Oregon’s legislature recently expanded the scope of statutory consumer protections by passing a bill to amend the state’s Unlawful Trade Practices Act (the “Act”). Recently, Oregon’s Governor Kate Brown signed H.B. 2090 into law after near unanimous passage by state lawmakers. The bill is particularly notable because it squarely targets online commerce and imposes liability on businesses for publishing false or misleading online privacy policies. Continue Reading Oregon Ramps up State Consumer Protections in an Era of Deregulation
Michael is an Associate in the firm’s Boston office. His practice focuses on corporate law matters. Michael served as a Project Analyst at Mintz Levin for two years, and worked with the firm’s Corporate & Securities, Health Law, Litigation, and Immigration Practices. During law school, Michael was a Summer Associate at the firm. He was a member of the Pro Bono Board and president of the Health Law Society.
Amid the flurry following former FBI Director James Comey’s firing last week, President Trump marked his 111th day in office on Thursday, May 11th by signing an executive order targeting national cybersecurity.
The long-awaited order is the first step in fulfilling Trump’s promise to address national cybersecurity concerns and it arrives as threats of international hacking and cyberattacks reach an all-time high. It establishes three overarching cybersecurity priorities for the United States: (1) protecting federal networks, (2) reinforcing critical IT infrastructure, and (3) protecting the American public in the online space. The full text of the executive order can be found here.
While the order includes few actionable items, it sets strict deadlines for government agencies to produce risk reports and recommendations for improving their data security practices, signifying an important call to action from the executive branch that places risk management at the forefront.
Modernizing & consolidating federal networks
Consolidating to the cloud will likely be the first major step toward overhauling the government’s administration-wide cybersecurity protocol. In a press briefing last Thursday, White House Homeland Security Advisor Tom Bossert addressed what he views as fractured, agency-specific IT security practices across the government, noting that “[if] we don’t move to shared services, we have 190 agencies all trying to develop their own defenses against advanced collection efforts.”
The move to modernize is an extension of similar efforts from the Obama administration to bolster cybersecurity, an area in which Bossert says the administration made “a lot of progress … [but] not enough.” In line with advancing these efforts, the executive order requires federal agencies to use the Framework for Improving Critical Infrastructure Cybersecurity developed in 2014 by the National Institute of Standards and Technology (“NIST”) to manage cybersecurity risk. Coincidentally, the Framework may be revised soon as the NIST recently closed a comment period on an updated draft that it circulated in January 2017, and per the executive order any successor document to the Framework will become the operative version to be used by government agencies. Separately, Rep. Will Hurd (R-TX), Chairman of the House Information Technology Subcommittee, recently reintroduced H.R. 2227, the “Modernizing Government Technology Act,” which secures more efficient funding for the modernization of federal IT infrastructure and is expected to hit the floor of the House of Representatives within the next couple of weeks.
Reinforcing critical infrastructure
The second prong of the executive order requires the Secretary of Homeland Security to prepare an audit of potential vulnerabilities across the country’s infrastructure systems – from financial and telecommunications systems to utilities including water and electricity. Improving transparency about the security gaps in these systems is crucial, especially as traditional data breaches are losing ground to more devastating Distributed Denial of Service (DDoS) botnet attacks made possible by the growing Internet of Things, or “IoT” (see our blog post here for a discussion of the House’s efforts to address growing security concerns around the IoT).
Protecting the public online
Finally, President Trump’s executive order urges policies aimed at protecting U.S. citizens from domestic and foreign online threats. In addition to increasing the number of cybersecurity experts working with the White House, Bossert suggested that following through on such policies will require greater partnerships between the federal government and the private sector. Indeed, the government currently relies on technology from large, long-time vendors, many of which may not be prepared to grapple with the significant and evolving risks becoming apparent across the data security landscape. Independent technology startups are proving to be the heart of progress in new cybersecurity measures, and the government will need to cultivate solid relationships with these players if it wants to stay ahead in the cybersecurity arena.
President Trump’s executive order has received some criticism for its breadth, but overall has been commended by cybersecurity experts as a balanced step in the right direction. Time will tell whether the resulting policies will make a meaningful difference in the country’s ability to fend off attackers in the ever-evolving online battleground.
