The U.S. Court of Appeals for the Eighth Circuit has become the latest appellate court to enter the contested debate over Article III standing in data breach litigation. The Eighth Circuit held that 15 of 16 named plaintiffs who never alleged they had suffered identity theft or incurred fraudulent charges on their payment cards did not have standing to pursue claims based on alleged risk of future harm in the multidistrict action In re SuperValu, Inc. Customer Data Security Breach Litigation. The Eighth Circuit’s opinion comes on the heels of other decisions that found risk of future harm following a data breach sufficient to confer Article III standing on class action plaintiffs.
The International Institute for Conflict Prevention and Resolution, a New York-based organisation offering Alternative Dispute Resolution services, has recently announced the launch of a new specialised panel of neutrals, commissioned to deal with cybersecurity disputes. The Cyber Panel is composed of experts in cyber-related areas such as data breaches and subsequent insurance claims. In a press release, Noah Hanft, President of CPR, described the new panel as guiding the “critical effort” by businesses to “prevent and/or resolve cyber-related disputes in a manner that best protects operations, customers and reputation” due to attacks now occurring with increased frequency and sophistication.
The first of several implementation deadlines in connection with the New York State Department of Financial Services’ cybersecurity regulations occurs this month, on August 28. In this post, we provide an overview of the implementation requirements to assist covered entities in preparing for the upcoming deadline.
On August 1, a bipartisan group of four senators introduced a bill that would impose specific cybersecurity requirements on providers of Internet of Things devices when doing business with the U.S. Government and provide liability protections for security researchers who disclose vulnerabilities affecting these devices. Though the bill’s security requirements would apply only in cases where entities are acting as contractors to the U.S. Government, if enacted, it likely would be influential on IoT vendors operating in the consumer context as well. The bill is largely consistent with an ongoing multistakeholder effort led by the National Telecommunications and Information Administration aimed at developing voluntary security standards for Internet-connected devices.
How do you ensure that an Internet-connected sensor or device—often inexpensive and designed for lifespans of up to 20 years or more—can be secured against not only the intrusions of today but also those of the future? This question has taken on new urgency as low-cost Internet-connected devices are increasingly being co-opted into massive networks, known as “botnets,” that are capable of causing widespread disruption.
Earlier this year, the National Association of Corporate Directors released an updated version of its Director’s Handbook on Cyber-Risk Oversight. The NACD’s issuance of an update to its Handbook in just three years signals that cybersecurity-related governance expectations of companies and directors are evolving. While the use of and compliance with the Handbook is not mandatory, the Handbook is influential in shaping governance practices and thus it is prudent for those involved in corporate governance to familiarize themselves with the changes.
Malware was recently identified that appears to have been designed and deployed by a nation-state to target and shut down electric grids. According to published reports, this malware currently appears to be capable of attacking the European grids, and parts of the Middle East and Asia grids, by targeting the specific industrial control system network protocols used to operate those grids. With small modifications, the malware reportedly also appears to be capable of attacking the North American power grid, as well as other industries that use ICS networks (e.g., oil, gas, water, data) around the globe. This post discusses the malware as well as vulnerability management.
The Federal Financial Institutions Examination Council recently released an updated version of its Cybersecurity Assessment Tool, which, according to FFIEC, is designed to help the financial institutions voluntarily using the tool to “identify their cyber risks and determine their cybersecurity preparedness.” We explore the changes to the CAT in this post.
Major companies, health care organizations and government agencies are facing a wave of cyberattacks involving ransomware that takes control of computers and denies access until a ransom is paid. These attacks are occurring on a global scale and in some cases are having a significant impact on business and healthcare operations. The cyberattack has disrupted targets throughout the world from Britain’s National Health Service to US Fortune 500 companies, the Russian Foreign Ministry, and universities in China.
The Federal Trade Commission and National Highway Traffic Safety Administration are co-hosting a workshop on June 28, 2017, to explore the privacy and security issues raised by automated and connected vehicle technologies. The agencies are looking to explore the types of data such technologies collect, store, transmit, and share; the potential benefits and challenges posed by the technologies; the privacy and security practices of vehicle manufacturers; the roles that federal agencies should play in regulating privacy and security issues; and how self-regulatory standards apply to connected vehicle privacy and security issues. In advance of the workshop, the FTC and NHTSA are seeking public comment on privacy and security issues. Comments may be submitted through April 20, 2017.
As Hogan Lovells previously reported, the New York State Department of Financial Services has launched a significant initiative to impose detailed cybersecurity requirements on covered financial institutions. On February 16, NYDFS issued its Final Rules, following the initial proposed rules published in September 2016 and two rounds of feedback via industry complaints and public comment. The Final Rules set forth requirements for a risk-based approach to cybersecurity, and include expectations for reporting on cybersecurity risks and events to senior management and NYDFS.
In the past month, the National Institute of Standards and Technology has issued a draft update to its flagship cybersecurity framework as well as new standalone guidance on how organizations can plan to recover from cybersecurity events. The publication of these documents demonstrates NIST’s ongoing focus on providing substantive guidance to the private and public sectors alike on cybersecurity risk management. In this post we summarize the highlights of each of these new NIST publications.
The New York Department of Financial Services just issued major revisions to the cybersecurity regulations for financial institutions that were due to come into effect on January 1, 2017. To allow covered institutions more time to implement the rules, the effective date will now be March 1, 2017, with a series of staggered implementation dates beyond this. There are several notable substantive changes in the revised rules.
To coincide with the London Conference on Cyberspace, the UK Government published its first UK Cyber Security Strategy paper in November 2011. Five years later in November 2016, the National Cyber Security Strategy 2016 was published listing three key objectives: defend, detect, develop.
