The recent data breach of Hong Kong-based electronic toy manufacturer VTech Holdings Limited (“VTech” or the “Company”) is making headlines around the world for good reason: it exposed sensitive personal information of over 11 million parents and children users of VTech’s Learning Lodge app store, Kid Connect network, and PlanetVTech in 16 countries! VTech’s Learning Lodge website allows customers to download apps, games, e-books and other educational content to their VTech products, the Kid Connect network allows parents using a smartphone app to chat with their children using a VTech tablet, and PlanetVTech is an online gaming site. As of December 3rd, VTech has suspended all its Learning Lodge sites, the KidConnect network and thirteen other websites pending investigation. Continue Reading Happy Holidays: VTech data breach affects over 11 million parents and children worldwide
California again has provided a model of privacy legislation for other states to follow. New Hampshire Governor Maggie Hassan recently signed into law House Bill 520 (the “Bill”), a bipartisan effort to establish guidelines for the protection of student online personal information.
Who is covered by the Bill?
Modeled after California’s Student Online Personal Information Protection Act (SOPIPA), the Bill applies to operators of Internet websites, online services (including cloud computing services), and mobile applications with actual knowledge that their website, service or application is used primarily for K-12 school purposes and was designed and marketed for K-12 school purposes (“Operators”). Like SOPIPA, the Bill imposes certain obligations and restrictions on Operators with respect to the collection, use, storage and destruction of student personal information and becomes effective on January 1, 2016. We discuss SOPIPA in more detail here and provide recommendations for preparing to comply with the SOPIPA requirements.
The Bill does not apply to general audience websites, online services, and mobile applications, even if login credentials created for a covered site, service, or application may be used to access the general audience sites, services, or applications. The Bill also makes it clear that it is not intended to:
- limit Internet service providers from providing Internet connectivity to schools or students and their families;
- prohibit operators of websites, online service, or mobile application from marketing educational products directly to parents so long as the marketing did not result from the use of “Covered Information” under the Bill;
- impose a duty upon a provider of an electronic store, gateway, marketplace, or other means of purchasing or downloading software or applications to review or enforce compliance with the Bill on those applications or software;
- impose a duty upon a provider of an interactive computer service, as defined in 47 U.S.C. section 230, to review or enforce compliance with the Bill by third-party content providers; or
- impede the ability of students to download, export, or otherwise save or maintain their own student created data or documents.
What information is covered by the Bill?
The Bill defines “Covered Information” very broadly to include personally identifiable information or materials, in any media or format, created or provided to an Operator by either a student (or his/her parent or guardian) while using the Operator’s site, service, or application or by an employee or agent of the K-12 school, school district, local education agency, or county office of education, as well as information gathered by the Operator that is related to the student, such as information that is “descriptive of a student or otherwise identifies a student, including, but not limited to, information in the student’s educational record or email, first and last name, home address, date of birth, telephone number, unique pupil identifier, social security number, financial or insurance account numbers, email address, other information that allows physical or online contact, discipline records, test results, special education data, juvenile dependency records, grades, evaluations, criminal records, medical records, health records, biometric information, disabilities, socioeconomic information, food purchases, political affiliations, religious information, text messages, documents, other student identifiers, search activity, photos, voice recordings, or geo-location information.”
What do you have to do to comply with the Bill?
Avoid the following prohibited activities:
- Using any information (including persistent identifiers) created or collected through your site, service, or application to create a profile about a K-12 student;
- Engaging in targeted advertising (either on your site, service, or application or any other site, service, or application) when the targeting is based on any information (including covered information and persistent identifiers) that you have acquired as a result of the use of your site, service, or application;
- Selling, leasing, renting, trading, or otherwise making available a student’s information (including covered information), except in connection with a sale of your business provided that the buyer continues to be bound by this restriction with respect to previously acquired student information; or
- Disclosing protected information, except where the disclosure is mandated to “respond to or participate in judicial process”.
Implement and maintain the following security and deletion requirements:
- reasonable security procedures and practices (appropriate to the nature of the Covered Information) to protect Covered Information from unauthorized access, destruction, use, modification, or disclosure, and
- delete covered information if the school or district requests deletion of data under the control of the school or district.
What can you do with Covered Information?
Although, as discussed above, there are many restrictions on the use of Covered Information, Operators are permitted to:
- Use de-identified Covered Information within their sites, service, or application (or other sites, services, or applications owned by the Operator) to improve educational products and to demonstrate the effectiveness of their products or services (including in their marketing), and
- Share aggregated de-identified Covered Information for the development and improvement of educational sites, services, or applications.