After a quiet winter there has been significant activity in state legislatures to enact, strengthen or clarify their data breach notification statutes. The latest happenings are summarized below and we have updated our “Mintz Matrix” to reflect these new and pending laws. Continue Reading States Take Action! New Mexico, Tennessee and Virginia Pass New Data Breach Legislation
We are anxiously waiting to learn the fate of the data breach notification statute recently passed by state lawmakers in New Mexico. The bill remains on the desk of the governor who has until the end of the week to sign the legislation into law. If she does, New Mexico will join 47 other states (along with the District of Columbia, Puerto Rico, and the Virgin Islands) to impose at least some obligations on persons or entities holding personal information in the wake of a security incident. We may need to update the Mintz Matrix soon. Continue Reading Better Late Than Never: New Mexico on the Cusp of Enacting Data Breach Notification Statute
Wearable technology continues to do a full court press on the marketplace and in the process, the step counters of the world and health apps tied to devices capable of tracking real-time biostatistics, are revolutionizing the way companies think about wellness. Wearables are the latest in workplace fads and they’ve got the numbers to back it up: sales are likely to hit $4 billion in 2017 and 125 million units are likely to be shipped by 2019. Wearable technology has transformed the workplace just as more and more employers are utilizing wellness programs to improve employee motivation and health. As the popularity of these technologies soars, so too will concerns around the associated privacy and data security risks. In this blog post, we discuss just a few of the legal implications for employers who run wellness programs embracing this new fad. Continue Reading March Fadness: Wearable Tech in the Workplace and Privacy
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
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
As our readers know we maintain a summary of U.S. state data breach notification laws, which we refer to as the “Mintz Matrix.” Our latest update is available here, and it should be part of your incident response “toolbox” and part of your planning.
During 2016, amendments to breach notification laws in five states went into effect (California, Nebraska, Oregon, Rhode Island and Tennessee). And by the end of last year, well over twenty states had introduced or were considering new regulations or amendments to their existing security breach laws. We expect there to continue to be significant regulatory activity in the data security space during 2017. As always, we will keep you abreast of changes and will release updated versions of our Mintz Matrix to keep pace with developments in the states.
We are keeping an eye out for signs of support for a national breach notification law. So far, there does not appear to be much political motivation for undertaking this effort. A key sticking point is anxiety among a number of states that a federal law would offer less protection than their existing state law. This is a valid concern since a national standard will only alleviate the significant burden of complying with the present patchwork of state laws if it has broad pre-emptive effect. Only time will tell if state and federal lawmakers can work together to develop a comprehensive nationwide regime for security breach notification and remediation.
In the meantime, we must keep tabs on the forty-seven states (along with the District of Columbia, Guam, Puerto Rico and the Virgin Islands) with their own security breach laws. Here is what’s been happening since our previous update in the Fall:
California amended its security breach law in order to require disclosure to affected residents (and to the Attorney General if more than 500 Californians are affected) when encrypted personal data is acquired by an unauthorized person together with an encryption key or security credential that could render the personal data readable or useable.
We note also that former Congressman Xavier Becerra recently took over as Attorney General in California, replacing Kamala Harris who aggressively pursued regulation in the privacy arena during her tenure as AG and who now serves California as one of its U.S. Senators. Given this change in leadership, it will be interesting to see if the state continues to be a leader in pushing for stringent data security and privacy measures at the state and federal level.
Last summer Illinois passed an amendment to its Personal Information Protection Act (“PIPA”) that significantly broadened protections for personal information and the obligations imposed on businesses that handle such data. The amendment became effective on January 1, 2017 and made several key changes to PIPA:
- Definition of Personal Information. PIPA’s definition of “personal information” has now been expanded to include medical information, health insurance information, and unique biometric data used for authentication purposes (examples cited in the statute are a fingerprint, retina or iris image, or unique physical representations or digital representations of biometric data). The amended definition also encompasses a user name or email address in combination with a password or security question and answer that would permit access to an online account when either the user name or email address, or password or security question and answer, are not encrypted or redacted.
- Encryption Safe Harbor. While PIPA already provided a safe harbor for data collectors if data disclosed due to a security breach was fully encrypted or redacted, the amendment clarified that the safe harbor does not apply if the keys to unencrypt or unredact or otherwise read compromised encrypted or redacted data have also been acquired in connection with the security breach.
- Nature of Notification. For security breaches involving a user name or email address in combination with a password or security question and answer, data collectors may now provide notice in electronic or other form to affected Illinois residents. Such notice must direct individuals to promptly change their user name or password and security question and answer, or to take other appropriate steps to protect all online accounts for which the affected resident uses the same user name or email address/password or security question and answer. The amended statute also provides an additional option for substitute notice when residents affected by a security breach are confined to one geographic area.
- New Exemptions. The amendment added an exemption for data collectors who meet their obligations under applicable provisions of the Health Insurance Portability and Accountability Act (“HIPAA”) and the Health Information Technology for Economic and Clinical Health Act (“HITECH”). Any data collector that provides notice of a security breach to the Secretary of Health and Human Services pursuant to its obligations under HITECH must also provide this notification to the Illinois Attorney General within five business days of notifying the Secretary. This exemption will primarily apply to certain entities operating in the healthcare space. The amended statute also deems financial institutions subject to applicable provisions of the Gramm-Leach-Bliley Act in compliance with PIPA’s data security requirements.
- Security Requirements. Beyond addressing breach notification, the amendment requires covered entities to implement and maintain reasonable security measures to protect records containing personal information of Illinois residents and to impose similar requirements on recipient parties when disclosing such personal information pursuant to a contract. The amended statute also requires state agencies to report security breaches affecting more than 250 Illinois residents to the Illinois Attorney General.
