Since September, the Mintz Levin Privacy Webinar Series has focused on the upcoming EU General Data Protection Regulation (GDPR) to help businesses understand the reach and scope of the GDPR and prepare for the potentially game-changing privacy regulation. The GDPR will affect how US businesses handle and process personal data originating in the EU and may require changes to business process.

Access, Correction and Erasure: How to Minimize the Burden (2/16/2017)

This webinar, the sixth and final in our EU General Data Protection Regulation Series, considers companies’ obligations to give individuals access to their data and to correct or erase it.  We explore the new data portability requirements. The webinar concludes with some suggestions on how to make these requirements less burdensome.

Transferring Data from the EU (1/12/2017)

This webinar, the fifth in our EU General Data Protection Regulation Series, explores the ways in which the Regulation creates new avenues for data transfers, and narrows others. In particular, we consider sector-specific Commission decisions, privacy seals/certifications, the exception for non-repetitive, limited transfers, and the outlook for BCRs and Model Clauses.

Data Protection Officers: Do You Need One? (12/15/2016)

This webinar, the fourth in our EU General Data Protection Regulation Series, examines the criteria that dictate whether or not your organization needs to appoint a Data Protection Officer. We discuss the role of the DPO, the significance of the “independence” requirement, and the qualifications required to hold the position.

Good-bye to the Cure-all: The New Rules on Consent (11/10/2016)

This webinar, the third in our EU General Data Protection Regulation Series, reviews the new restrictions on relying on user consent to data processing and data transfers. In addition to the general “imbalance of power” problem, we consider the implications of the Directive on unfair terms in consumer contracts and changes that may need to be made to terms of use and privacy policies when dealing with consumers.

Accountability, Data Security, Data Impact Assessments and Breach Notification Requirements (10/13/2016)

This webinar, the second in our EU General Data Protection Regulation Series, focuses on the data security and accountability requirements of the Regulation, including reviews and documentation of internal policies and procedures and data impact assessments. We also explore the breach notification requirements and actions that companies can take in advance to mitigate the need for breach notification.

One-Stop Shopping Mall? The New Regulatory Structure (9/14/2016)

This webinar, the first in our EU General Data Protection Regulation Series, explains the powers and role of the new European Data Protection Board, how a “lead supervisory authority” will be designated for each controller, and how the lead supervisory authority will interact with other interested supervisory authorities. We also look at the complaint process from the point of view of the individual who is claiming a violation, and explore the likely role that will be played by public interest organizations bringing group complaints.

“Don’t make promises that you don’t intend to keep” is an admonishment received by every child and delivered by every parent. This pithy maxim is equally applicable to consent orders entered into with regulatory authorities. Indeed, Upromise’s failure to abide by it is costing the company $500,000 in the form of a civil penalty from the Federal Trade Commission (FTC). Continue Reading More Broken Privacy Promises from Upromise: Key Takeaways From Upromise’s Latest Settlement with the FTC

 

We are well into March Madness … and Happy St. Patrick’s Day!

You may have already had your bracket busted by now…..but you should have Mintz Levin’s Third Annual Employment Law Summit on your schedule and the panel on Cybersecurity and Employee Data Breaches may help you avoid a security incident/personal data buster.

Teamwork is a key to advancing in the Big Dance and HR and IT could make a powerful team in fighting cybersecurity risks in your company. Just because cybersecurity threats affect cyberspace does not take the human element out of the prevention/mitigation loop.   And the Luck of the Irish has nothing to do with it……

Even though IT plays the role of the center in managing the game flow with respect to the company’s data security, the HR department should not sit on the bench. HR has the point guard skills necessary to mitigate important insider threats and properly train the rest of the team to play it safe.

Businesses are a treasure trove of information about people – customers, employees, business contacts. Loss or theft of any of these can cost a company both in cold cash and in reputation. We’ll take a look at the crazy-quilt of laws and discuss how HR managers and counsel can make the important connections between HR professionals and security professionals and keep your company in the game.

We hope you will join us in New York on April 6th as our panel ventures into cyberspace. Please remember to register here, as you won’t want to miss this important event.