Although the effective date is January 1, 2016, if you are an “Operator” under the Bill, this is the time to begin thinking about what kind of changes you may need to make in your processes and procedures and to put in place an implementation plan to be compliant with the Bill by its effective date.
If your company has an online presence — or provides marketing or advertising services — you should be registered for the fifth webinar in our 2015 Wednesday Privacy Webinar series: The Long Reach of COPPA. Recall the recent FTC settlement agreement with Yelp — clearly a site not targeted at children — that cost the online review company $450,000.
Register online here – NY and CA CLE credit is available.
It’s Monday morning — do you know your privacy/security status?
Here are a few bits and bytes to start your week.
SEC to Registered Investment Advisers and Broker-Dealers: It’s Your Turn to Pay Attention to Cybersecurity
The Division of Investment Management of the Securities & Exchange Commission (SEC) has weighed in on cybersecurity of registered investment companies (“funds”) and registered investment advisers (“advisers”) as an important issue because both funds and advisers increasingly use technology to conduct their business activities, and need to protect confidential and sensitive information related to these activities from third parties. That information includes information concerning fund investors and advisory clients. We’ve summarized key points from the recently-issued Guidance.
The Guidance recommends a number of measures that funds and advisers may wish to consider in addressing cybersecurity risk, including:
- Conduct a periodic assessment of:
- the nature, sensitivity and location of information that the firm collects, processes and/or stores, and the technology systems it uses;
- internal and external cybersecurity threats to and vulnerabilities of the firm’s information and technology systems;
- security controls and processes currently in place; and
- the impact should the information or technology systems become compromised; and the effectiveness of the governance structure for the management of cybersecurity risk.
- Create a strategy that is designed to prevent, detect and respond to cybersecurity threats, such a strategy could include:
- controlling access to:
- various systems and data via management of user credentials;
- authentication and authorization methods;
- firewalls and/or perimeter defenses;
- sensitive information and network resources;
- network segregation;
- system hardening; and
- data encryption.
- controlling access to:
- protecting against the loss or exfiltration of sensitive data by:
- restricting the use of removable storage media; and
- deploying software that monitors technology systems for:
- unauthorized intrusions;
- loss or exfiltration of sensitive data; or
- other unusual events.
- data backup and retrieval; and
- the development of an incident response plan
- routine testing of strategies could also enhance the effectiveness of any strategy.
- Implement the strategy through:
- written policies and procedures; and
- training that:
- provides guidance to officers and employees concerning applicable threats and measures to prevent, detect and respond to such threats; and
- monitors compliance with cybersecurity policies and procedures.
Most of this should not be a surprise to any business dealing with sensitive financial information these days, but a recent SEC cybersecurity sweep examination by the SEC’s Office of Compliance Inspections and Examinations (OCIE) found that 88 percent of the broker-dealers (BDs) and 74 percent of the registered investment advisers (RIAs) they visited experienced cyber-attacks directly or indirectly through vendors.
Penn State University Confirms Cyberattack Originated in China
If you’re studying at Penn State’s College of Engineering, you will not have access to the Internet for a while. The University said last week that of two recent cyber attacks at the College, at least one was carried out by a “threat actor” based in China. Penn State was alerted to a breach by the FBI in November and has been investigating since – during that time, a 2012 breach was also discovered. The 2012 breach apparently originated in China, and compromised servers containing information on about 18,000 people.
For more: Cyberattack on Penn State University
Digital Advertising Alliance to Enforce Mobile App Principles
Starting September 1, the Digital Advertising Alliance (DAA) will begin to enforce its Application of Self-Regulatory Principles to the Mobile Environment. The DAA issued the mobile principles back in July of 2013 (see our post here), but delayed enforcement while the DAA implemented a choice mechanism for the mobile environment. Mobile tools for consumers were released in February: App Choices and the Consumer Choice Page for Mobile Web.
The Guidance addresses mobile-specific issues such as privacy notices, enhanced notices and opt-out mechanisms for data collected from a particular device regarding app use over time and cross-app data; privacy notices, enhanced notices and opt-in consent for geolocation data; and transparency and controls — including opt-in consent — for calendar, address books, photo/video data, etc. created by a user that is stored on or accessed through a particular device.
After September 1, any entity that collects and uses any of this type of data will be required to demonstrate compliance with the Guidance or risk being subject to the DAA’s accountability mechanism.
