The FTC has approved the first-ever petition to reopen and modify a privacy-related consent order. The petition, filed by Sears Holdings Management Corporation, sought to amend the terms of Sears’ 2009 consent order, which settled allegations that Sears did not adequately disclose the extent to which desktop software it distributed collected information from consumers. After reviewing Sears’ petition and public comments, the Commission agreed with Sears that, as a result of changes in the mobile application marketplace, the Order’s requirements as applied to Sears’ mobile apps were “burdensome and counterproductive, both for consumers and Sears.” Hogan Lovells Partner Michelle Kisloff, Senior Associate Paul Otto, and Associate Joe Vladeck represented Sears in its petition.
Nothing challenges the effectiveness of data protection law like technological innovation. You think you have cracked a technology neutral framework and then along comes the next evolutionary step in the chain to rock the boat. It happened with the cloud. It happened with social media, with mobile, with online behavioural targeting and with the Internet of Things. And from the combination of all of that, artificial intelligence is emerging as the new testing ground. 21st century artificial intelligence relies on machine learning, and machine learning relies on…? You guessed it: Data. Artificial intelligence is essentially about problem solving and for that we need data, as much data as possible. Against this background, data privacy and cybersecurity legal frameworks around the world are attempting to shape the use of that data in a way that achieves the best of all worlds: progress and protection for individuals. Is that realistically achievable?
In the same week that the automotive industry gathers in Washington, D.C. for the 2018 Washington Auto Show, a cross-section of automotive stakeholders, government officials, and consumer and privacy advocates came together at Hogan Lovells’ Washington office to discuss privacy issues facing connected vehicles. The half-day conference, co-hosted by Hogan Lovells and the Future of Privacy Forum, convened on January 23, with the theme of “Privacy and the Connected Vehicle: Navigating the Road Ahead.” Panels focused on the privacy landscape surrounding automobiles and connectivity generally, regulatory developments and areas of government interest, and the effect of emerging technologies on business models and privacy practices in the automotive space. With lively discussion throughout and a wide array of perspectives, several key themes emerged.
Growing evidence suggests that existing Telephone Consumer Protection Act compliance challenges, and the current TCPA litigation landscape, are increasingly a threat to many U.S. companies – particularly small businesses that have fewer resources and could face financial ruin if targeted by a class action lawsuit. To help address this issue and support the U.S. economy, Congress and the Federal Communications Commission should revise the current TCPA framework and facilitate reasonable, practical compliance approaches for companies attempting in good faith to communicate with customers.
Last week, the U.S. District Court for the Northern District of California dismissed three of six claims the Federal Trade Commission asserted against D-Link Systems related to its sale of routers and IP cameras and related software and services. The decision has implications for the pleading standards courts use to evaluate such claims at the motion to dismiss stage and for the FTC’s assertion of unfairness claims based on alleged likelihood of substantial consumer harm.
The six-year fight over the type of harm a plaintiff must allege to satisfy the “injury in fact” requirement for lawsuits alleging false reporting of credit information took its latest turn this week. On Tuesday, August 15, 2017, the U.S. Court of Appeals for the Ninth Circuit, on remand from the United States Supreme Court, issued its opinion- hyperlink to the opinion] in Spokeo, Inc. v. Robins, a highly-watched case challenging whether a plaintiff can satisfy Article III standing based solely on a technical violation of the Fair Credit Reporting Act. Plaintiff Thomas Robins brought a putative class action for willful violations of the FCRA against Spokeo, Inc., a company that generates profiles about people based on publicly available data. Among other things, Robins averred that Spokeo published an allegedly inaccurate profile about him on its website and therefore harmed his employment prospects at a time when he was out of work. The Ninth Circuit’s three-judge panel held that the publication of materially inaccurate information about Robins sufficed as concrete injury for purposes of Article III standing, even without specific allegations of tangible harm from that publication.
The Federal Trade Commission released an updated guidance document for complying with the Children’s Online Privacy Protection Act. The revised guidance, released on June 21, 2017, explicitly identifies connected toys and other Internet of Things devices as being covered under COPPA and adds clarity to web operators’ responsibility for the activities of third parties, such as ad networks and plug-ins, that collect personal information protected under COPPA. It also includes recently approved methods for obtaining verifiable parental consent.
In May, a Florida state court dismissed a plaintiff’s claim that the terms of service for popular mobile game Pokémon GO violated Florida’s Deceptive and Unfair Trade Practices Act. The case illustrates how establishing injury continues to be a key hurdle for plaintiffs in litigation involving online services, and shows that a well-framed choice of law provision can help protect providers of online services.
Earlier this month, the Government Accountability Office released a technology assessment of the Internet of Things for Congressional members of the IoT Caucus. The GAO report offers an introduction to IoT; reviews the many uses and their associated benefits that connected devices may bring to consumers, industry, and the public sector; and highlights the potential implications of the use of IoT, including information security challenges, privacy challenges, and government oversight. The report also identifies areas of apparent consensus among experts regarding the challenges posed by IoT, though the appropriate responses are disputed. Accordingly, the report may act as a foundation for future policymaker discussions about regulating IoT.
