enacted a bill creating a legal basis for class actions against data controllers and processors resulting from data protection violations. The bill, which aims to facilitate access to justice for French citizens, establishes a general class action regime and includes specific provisions regarding data protection violations. These provisions go beyond the class action provisions already in place for consumers by adding, within the context of the French Data Protection Act of 1978 (“Loi Informatique et Libertés”), a right to class actions for data protection violations regardless of industry sector.

On November 23, 2016, Bloomberg BNA reported that the Hague Administrative Court in the Netherlands upheld a decision by the Dutch Data Protection Authority that WhatsApp was in breach of the Dutch Data Protection Act (the “Act”) on account of its alleged failure to identify a representative within the country responsible for compliance with the Act, despite the processing of personal data of Dutch WhatsApp users on Dutch smartphones. WhatsApp reportedly faces a fine of €10,000 per day up to a maximum of €1 million ...

On November 17, 2016, the Centre for Information Policy Leadership (“CIPL”) at Hunton & Williams LLP issued a white paper on Ensuring the Effectiveness and Strategic Role of the Data Protection Officer under the General Data Protection Regulation (the “White Paper”). The White Paper sets forth guidance and recommendations concerning the interpretation and implementation of the GDPR’s provisions relating to the role of the Data Protection Officer (“DPO”).

On November 14, 2016, Lincoln Financial Securities Corp. (“LFS”), a subsidiary of Lincoln Financial Group, entered into a settlement (the “Settlement”) with the Financial Industry Regulatory Authority (“FINRA”), requiring LFS to pay a $650,000 fine and implement stronger cybersecurity protocols following a 2012 hack into its cloud-based server.

On November 9, 2016, the Centre for Information Policy Leadership (“CIPL”) at Hunton & Williams LLP and AvePoint released the results of a joint global survey launched in May 2016 concerning organizational preparedness for implementing the EU General Data Protection Regulation (“GDPR”). The GDPR replaces Directive 95/46/EC and will become applicable in May 2018.

On October 25, 2016, the United States Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued an advisory entitled Advisory to Financial Institutions on Cyber-Events and Cyber-Enabled Crime (the “Advisory”), to help financial institutions understand how to fulfill their Bank Secrecy Act obligations with regard to cyber events and cyber-enabled crime. The Advisory indicates that SAR reporting is mandatory for cyber events where the financial institution “knows, suspects or has reason to suspect a cyber-event was intended, in whole or in part, to conduct, facilitate, or affect a transaction or a series of transactions….” Implementing this new guidance will require increased collaboration between AML and cybersecurity or IT departments in large institutions, and may create challenges for smaller banks that are more likely to outsource their cybersecurity functions.