Just when you thought it was safe to open your e-mail again without being inundated with updated privacy policies, here comes the California Consumer Privacy Act of 2018 (“CCPA”). The new law, which goes into effect on January 1, 2020, will expand the privacy rights of California residents and bring some of the EU’s widely discussed General Data Protection Regulation (“GDPR”) to the United States. There will be lots to talk about over the next year and a half as companies gear up for compliance, but here are some key features to be aware of:
What Is GDPR?
The EU General Data Protection Regulation (GDPR),—described as “the most important change in data privacy regulation in 20 years”—becomes enforceable by law on May 25, 2018. After four years of preparation and debate, GDPR was approved by the EU Parliament in April 2016 to replace the Data Protection Directive 95/46/EC. According to the EUGDPR.org, the overarching purpose of GDPR is to “harmonize data privacy laws across Europe, to protect and empower all EU citizens data privacy and to reshape the way organizations across the region approach data privacy.” Expected to comply are organizations located within the EU; that offer goods or services to, or monitor the behavior of, EU data subjects; and all companies processing and holding the personal data of data subjects residing in the EU.
A North Carolina bill designed to strengthen the state’s data breach notification statute could radically change incident response. Through the Act to Strengthen Identity Theft Protections, North Carolina could quickly become one of the strictest jurisdictions for data security in the country. The text of the bill has not yet been made public, but a fact sheet released earlier this month indicates that North Carolina may take drastic steps to address the fact that 5.3 million North Carolinians were impacted by data breaches in 2017. Continue Reading Data Breach Notification Revisions in North Carolina Would Bring Radical Change
As 2017 comes to a close and companies look to planning initiatives for 2018, there is one date that should be front and center for privacy professionals: May 25, 2018. That is the date that the EU’s General Data Protection Regulation (GDPR) goes into effect, meaning that any company dealing with EU consumer data needs to have a plan in place. The GDPR has been looming for almost two years now (since its adoption on April 27, 2016), so hopefully most companies impacted by the regulation have already begun to implement compliance mechanisms. But if not, it’s not too late.
We have written previously in this space about what the scope of the GDPR requirements. The question now is what companies covered by the GDPR should be doing as they head into 2018. Here are some critical steps to make sure you are on track to ensure GDPR compliance:
The EU’s General Data Protection Regulation (679/2016/EU), the GDPR, comes into force across the EU on 25 May 2018. As it is being made by regulation the GDPR, unlike the existing Data Protection Directive (implemented into the UK by the Data Protection Act 1998), will have direct effect throughout the EU. National governments will have some limited scope to tailor certain of its provisions to their jurisdiction. However, the GDPR will significantly harmonise the current national data protection laws across the EU.
Notwithstanding Brexit, the UK government has indicated its intention to implement the GDPR in full. The UK regulator’s (the Information Commissioner’s Office) powers and ability to work seamlessly with other national EU regulators will form a negotiation point in the coming Brexit deal. Continue Reading EU General Data Protection Regulation: A Summary for Non-EU Businesses
Businesses have largely benefitted from the proliferation of mobile devices and text messaging apps that facilitate quick, round-the-clock communications. However, such technologies also make it increasingly difficult to monitor and control the unauthorized distribution of confidential data. On March 30, UK regulators fined a former managing director of Jeffries Group for divulging confidential client information. The banker, Christopher Niehaus, shared confidential information with two friends using WhatsApp, a popular text messaging app. The exposed information included the identity of a Jeffries Group client, the details of a deal involving the client, and the bank’s fee for the transaction. Perhaps the most surprising aspect of this story is that the leak was discovered at all. Because data sent on WhatsApp are encrypted and Mr. Niehaus used his personal mobile phone to send the messages, Jeffries Group only viewed the communications—and subsequently informed regulators—after Mr. Niehaus turned his device over to the bank in connection with an unrelated investigation. Continue Reading Encrypted Messaging Apps Create New Data Privacy Headaches for Employers
Plaintiffs’ lawyers across the land have trumpeted the U.S. Supreme Court’s decision in Spokeo as a victory (or at least not a loss). Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016). At least one plaintiff’s lawyer has gone so far as to suggest that defense lawyers who raise Spokeo-based arguments should fear sanctions. As a Southern colleague of mine would say, those lawyers are trying to make a silk purse of a sow’s ear.