Join us for a discussion of hot topics in Federal Trade Commission (FTC) and state consumer protection enforcement. Partners Bret Cohen, Meghan Rissmiller, and Steven Steinborn will cover recent developments and enforcement trends in data privacy/security, advertising/endorsements, and claim substantiation in practice before the FTC and state authorities.
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.
On 27 April 2017 the German Parliament passed an entirely new Federal Data Protection Act. The new BDSG replaces the old BDSG, which has been in force for the last 40 years. The new BDSG shall adapt the German law to the provisions of the EU General Data Protection Regulation. The new BDSG will now form the basis for the adaption of German acts to the GDPR. Further acts concerning special processing situations like social security data protection are likely to follow.
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 previously reported, on Thursday, March 9th, the Federal Trade Commission (FTC) hosted a forum on the consumer implications of recent developments in artificial intelligence (AI) and blockchain technologies. This is the second of two entries on the March 9th FinTech Forum and focuses on the discussions surrounding blockchain technologies, in which panelists reflected on the nascent stage of the technology, industry representatives expressed confusion over the applicability of current regulation, and regulators expressed a lack of clarity over jurisdictional questions.
On Thursday, March 9th, the Federal Trade Commission (FTC) hosted a forum on the consumer implications of recent developments in artificial intelligence (AI) and blockchain technologies. The FTC acknowledged the benefits of technological developments in AI and blockchain technologies, but stressed that advancements in these technologies must be coupled with an awareness of and active engagement in identifying and minimizing associated risks. This blog post focuses on the AI discussion, which addressed how the values of privacy, autonomy, and fairness are affected by the advent of AI systems as well as how to ensure safety and security in the development and deployment of individual and connected AI systems.
The Federal Communications Commission’s Media Relations Office has released a statement announcing Chairman Pai’s intention to stay a data security rule adopted by the Commission late last year in its Broadband Privacy Order. Absent a stay, the rule is set to go into effect on March 2.
On January 12, 2017, prior to the new administration taking power, the National Telecommunications and Information Administration within the Department of Commerce released a Green Paper on “Fostering the Advancement of the Internet of Things,” which assesses the technological and policy landscape of the Internet of Things. The Green Paper is expansive in scope, reflecting the broad range of issues raised in comments submitted by stakeholders in the private sector, academia, government, and civil society following NTIA’s April 2016 request for public comment. The Green Paper identifies key issues, and provides recommendations and assessments on the potential benefits and risks that IoT portends. The NTIA identifies cybersecurity, privacy and cross-border data flows as the most significant policy issues. It also proposes four principles for future policy engagement in which the Department would play a central role in creating conditions that would foster IoT growth. The agency also requested additional comments on the issues raised by the Green Paper.
On January 23, 2017, fourteen months after hosting a workshop to review the multi-device, multi-platform digital landscape, the FTC issued a staff report on cross-device tracking summarizing the FTC’s 2015 workshop and providing a set of related recommendations. In this post, we look at the FTC’s previous advice on cross-device tracking, key takeaways from the FTC report, and how the guidance aligns with the Digital Advertising Alliance’s (DAA) self-regulatory principles for cross-device tracking, which become enforceable on February 1, 2017.
In June 2015, the Federal Trade Commission held a workshop on The “Sharing” Economy: Issues Facing Platforms, Participants, and Regulators. The Commission also solicited public comments on the topic, receiving more than 2,000 comments in response. On 17 November, the Commission issued a report summarizing the issues explored in the workshop and the public comments. The report emphasized that the workshop (and its ensuing summary) was not intended “as a precursor to law enforcement” but “an opportunity to learn more” about this rapidly evolving business model and to aid “the Commission, as well as regulators, consumer groups, platforms, participants using the platforms, incumbent firms, and others” to address the unique issues raised by sharing economy platforms.
Ever since the first draft of the EU-US Privacy Shield framework was published in early 2016, groups opposed to the idea have indicated their intent to challenge the legality of the framework under EU law. Recently, the privacy advocacy group Digital Rights Ireland made good on that promise. Following the filing of a formal complaint on 15 September asking for an annulment of the framework by the Court of Justice of the European Union, DRI has now made public the details of its complaint.
The Federal Communication Commission’s long-awaited – and much debated – privacy rules for Internet Service Providers have now been adopted. The agency approved the rules by a 3-2 vote along political party lines last Thursday. Several of the FCC requirements are particularly notable for being more restrictive than the Federal Trade Commission’s standards for consumer online privacy. In this post we provide an overview of some of the new FCC rules and highlight key areas where the FCC’s requirements diverge from the FTC’s framework.
Close followers of the cases FTC v. Wyndham Worldwide Corp. and In the Matter of LabMD know that the litigation has prompted increased Congressional oversight of the Federal Trade Commission’s data security enforcement practices. Prior to Wyndham and LabMD, Congressional debates on the FTC’s data security practices centered on whether the Commission should have additional tools to address these issues, including traditional rulemaking authority to create new data security rules, civil penalty authority to fine violators, or authority over the activities of non-profit entities. To the extent Congress questioned the FTC’s enforcement decisions in this pre- Wyndham and LabMD era, those inquires typically focused on the length of time of FTC settlement agreements, while relatively little attention was paid to how the Commission provided notice of its data security standards or how the Commission chose its enforcement targets. Wyndham and LabMD fundamentally shifted this debate.
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.