On October 10, California Attorney General Xavier Becerra released proposed regulations to implement certain provisions of the California Consumer Privacy Act. The proposed regulations would create many new requirements. They provide clarifications to businesses and consumers in five key CCPA areas as summarized within this post.
Since the California Consumer Privacy Act’s hasty passage in June last year and minor changes last September, the CCPA has vexed businesses working on compliance. Among many practical challenges, the CCPA often includes inconsistent or ambiguous requirements that have been an obstacle to implementing clear compliance strategies. Businesses, some academics, and various legislators thought that further amendments were needed to make the CCPA work effectively and accomplish its objectives. Over the past several months, the California legislature debated several amendments, eventually passing five bills, which now sit on the Governor’s desk. These bills collectively do not provide the sweeping changes sought by businesses. Instead amendments make minor tweaks and postpone for a year some of the more challenging requirements.
The Federal Trade Commission is requesting public comments on the Children’s Online Privacy Protection Rule. In particular, the FTC is seeking feedback on the effectiveness of its 2013 amendments to the COPPA Rule and on whether additional changes are needed. Comments are due October 23, 2019. The FTC will also be hosting a COPPA workshop on October 7, 2019.
The U.S. Chamber of Commerce Institute for Legal Reform has published “Ill-Suited: Private Rights of Action and Privacy Claims,” a white paper authored by Hogan Lovells’ Mark W. Brennan, Alicia Paller, Adam Cooke, and Joseph Cavanaugh explaining why private litigation is a poor enforcement tool for privacy laws. As detailed in the paper, when it comes to privacy interests, “harms” are largely inchoate and intangible, and the wrongdoers are often unknown or unidentifiable. Even where class members may have suffered a concrete injury, the data indicates that they are unlikely to receive material compensatory or injunctive relief through private litigation. Meanwhile, plaintiffs’ counsel often walks away with millions of dollars, court dockets are unduly cluttered, and companies are forced to expend resources on baseless litigation.
On June 20, 2019, the Supreme Court released its long-awaited decision in PDR v. Carlton & Harris Chiropractic. The Court was expected to provide greater clarity about the extent to which litigants can challenge the Federal Communications Commission’s Telephone Consumer Protection Act interpretations in private litigation. Instead of deciding that issue, however, the Court vacated the Fourth Circuit’s ruling and remanded the case for further development. How the Fourth Circuit rules on remand may ultimately provide more insight on how much deference is owed to the FCC’s TCPA interpretations.
This year’s TMT Horizons includes 22 short articles—including five articles focusing on data protection issues—contributed by our lawyers around the globe, focusing on the trends and issues our clients are facing. These articles reflect the fact that the intersection between the inherent dynamism of the sector and the increasing challenges to unchecked globalization will dominate the next chapter for TMT.
Nevada has a new privacy law. On May 29, Nevada Governor Steve Sisolak signed Senate Bill 220 (SB-220) into law, making Nevada the first state to join California in granting consumers the right to opt out of the sale of their personal information. The act, which amends an existing online privacy notice law, is significantly narrower than the California Consumer Privacy Act (CCPA).
Following the one-year anniversary of the coming into effect of the GDPR, Hogan Lovells’ Privacy and Cybersecurity practice has prepared summaries of key GDPR-related developments of the past 12 months. The summaries cover regulatory guidance, enforcement actions, court proceedings, and various reports and materials.
While eyes focus on the privacy legislative debate now underway in the United States, the development of a new Privacy Framework by the influential National Institute for Standards and Technology (“NIST”) is also worthy of attention. On May 13-14, 2019, NIST hosted its second workshop on the recently released discussion draft of its “Privacy Framework: An Enterprise Risk Management Tool” (“Privacy Framework”). The workshop brought together stakeholders to provide feedback on the draft and suggest areas for revision. NIST had previously hosted a workshop in October 2018 to kick off the development of the Privacy Framework and had presented its thinking at other fora such as the Brookings Institution.
On May 1, 2019, the National Institute of Standards and Technology (NIST) announced a Request for Information (RFI) in the Federal Register regarding ongoing efforts to develop technical standards for artificial intelligence (AI) technologies and the identification of priority areas for federal involvement in AI standards-related activities. Responses to the RFI are due by May 31, 2019.
A number of legislative proposals seeking to amend the California Consumer Privacy Act are moving forward following an April 23 hearing before the California Assembly’s Committee on Privacy and Consumer Protection in which the bills were approved. The bills will now advance to the Assembly’s Appropriations Committee before being voted on by the full Assembly and potentially advancing to the California Senate for consideration.
The consumer industry is evolving at lightning speed, and the way consumer businesses operate is shifting. In this year’s edition of Consumer Horizons, the Hogan Lovells global Consumer team identifies trends that will impact food and beverages companies, fashion and luxury goods producers, retailers, consumer electronics manufacturers, and other consumer businesses throughout 2019. Members of Hogan Lovells’ Privacy and Cybersecurity team contributed to Consumer Horizons 2019 to highlight some key privacy and data protection issues that businesses in the consumer industry should take note of.
The California legislature is considering significant amendments to the California Consumer Privacy Act ahead of the law’s January 1, 2020 implementation date. Of particular note has been the potential for CCPA amendments to expand the private right of action beyond violations of businesses’ duty to implement and maintain reasonable security procedures to instead cover violations of any CCPA rights.