Although many post-Spokeo decisions have not yielded dismissal, many have, and they have done so based largely on Spokeo, which does more than reaffirm prior notions of standing and rather strengthens them in a way that is quite beneficial to corporate defendants facing trumped-up claims with no real harm. One of the most recent defense victories post-Spokeo is Meyers v. Nicolet Rest. of De Pere, LLC, 2016 U.S. App. LEXIS 22139 (7th Cir. Dec. 13, 2016). Continue Reading Spokeo Was a Loss for Plaintiffs, Seventh Circuit Reaffirms
A relatively new breed of data breach class action involves financial institutions suing merchants for expenses associated with credit card data breaches. Although merchants may not have contractual privity with the card issuers (and instead may have contractual privity with the credit card brands or payment processors), the financial institutions in these cases claim that the retailers should still compensate the financial institutions for costs associated with fraudulent charges and reissuance of credit cards as a result of a data breach. In the most recent decision involving these sorts of claims, an Illinois federal judge found the financial institutions’ claims against the Shnucks grocery store chain too vague to survive Rule 12 dismissal. See Cmty. Bank of Trenton v. Schnuck Mkts., 2016 U.S. Dist. LEXIS 133482 (S.D. Ill. Sept. 28, 2016). The court reasoned that although “the parties are charting relatively new territory in the data breach context by presenting a case between financial institutions and a merchant (as opposed to customers and a merchant), . . . the Court notes that the generality made it difficult to assess the plausibility of such claims.” Id. at *8-9. Continue Reading Schnucks Shakes Card Issuer Data Breach Class Action, For Now
After nine months of intense negotiations and uncertainty, and despite ongoing criticisms from powerful data protection regulators, the new EU-U.S. Privacy Shield program went into effect this week as the U.S. Department of Commerce began accepting applications online. Some companies that are self-certifying their compliance have already submitted their documentation and many more are expected to do so in the coming days and weeks as they seek shelter under the replacement for the long-standing EU-U.S. Safe Harbor arrangement that was invalidated by the European Court of Justice last year.
Companies can now “sign up” for the Privacy Shield list, but they should not expect a rubber stamp from the Commerce Department just because they have self-certified. To ensure that their applications are approved, companies should take the following steps:
- Confirm that they are eligible to participate—not all organizations are. Only companies subject to the jurisdiction of the FTC or the DOT may participate at this time
- Identify their independent recourse mechanism—under the new framework, self-certifying organizations must provide an independent recourse mechanism available to investigate unresolved complaints at no cost to the individual
- Ensure that they have compliance verification mechanisms in place
- Designate contacts within their organizations to serve as liaisons regarding the Privacy Shield
- Review the information required to self-certify
- Go online to www.privacyshield.gov to self-certify
It’s been awhile since last we published for our firm blog Media & Privacy Risk Report, and one thing is largely to blame: ransomware attacks on our clients have been keeping us very busy. We’ve learned many lessons from these attacks that we plan to share over the coming months with our readers. But the focus of this post is recent guidance from the Office of Civil Rights of the Department of Health and Human Services (OCR) indicating that any ransomware attack involving protected health information PHI) could be a data breach with Health Insurance Portability and Accountability Act (HIPAA) reporting obligations.
Often in ransomware matters, a hacker encrypts data and demands that a ransom be paid (usually in Bitcoin) before the hacker will decrypt the data and make it once again accessible to the data owner (or covered entity) or maintainer (or business associate). But just because a hacker has frozen your data, does that mean that the hacker has accessed, acquired or exfiltrated your data? Isn’t it possible that a hacker could freeze your data without accessing, acquiring or exfiltrating it? By analogy, couldn’t someone render the locks on your house unusable (and thus your house inaccessible to you without a forced break-in) without actually accessing your house, acquiring anything within your house, or taking anything out of your house? It would seem that the answer would be yes. But if the OCR is asked that question, the presumption is that the answer is no, at least in the realm of ransomware attacks. Continue Reading OCR: Ransomware Attack Often Is a Data Breach