For those information junkies out there! The Office of Consumer Affairs and Business Regulation (the “OCABR”) in Massachusetts has created a public web-based archive of data breaches reported to the OCABR and the Massachusetts Attorney General since 2007. The data breach notification archive is available at www.mass.gov/ocabr and includes information about which entity was breached, how many Massachusetts residents were affected, if the breach was electronic or involved paper, and the nature of remediation services offered to affected residents.
It is always a good time to review your incident response plan and data privacy policies to bring everything in line with changes happening on the state level.
And now for the disclaimer: The Mintz Matrix is for informational purposes only and does not constitute legal advice or opinions regarding any specific facts relating to specific data breach incidents. You should seek the advice of the Mintz Levin privacy team or other experienced legal counsel when reviewing options and obligations in responding to a particular data security breach.
Make sure to get your February 2017 Mintz Matrix! Available here for downloading and always linked through the blog’s right-hand navigation bar.
With Inauguration Day upon us, it’s time for a #MLWashingtonCyberWatch update. President-elect Donald Trump has vocalized his support for the future of “cyber” throughout his campaign – but how will members of his cabinet act, or refuse to act, on his vision for that future?
During the past two weeks, the United States Senate has been holding confirmation hearings for Mr. Trump’s cabinet selections. Pointed questioning from senators has surfaced many issues of critical importance to the American people, among them the future of privacy and cybersecurity. The incoming administration will confront significant issues in these areas such as the use of back-door encryption, mass data collection and surveillance, and international cybersecurity threats. The nominees for Attorney General, Secretary of the Department of Homeland Security (“DHS”), and Director of the Central Intelligence Agency (“CIA”) were each questioned about how they will navigate these concerns as part of the Trump Administration. In this installment of #MLWashingtonCyberWatch we are discussing highlights from these hearings. Continue Reading #MLWashingtonCyberWatch: Nominees Discuss Future of Cybersecurity
The U.S. Federal Trade Commission (“FTC”) has filed a lawsuit against device manufacturer D-Link for allegedly deceiving the marketplace about the security of its products and, in turn, unfairly placing customer privacy at risk.
Taiwan-based manufacturers D-Link Corporation and D-Link Systems, Inc. (collectively, “D-Link”) design a variety of home network devices, such as routers, IP cameras, and baby monitors. Devices such as these are susceptible to hacking when they are connected to each other and to the internet (in what is often referred to as the “Internet of Things” or “IoT”), and weak security measures therefore pose a significant security concern. Judging from D-Link’s advertisements for its products, the company is certainly aware of these risks. D-Link boasted that its routers are safe locked from hackers thanks to “Advanced Network Security,” its baby monitors and cameras assure a “Secure Connection” to protect the livestream view of a sleeping child, and promises of an “easy” and “safe” network appear repeatedly during the set up process for a D-Link device with an online interface. As the FTC explains in its lawsuit, claims like those made by D-Link are not only misleading but also dangerous.
Despite an apparent awareness of consumers’ cybersecurity concerns, the FTC alleges that D-Link neglected to build common security measures into the devices it sells. The allegations are startling: mobile app credentials were stored unsecured in plain text on consumer devices; a private company key code was accidentally made viewable online for six months; hard-coded login credentials in camera software left video feeds vulnerable to unauthorized viewers. And that’s just the beginning. More details are listed in the FTC’s complaint filed in a U.S. District Court in California on January 5, 2017. These lapses, and D-Link’s deceptive advertising, prompted the FTC to charge the company with a violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C. §45.
As of January 10th, D-Link has denied the allegations outlined in the complaint and has retained the Cause of Action Institute as counsel to defend against the action.
The growing IoT problem
In recent years, the FTC has tried to keep pace with mounting concerns over the IoT industry by filing a handful of complaints focused on consumer protection. For example, it went after the company TRENDnet after the firm’s faulty software allowed hundreds of personal security cameras to be hacked. It also filed an action against computer parts manufacturer ASUS after its cloud services were compromised and the personal information of thousands of consumers was posted online. These isolated mistakes add up; when millions of unsecured and seemingly innocuous Wi-Fi-enabled devices join the global network, they can serve as a massive launchpad for crippling cyber-attacks like the one that overwhelmed internet traffic operator Dyn and shut down several major websites in October 2016. The efforts of the FTC are aimed at mitigating such attacks and encouraging technology developers to invest effort and resources in order to secure their IoT devices before they hit the marketplace.
Search for solutions
Both the FTC and the National Institute of Standards and Technology (NIST) have released reports offering guidelines and technical standards for building reliable security into the framework of new systems and devices. As we wrote about recently, the Obama administration had also left the Trump administration an extensive report on cybersecurity recommendations. Achieving these standards will require a combination of regular agency enforcement and greater market demand for safe, secure devices. In the meantime, some digital vigilantes are working to stop cyber-attacks before they start. Netgear, for instance, has launched a “bug bounty program” offering cash rewards of $150-$15,000 for eager hackers to track and report security gaps in its devices, applications, and APIS. Indeed, incentivizing solutions rather than quietly overlooking mistakes, and searching for loopholes in our laws, will make a substantial difference in safeguarding the IoT landscape.