The Internet of Things continues to draw broad interest from policymakers and regulators around the globe. Following on the heels of a major distributed denial-of-service attack in October 2016 that leveraged potentially millions of compromised IoT devices, members of Congress have sent letters to US federal agencies regarding the risks posed by insecure IoT devices and held a hearing about what if anything should be the US federal response to such IoT-driven cyberattacks. Against that backdrop, in November 2016 two US federal agencies have issued guidance on securing IoT.
China’s Cyber Security Law, which will take effect from 1 June, 2017 was adopted on 7 November. The third draft of the law adopted by the Standing Committee of the National People’s Congress, China’s highest legislative authority, contained few changes from the second draft put forward for comment in July, 2016. The net result is continued controversy coupled with a dose of uncertainty (never a good combination), with multi-national businesses in particular questioning the intent of the law and criticising its vagueness. The final draft contains a number of broadly-framed defined terms that are critical to its interpretation which continue to leave much to be resolved through detailed measures that may or may not follow, as a lack of clarity leaves room for interpretation. All in all, the direction of travel is towards a much more heavily regulated Chinese internet and technology sector, with an open question as to whether China’s cyber space will be integrated with the rest of the world in the coming years or will plough its own virtual furrow.
In September, we proudly launched our online client cybersecurity resource portal: Ready, Set, Respond. The portal was designed by our cross-practice team of global practitioners to provide in-house counsel with the tools they need to not only prepare for the inevitable cybersecurity incident, but quickly and easily stay up to date on the evolving state of cybersecurity regulation around the world. Today, we’re taking a closer look at the Asia region with our partner Mark Parsons. Visit Ready, Set, Respond for more information or to take advantage of the tools and data available there.
On October 13, the Federal Trade Commission held a workshop on drone privacy and cybersecurity as part of its Fall Technology Series. Close watchers of the drone privacy debate would recognize the arguments presented at the FTC workshop as reminiscent of the comprehensive and productive debate over drone privacy played out before the National Telecommunications and Information Administration earlier this year. The NTIA process concluded with the release of Best Practices for drone privacy supported by a diverse group of industry members and civil society representatives. Although the FTC’s workshop was in many ways a reprise of the NTIA multi-stakeholder debate, the workshop was notable insofar as the public gained new insights into FTC staff views on drone privacy and cybersecurity.
Some of the largest cyber attacks in recent memory have employed an army of connected home devices to achieve their goals. This co-opting of connected home devices owned by consumers around the world occurs without those consumers’ knowledge or consent. For example, in mid-September, several thousand devices—home routers, Internet-connected video cameras, and digital video recorders—were used to create a “botnet” that collectively pounded the security researcher Brian Krebs’ website with 620 gigabits of data per second. At the time, the attack was thought to be the largest in history. An even larger army was assembled a few days later for an attack on the French hosting provider OVH that peaked at over one terabit of traffic per second. These distributed denial-of-service attacks were successful because they exploited basic security vulnerabilities in connected home devices, such as default passwords used to access administrator settings.
This week, the Online Trust Alliance turned its attention from manufacturers to consumers by releasing a checklist of basic steps that consumers can take to improve the privacy and security “hygiene” of their connected home and wearable devices. Just as smoke detectors require periodic battery changes, the OTA warns that IoT devices also benefit from regular checkups.
Cybersecurity risk continues to evolve at an astonishingly rapid rate, prompting companies to review and adjust their plans to deal with the fast-moving threats posed by an increasingly connected world. At the same time, cybersecurity law and regulation around the world are coming of age. In this complex and uncertain environment, it is not surprising that lawyers are increasingly being asked to guide on governance, counsel on compliance and risk allocation, and lead in the event of a cyber incident.
Drawing on our work with clients across the globe, Hogan Lovells’ cross-practice team of cybersecurity lawyers has launched Ready, Set, Respond, a new set of online cybersecurity resources.
On September 12, New York Governor Andrew Cuomo broke new ground in proposing a state-level regulation that would require banks, insurance companies, and other financial services entities regulated by the New York Department of Financial Services to establish formal cybersecurity programs.
The Federal Trade Commission recently presented an analysis of how its approach to data security over the past two decades compares with the Framework for Improving Critical Infrastructure Cybersecurity issued in 2014 by the National Institute of Standards and Technology and strongly endorsed by the White House. The FTC first explains how this question has a faulty premise, as the Framework is not designed to be a compliance checklist. Instead, in this new blog post, the FTC outlines how the FTC’s enforcement actions comport with the Framework’s five Core functions—Identify, Protect, Detect, Respond, and Recover—and emphasizes how both the Framework and the FTC’s approach highlight risk assessment and management, along with implementation of reasonable security measures, as the touchstones of any data security compliance program.
The Department of Health and Human Services Office for Civil Rights is taking an aggressive stand on HIPAA enforcement and targeting violations related to security risk assessments and business associate agreements. Three resolution agreements posted in the last month make clear that the agency expects entities subject to HIPAA to take appropriate steps to secure their data, regardless of the size or type of the entity.
The Department of Health and Human Services released guidance on July 11, 2016, intended to help the healthcare industry prepare for and respond to ransomware attacks. Specifically, this guidance clarifies: (1) that a ransomware attack is considered a “security incident” under HIPAA, and (2) that a ransomware attack will typically be considered a “breach” by HHS unless entities are able to demonstrate that there is a “low probability of compromise.” The guidance also clarifies that covered entities must implement the same risk assessment processes as they would with other types of cyber threats, including malware. At a time when ransomware attacks are on the rise, this guidance heightens the potential regulatory enforcement consequences of these events.