REMINDER — UPCOMING PRIVACY WEDNESDAY WEBINAR
Don’t forget to register for the next in our Privacy Wednesday Webinar series: The Long Reach of COPPA. Webinar is eligible for NY and CA CLE credit — register here.
Wednesday, May 13 – Mintz Employment Law Summit (Boston)
A discussion of hot topics facing employers, including Privacy in the Workplace. Free event, breakfast and lunch included. Register here.
Wednesday, May 13 – National Security, Privacy, and Renewing the USA PATRIOT Act, Hudson Institute, NY
Live streaming starts at noon. #PATRIOTAct. More information here.
Wednesday, May 13 – Ninth Annual Law & Information Society Symposium – Fordham Law School
Trends in the global processing of data, developments in new technologies, privacy enforcement actions and government surveillance put international privacy at the center of the global law and policy agenda. Government regulators, policymakers, legal experts, and industry players need to find solutions to cross-border conflicts and to the issues presented by innovative technologies. This conference seeks to create a robust, but informal dialog that will explore possible solutions to current questions arising from the international legal framework, infrastructure architecture and commercial practices. Information here.
Thursday, May 14 – IAPP KnowledgeNet (Boston area)
Learn about data privacy issues posed by wearables, wellness tracking apps, company wellness programs and other technologies and services here in the U.S. and abroad. Register here.
Monday, May 18 – 36th IEEE Symposium on Security & Privacy – Fairmont Hotel (San Jose)
Since 1980, the IEEE Symposium on Security and Privacy has been the premier forum for presenting developments in computer security and electronic privacy, and for bringing together researchers and practitioners in the field. The 2015 Symposium will mark the 36th annual meeting of this flagship conference. More information here.
Wednesday, May 27 – Mintz Privacy Wednesday Webinar – The Long Reach of COPPA
The fifth in our Wednesday Webinar series will focus on a discussion of COPPA, the long-awaited amendment and issues. We’ll also discuss the latest Federal Trade Commission settlements and how to avoid being the next target. Register here.
As we predicted in our post late last month, Google’s YouTube Kids app has attracted more than just the “curious little minds” Google was hoping for. Yesterday, a group of privacy and children’s rights advocates (including the Center for Digital Democracy and the American Academy of Child and Adolescent Psychiatry) asked the Federal Trade Commission “to investigate whether Google’s YouTube Kids app violates Section 5 of the FTC Act . . . .”
The advocacy group downloaded the YouTube Kids app onto an Android device, and two iOS devices. It then reviewed and assessed the app as it functioned; watching content Google says caters to children while protecting them from questionable or troubling content.
The advocacy group claims this review identified three features of the app it believes are unfair or deceptive. First, the group faults Google for offering content “intermixed” with advertising content in a manner the group claims “would not be permitted to be shown on broadcast or cable television” under Federal Communications Commission guidelines. Second, the group worries that much of advertising violates FTC Endorsement Guidelines because it is user-generated in a way capable of masking relationships with product manufacturers. Finally, the group claims the advertising content violates the YouTube Kids app’s stated policies and procedures.
Taken together, the advocacy group issues all collapse around the same core argument: very young children (generally under 5 years of age) cannot distinguish between actual content and advertising and that makes them “uniquely vulnerable to commercial influence.” This argument has a lot of emotional appeal: who wouldn’t want to protect small children? But the implications of this argument extend far beyond the YouTube Kids app, and would call into question any free, advertising supported video platform, including network television. As such, it seems like the advocacy groups position face significant First Amendment hurdles.
Although the advocacy group does not (yet) take issues with YouTube Kids’ data collection practices, it does question how the app is able to generate video recommendations. And its letter to the FTC explicitly asks the Commission to investigate whether or not children are being tracked without verifiable parental consent.
The ball is now squarely in the FTC’s court. It could launch a non-public investigation regarding the app’s practices, or it could do nothing. However, as the Commission has recently signaled a renewed interest in protecting children online (including entering a $19 million dollar settlement with Google over children’s in-app purchases last September), it seems likely the Commission will have at least some questions for Google following the advocacy group’s letter.
We’ll be sure to keep you posted.