Recently, a Google researcher discovered a serious flaw with the content delivery network (CDN) provided by CloudFlare.  This vulnerability has now become known as Cloudbleed, in a nod to the earlier Heartbleed SSL vulnerability.  The Cloudfare CDN allows users of the service to have their content stored at Cloudflare Network Points of Presence (PoPs) rather than a single origin server.  This reduces the amount of time it takes to serve websites in disparate geographical locations.  The service is popular, with Cloudflare having over five million customers, including Uber, OkCupid, and FitBit.

The Cloudbleed vulnerability involved a situation where sensitive data was inadvertently displayed or “leaked” when visiting a website that used certain Cloudflare functionality.  Cloudflare has estimated that the leak was executed 1,242,071 times between September 22nd and February 18th.  Search engines such as Bing, Yahoo, Baidu and Google also cached the leaked data.  The researcher who discovered the leak found all sorts of sensitive data being leaked, including private messages from major dating sites, full messages from a well-known chat service, online password manager data and hotel bookings, passwords and keys.

The Clouldbleed vulnerability is a reminder that companies that leverage external vendors to receive, process, store, or transfer sensitive data must find ways to reduce the risk created by the relationship to an acceptable level.  We have three steps that companies should consider taking to accomplish this.  

First, companies should understand how external vendors will interact with their data flows.  Companies that leverage Cloudflare services have given it access to sensitive data, including private messages, passwords, and keys.  The risks of providing this data to external vendors cannot be understood if the company itself does not understand at a senior organizational level what is being transferred.  Ask questions about the proposed procurement of vendor-provided services to understand what interaction the service/vendor has with your data.

Second, companies should make sure that they have permission to transfer user data to third parties, based on its existing terms of use and privacy policy documents that the relevant data subjects have agreed to.  Generally speaking, in most cases, the company collecting the data from the data subject will remain responsible for any issues that occur downstream, including loss or breach of the data through a third party vendor relationship.

Third, companies should carefully negotiate their vendor contracts in light of their own risk tolerance.  The contract should contemplate the data at issue, including by type and category, such as private messages and passwords, and should to the extent feasible transfer all risk of a breach on the vendor side to the vendor.  In many cases, it will be appropriate to require that the vendor carry insurance to satisfy its obligations under the agreement, including data breach remediation should it become an issue.

Companies with any questions regarding this process should not hesitate to contact the Privacy and Security team at Mintz Levin.

 

Counsel for a class of card-issuing banks filed a settlement agreement on March 8 proposing a class settlement to resolve claims arising from the 2014 theft of payment card data from Home Depot point-of-sale terminals.  The contemplated $27.25 million class settlement follows in the wake of over $140 million already paid by Home Depot to settle issuer bank claims through card association settlement processes.  The revelation that Home Depot was able to use private means to settle the vast majority of the bank claims outside of the class action raises significant questions about whether the proposed settlement class satisfies the requirement under Rule 23(b)(3) that a class action provide a superior means to resolve class members’ claims. Continue Reading Does Class Settlement Of Bank Claims In Home Depot Data Breach Litigation Pass The “Superiority” Test?

The European Union’s General Data Protection Regulation (the “GDPR”) goes into effect in a little over fourteen months and from a quick glance at our bullet points analysis you can see there is a lot to consider.  One crucial aspect you need to be thinking about now is how your organization collects and manages consents from individuals for processing their personal information.  Without a strong understanding of what valid consent means under the GDPR, before long you may find yourself holding valuable data that you are not able to process as you need to for your business.

To this end, the Information Commissioner’s Office (the “ICO”), the data protection authority for the UK, last week published a consultation draft of its GDPR consent guidance.  This is a practical resource meant to help organizations get to grips with the GDPR’s consent requirements and align their internal procedures and processing activities, as well as their customer-facing websites, marketing materials, and product infrastructure.   Although the UK ICO cannot speak for the other EU data protection authorities, they have a good track record of producing practical guidance set out in accessible language, which makes the ICO website a good first stop for US companies seeking to understand their obligations in the EU.  We encourage you to review this helpful resource and provide feedback to the ICO using their comment form by March 31.  We also offer this high-level snapshot of a few key points: Continue Reading It’s Not Too Early! ICO Guidance Regarding Consent Under GDPR

 

