Privacy & Information Security Law Blog

Recently, the National Information Security Standardization Technical Committee of China published a draft document entitled Information Security Technology – Guidelines for De-Identifying Personal Information (the “Draft Guidelines”). The Draft Guidelines are open for comment from the general public until October 9, 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.

On August 25, 2017, the FTC published the sixth blog post in its “Stick with Security” series. As we 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: Segment your network and monitor who’s trying to get in and out, illustrates the benefits of segmenting networks and monitoring the size and frequency of data transfers.

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 21, 2017, the United States Court of Appeals for the Eighth Circuit affirmed the dismissal of a putative class action arising from the Scottrade data breach. Notably, however, the Eighth Circuit did not agree with the trial court’s ruling that the plaintiff lacked Article III standing, instead dismissing the case with prejudice for failure to state a claim. 

On August 22, 2017, the National Infrastructure Advisory Council (“NIAC”) issued a report entitled Securing Cyber Assets: Addressing Urgent Cyber Threats to Critical Infrastructure (“NIAC Report”). NIAC was first created in 2001 shortly after the 9/11 attacks and advises the President on information security systems in banking, finance, transportation, energy, manufacturing and emergency government services. The NIAC Report notes that sophisticated and readily available malicious cyber tools and exploits have lowered the barrier to cost and increased the potential for successful cyber attacks. According to the NIAC Report, “[t]here is a narrow and fleeting window of opportunity before a watershed, 9/11-level cyber attack to organize effectively and take bold action.”

On August 24, 2017, APEC issued a statement on the renewed talks between APEC and the EU on creating interoperability between the APEC Cross-Border Privacy Rules (“CBPR”) and the EU data transfer mechanisms.

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.

On August 18, 2017, the FTC published the fifth blog post in its “Stick with Security” series. As we 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: Store sensitive personal information securely and protect it during transmission, outlines steps businesses can take to secure sensitive data, including when it is in transit.

Recently, the fourth edition of the book, The International Comparative Legal Guide to: Data Protection 2017, was published by the Global Legal Group. Hunton & Williams’ Global Privacy and Cybersecurity lawyers prepared several chapters in the guide, including the opening chapter on “All Change for Data Protection: The European Data Protection Regulation,” co-authored by London partner Bridget Treacy and associate Anita Bapat. Several other global privacy and cybersecurity team members also prepared chapters in the guide, including David Dumont (Belgium), Claire François (France), Judy Li (China), Manuel E. Maisog (China), Wim Nauwelaerts (Belgium), Anna Pateraki (Germany), Aaron P. Simpson (United States), Adam Smith (United Kingdom) and Jenna Rode (United States).

As reported in BNA Privacy & Security Law Report, on August 9, 2017, the Russian privacy regulator, Roskomnadzor, expanded its list of nations that provide sufficient privacy protections to allow transfers of personal data from Russia. Russian law allows data transfers to countries that are signatories to the Council of Europe’s Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data (the “Convention”), and to certain other non-signatory countries deemed by Roskomnadzor to have adequate privacy protections based on relevant data protection laws, privacy regulators and penalties for privacy law violations.

In 2017, over $1.3 billion has been raised by start-ups through Initial Coin Offerings (“ICOs”), a relatively new form of financing technique in which a company (typically one operating in the digital currency space) seeking to raise seed money makes a “token” available for sale, and the token gives the purchaser some future right in the business or other benefit. Amidst much anticipation, on July 25, 2017, the Securities and Exchange Commission (“SEC”) released a Report of Investigation (“Report”) under Section 21(a) of the Securities Exchange Act of 1934 ...

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.

On August 11, 2017, the FTC published the fourth blog post in its “Stick with Security” series. As we 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: Require secure passwords and authentication, examines five effective security measures companies can take to safeguard their computer networks.

On August 1, 2017, a unanimous three-judge panel for the D.C. Circuit reversed the dismissal of a putative data breach class action against health insurer CareFirst, Attias v. CareFirst, Inc., No. 16-7108, slip op. (D.C. Cir. Aug. 1, 2017), finding the risk of future injury was not too speculative to establish injury in fact under Article III. 

On August 9, 2017, Nationwide Mutual Insurance Co. (“Nationwide”) agreed to a $5.5 million settlement with attorneys general from 32 states in connection with a 2012 data breach that exposed the personal information of over 1.2 million individuals. 

On August 4, 2017, the FTC published the third blog post in its “Stick with Security” series. As we 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: Control access to data sensibly,” details key security measures businesses can take to limit unauthorized access to data in their possession.

In a video roundtable series, Hunton & Williams LLP partners Lisa J. Sotto and Steven M. Haas and special counsel Allen C. Goolsby, along with Stroz Friedberg’s co-president Eric M. Friedberg and Lee Pacchia of Mimesis Law, discuss the special consideration that should be given to privacy and cybersecurity risks in corporate transactions.

On August 7, 2017, the UK Government’s Department for Culture, Media and Sport published a Statement of Intent setting out the planned reforms to be included in the forthcoming Data Protection Bill, which we previously reported is expected to be laid before the UK Parliament in early September.

Media sources have reported that the UK Department for Culture, Media & Sport has confirmed its plans to present its Data Protection Bill to Parliament when MPs return to Parliament in early September. The Bill follows commitments made in the Queen’s Speech in June, and will effectively copy the EU General Data Protection Regulation (“GDPR”) into the UK statute book. The Bill’s primary aim is to ensure that the UK retains the same data protection laws as the rest of the EU once it leaves the EU, which is likely to be in March 2019.

On July 31, 2017, the Federal Trade Commission announced that it has approved modifications to TRUSTe’s safe harbor program under the Children’s Online Privacy Protection Rule (the “COPPA Rule”).

On July 28, 2017, the FTC published the second blog post in its “Stick with Security” series. As we 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 “Start with security – and stick with it,” looks at key security principles that apply to all businesses regardless of their size or the types of data they handle.

With less than one year to go before the EU General Data Protection Regulation (“GDPR”) comes into force, the Centre for Information Policy Leadership (“CIPL”) at Hunton & Williams and AvePoint have launched the second annual GDPR Organizational Readiness Survey. Last year, over 220 predominantly multinational organizations participated in the study which focused on key areas of impact and change under the GDPR such as consent, legitimate interest, data portability, profiling, DPIAs, DPOs, data transfers and privacy management programs. This year’s study revisits these important areas of impact and further considers additional topics. 

On July 27, 2017, Lisa Sotto, chair of Hunton & Williams LLP’s Global Privacy and Cybersecurity practice, appeared live on Washington, DC’s Fox TV to discuss the ID theft issue involving former Dallas Cowboys player Lucky Whitehead, and to warn against the risk of identity theft. Sotto cautions that identity thieves who are determined and looking to do harm “will find [personal data].” According to Sotto, consumers “leave footprints everywhere online.” To mitigate risk of identity theft, Sotto advises against freely providing a Social Security number, shredding ...

On July 18, 2017, the European Union Committee of the UK’s House of Lords published its paper, Brexit: the EU data protection package (the “Paper”). The Paper urges the UK government to make good on its stated aim of maintaining unhindered and uninterrupted data flows between the UK and EU after Brexit, and examines the options available to ensure that this occurs. It warns that data flows have become so valuable to cross-border business that failure to establish an adequate framework could hamper EU-UK trade.