In June of 2018, California passed the California Consumer Privacy Act, which seeks to give consumers additional safeguards regarding their personal information. The CCPA will become effective January of 2020 and may impact companies in the education sector, including the larger education technology companies. While the CCPA does not apply to nonprofit educational institutions, it may apply to certain for-profit educational institutions, third-party service providers, and others in the education space. If an educational entity meets the threshold requirements below or it processes information on behalf of such an entity, it should prepare for CCPA implementation by January 2020.
On February 27, 2019, the Federal Trade Commission (“FTC”) announced that it settled with the operators of a video social networking app for a record civil penalty of $5.7 million under the Children’s Online Privacy Protection Act (“COPPA”). This FTC COPPA action was notable not just for the size of the penalty, but also because of the joint statement by the two Democratic Commissioners, Rebecca Slaughter and Rohit Chopra, that future FTC enforcement should seek to hold corporate officers and directors accountable for violations of consumer protection law.
A bill introduced to amend the California Consumer Privacy Act of 2018 (“CCPA” or the “Act”) could greatly expand the risks to businesses that collect the personal information of California consumers. Senate Bill 561 (“SB 561”) would expand the CCPA’s private right of action to any violation of a consumer’s CCPA rights, remove the existing 30-day cure period, and eliminate businesses’ right to consult the AG’s office regarding compliance. SB 561 would not impact the CCPA’s current effective date of January 1, 2020.
Much of the focus on the California Consumer Protection Act (“CCPA”) has been on the new rights that it affords California consumers, including the rights to access, delete, and opt out of the sale of their personal information. But arguably the greatest risk to covered businesses involves data security, as the CCPA creates for the first time a private right of action with substantial statutory penalties for breaches involving California consumers’ personal information. This installment of the Hogan Lovells’ CCPA series explains the CCPA’s security requirement and consequences for non-compliance, and describes security controls that most organizations can implement to mitigate this risk.
The California Department of Justice has announced a March 8, 2019 deadline for submitting written pre-rulemaking comments on the California Consumer Privacy Act (CCPA). The March 8 deadline is an extension from the previously set end-of-February deadline. Pursuant to section 1798.185(a) of the CCPA, the California Attorney General (AG) is obligated to solicit broad public participation and adopt regulations to further the purposes of the CCPA. The CCPA sets out seven specific areas for AG rulemaking.
The Illinois Supreme Court ruled on January 25 in Rosenbach v. Six Flags Entertainment Corp. that a plaintiff can allege a violation of rights under the state’s Biometric Information Protection Act (BIPA) even without alleging “injury or damage beyond infringement of the rights afforded them under the law.” The court decided the issue solely as a matter of statutory construction under Illinois law. This decision will have a major impact on a number of pending BIPA lawsuits and is likely to result in increased BIPA litigation given the availability of statutory damages and attorneys’ fees under the law.
Hogan Lovells has published Demystifying the U.S. CLOUD Act, a detailed analysis of the impact of the Clarifying Lawful Overseas Use of Data Act (CLOUD Act) on non-U.S. businesses and individuals who use cloud storage solutions.
The California Attorney General Xavier Becerra and the California Department of Justice will hold six public forums about the California Consumer Privacy Act (CCPA) that are open to all members of the public. These public forums are being held pursuant to Section 1798.185 of the CCPA, which requires the Attorney General to “solicit broad public participation and adopt regulations to further the purposes” of the CCPA.
One of the most controversial elements of the California Consumer Privacy Act (“CCPA”) is the establishment of an “anti-discrimination” right – businesses may not “discriminate” against consumers for exercising certain rights under the CCPA, and they will need to assess whether and how they can require consumers to accept certain data practices as a condition of service. Compliance would be challenging even if the provision were articulated clearly, but as we have discussed in this blog series, the accelerated drafting process and passage of the CCPA earlier this year left little time for public comment and responsive amendments. As a result, the law includes a series of ambiguities that complicate compliance, and nowhere is that more apparent than in the anti-discrimination provision.
This entry in Hogan Lovells’ ongoing series on the CCPA focuses on the law’s anti-discrimination clause, its ambiguities and potentially contradictory provisions, and impact on businesses.
On December 4, 2018, the New York Attorney General (NYAG) announced that Oath Inc., which was known until June 2017 as AOL Inc. (AOL), has agreed to pay a $4.95 million civil penalty to settle allegations that AOL’s ad exchange practices violated the Children’s Online Privacy Protection Act (COPPA). The $4.95 million penalty is the largest ever assessed by any regulator in a COPPA enforcement matter.
The California Consumer Privacy Act of 2018 (“CCPA”) exempts information that is collected, processed, sold, or disclosed pursuant to the federal Gramm-Leach-Bliley Act (“GLBA”), and its implementing regulations (the “Privacy Rule”), or the California Financial Information Privacy Act (“CFIPA”). It does not exempt financial institutions altogether from its requirements where a financial information is processing information not subject to these regimes. In such situations, a financial institution must comply with a wide array of CCPA obligations, including requirements to make certain disclosures to consumers and to provide certain rights to consumers, such as the right to stop “sales” of their personal information and the right to access data that a business has collected about them. Determining whether information a financial institution processes is covered by the exemption or not can be challenging and is something that financial institutions will need to analyze for their operations.
This blog post provides background on the scope of the exemption and an overview of key considerations for financial institutions developing CCPA compliance programs.