Last week, Snap Inc. (“Snap” or the “Company”) – the parent company of the wildly popular app Snapchat (“Snapchat” or the “App”) – became a publicly traded company on the New York Stock Exchange in the biggest tech IPO since Alibaba in 2014.  Priced at $17 per share, the Snap stock opened at $24 per share on Thursday morning and closed at $24.48 per share, bringing the Company’s market capitalization to approximately $28 billion. In today’s post, we’re taking a closer look at Snap’s S-1 filing (“Snap S-1”) with the U.S. Securities and Exchange Commission (SEC) with a particular focus on the Company’s disclosures of risk factors associated with cybersecurity and privacy risks.  Continue Reading A Deep Dive into Privacy/Security Disclosures in Snap’s S-1

In an effort to combat the growing prevalence of large-scale corporate cyberattacks, the New York Department of Financial Services (“NYDFS”) is rolling out a revamped cybersecurity regulation for financial services companies to take effect TODAY (March 1, 2017). This ambitious regulation is broadly drafted and carries a heavy compliance burden intended to protect consumers and ensure the safety and soundness of New York State’s financial services industry.   Even if you are not directly in banking or insurance, read on to see how these regulations may affect your company. Continue Reading It’s March 1: The Cybersecurity Goal Post Has Been Moved

Five Things You (and Your M&A Diligence Team) Should Know

Recently it was announced that Verizon would pay $350 million less than it had been prepared to pay previously for Yahoo as a result of data breaches that affected over 1.5 billion users, pending Yahoo shareholder approval. Verizon Chief Executive Lowell McAdam led the negotiations for the price reduction.  Yahoo took two years, until September of 2016, to disclose a 2014 data breach that Yahoo has said affected at least 500 million users, while Verizon Communications was in the process of acquiring Yahoo.  In December of 2016, Yahoo further disclosed that it had recently discovered a breach of around 1 billion Yahoo user accounts that likely took place in 2013.

While some may be thinking that the $350 million price reduction has effectively settled the matter, unfortunately, this is far from the case. These data breaches will likely continue to cost both Verizon and Yahoo for years to come.  Merger and acquisition events that are complicated by pre-existing data breaches will likely face at least four categories of on-going liabilities.  The cost of each of these events will be difficult to estimate during the deal process, even if the breach event is disclosed during initial diligence.

Continue Reading Data Breaches Will Cost Yahoo and Verizon Long After Sale

Last week, the HHS Office for Civil Rights (OCR) disclosed a $5.5 million settlement with Memorial Healthcare Systems (MHS) for HIPAA violations affecting the protected health information (PHI) of 115,143 individuals. The Resolution Agreement, which can be found here, also contains a detailed corrective action plan (CAP).

The Florida-based health system reported to OCR that the PHI had been impermissibly accessed by MHS employees and impermissibly disclosed to affiliated physician office staff. The PHI consisted of names, dates of birth, and social security numbers.

According to OCR, the login credentials of a former employee of an affiliated physician’s office had been used to access the ePHI maintained by MHS on a daily basis without detection from April 2011 to April 2012, affecting 80,000 individuals. Although it had workforce access policies and procedures in place, MHS failed to implement procedures with respect to reviewing, modifying and/or terminating users’ right of access, as required by HIPAA. The health system also failed to regularly review records of information system activity for its applications that maintain electronic PHI and which are accessed by workforce users and users at affiliated physician practices. To make matters worse, the health system failed to review the audit information despite having identified this risk on several risk analyses conducted by MHS from 2007 to 2012.

“Access to ePHI must be provided only to authorized users, including affiliated physician office staff” said Robinsue Frohboese, Acting Director, HHS Office for Civil Rights. “Further, organizations must implement audit controls and review audit logs regularly. As this case shows, a lack of access controls and regular review of audit logs helps hackers or malevolent insiders to cover their electronic tracks, making it difficult for covered entities and business associates to not only recover from breaches, but to prevent them before they happen.”

While hacking incidents typically garner more media coverage, this case highlights the increasing threat posed by those inside a HIPAA-regulated organization. According to a Protenus report, nearly 60% of the breaches that occurred this past January involved insiders. Organizations would be well-served by reviewing recent OCR guidance on the importance of audit controls.

Originally posted in Mintz Levin’s Health Law Policy Matters