On Friday, the FTC published updates to the COPPA FAQs, the Commission’s compliance guide for businesses and consumers, to address the applicability of COPPA and the Amended COPPA Rule to educational institutions and businesses that provide online services, including mobile apps, to educational institutions. Specifically, nearly a year after the last update to the “COPPA and Schools FAQs”, the Commission revisited its answers to FAQs M.1, M.2, and M.5 and deleted FAQ M.6 in an attempt to streamline the FAQs to provide further clarity on the key topics of notice and consent, best practices for educational institutions, and the interplay between COPPA and other federal and state laws that may apply in the education space. To access our blog post on the prior update to the COPPA and Schools FAQs please click here. Continue Reading Privacy Monday – March 23, 2015: COPPA Refresh
Google made good on the rumors and the company’s subsequent promise last December to create a family-friendly version of its popular YouTube service with its launch on Monday of the YouTube Kids app. Available on both the App Store and Google Play free of cost and only in the United States, the YouTube Kids app is described by Google as an “app designed for curious little minds to dive into a world of discovery, learning, and entertainment…delightfully simple and packed full of age-appropriate videos, channels, and playlists.” Continue Reading The YouTube Kids app is here! Now what?
As expected in his State of the Union address last night, President Obama made it very clear that cybersecurity is on his agenda for 2015. After stating that:
“No foreign nation, no hacker should be able to shut down our networks, steal our trade secrets or invade the privacy of American families, especially our kids,”
the President urged Congress to “finally” pass “legislation we need to better meet the evolving threat of cyber attacks, combat identity theft, and protect our children’s information” and cautioned law makers that “if we don’t act, we leave our nation and our economy vulnerable.”
Just days before the State of the Union address, in a speech delivered at the Federal Trade Commission on January 12, the President highlighted the measures he discussed in the State of the Union and unveiled the next steps in his comprehensive approach to better protect American companies, consumers, and infrastructure against cyber threats. These steps include:
- Improving consumer security by establishing a national standard for companies to notify employees and customers about security breaches and identifying and preventing identity theft. For more information about the proposed Personal Data Notification & Protection Act, please see our prior blog post. The President announced that in an effort to tackle identity theft and assist consumers in spotting identity theft early on, several large financial companies have committed to offer free credit scores to their customers, joining an existing list of financial companies that already engage in this practice.
- Improving consumer confidence online by passing a Consumer Privacy Bill of Rights to establish an enforceable code of conduct for online interactions and protect consumers’ privacy. This proposed legislation will be based on the Obama Administration’s 2012 Consumer Privacy Bill of Rights and is expected to be released within the next month and a half.
- Safeguarding student data in the classroom and beyond by passing legislation to promote student privacy, convening the private sector to pledge to help enhance the privacy of students, and offering new tools via the Department of Education to help schools and teachers better protect the privacy of students. Sometime in the next two months, the Obama administration will release a proposal to update the Family Educational Rights and Privacy Act (FERPA). The President highlighted that the proposed Student Digital Privacy Act would: (i) limit the use of data collected “in an educational context” to educational purposes; (ii) prohibit companies from selling student data to third parties for unrelated purposes; and (iii) prohibit targeted advertising derived from data collected in school, however, the bill would still permit the use of such data for certain types of research, as well as for improving the effectiveness of learning technology products. The President noted that the bill would be modeled on a recently passed California law covering the collection and use of student data. For more information on the California law, please see our prior blog post.
- According to a recent White House press release on the subject, as part of the Obama Administration’s comprehensive plan to better protect the privacy of consumers, on January 12, the Department of Energy and the Federal Smart Grid Task Force released a new Voluntary Code of Conduct (VCC) “for utilities and third parties providing consumer energy use services that will addresses privacy related to data enabled by smart grid technologies.” For more information about this initiative, please click here.
The next item on the law makers’ agenda is a hearing before the House Energy and Commerce subcommittee next Tuesday entitled “What are the Elements of Sound Data Breach Legislation?” According to new subcommittee Chairman Michael Burgess (R-TX), “data security will be the focus of our subcommittee’s first hearing as we drill down on what components should be included in a bill that will give consumers the peace of mind they deserve.”
We will keep you updated on proposed legislation and new initiatives that are part of the Administration’s cyber security plan.
If cybersecurity and data privacy are on the President’s agenda, shouldn’t those issues be on the top of your company’s agenda this year?!
Five Golden Rules…….(well, five new privacy laws/requirements)
There are five significant new privacy laws/amendments that will be effective as of New Year’s Day — January 1, 2015 — and four are from California. Pull up a chair, brew that cup of tea. It’s time to review and prepare. Continue Reading On the Fifth Day of Privacy, California (and Delaware) gave to me