Data Compliance & Security

Developers and operators of educational technology services should take note.  Just before the election, California Attorney General Kamala Harris provided a document laying out guidance for those providing education technology (“Ed Tech”).  “Recommendations for the Ed Tech Industry to Protect the Privacy of Student Data” provides practical direction that operators of websites and online services of a site or service used for K-12 purposes can use to implement best practices for their business models.

Ed Tech, per the Recommendations, comes in three categories: (1) administrative management systems and tools, such as cloud services that store student data; (2) instructional support, including testing and assessment; (3) content, including curriculum and resources such as websites and mobile apps.  The Recommendations recognize the important role that educational technology plays in classrooms by citing the Software & Information Industry Association; the U.S. Market for PreK-12 Ed Tech was estimated at $8.38 billion in 2015.

The data that may be gathered by through Ed Tech systems and services can be extremely sensitive, including medical histories, social and emotional assessments and test results.  At the Federal level, the Family Educational Rights and Privacy Act (FERPA) and the Children’s Online Privacy Protection Rule (COPPA) govern the use of student data.  However, according to the Recommendations, these laws “are widely viewed as having been significantly outdated by new technology.”

Recognizing this, California has enacted laws in this space to fill in gaps in the protection.  Cal. Ed. Code § 49073.1, requires that local education agencies (county offices of education, school districts, and charter schools) that contract with third parties for systems or services that manage, access, or use pupil records, to include specific provisions regarding the use, ownership and control of pupil records. On the private side, the Student Online Personal Information Privacy Act (SOPIPA), requires Ed Tech provides to comply with baseline privacy and security protections.

Building on this backdrop of legislation, Attorney General Harris’ office provided six recommendations for Ed Tech providers, especially those that provide services in the pre-kindergarten to twelfth grade space.

  • Data Collection and Retention: Minimization is the Goal 

Describe the data being collected and the methods being used, while understanding that data can be thought of to include everything from behavioral data to persistent identifiers.  If your service links to another service, disclose this in your privacy policy and provide a link to the privacy policy of the external service.  If you operate the external service, maintain the same privacy and security protections for the external service that users enjoyed with the original service.  Minimize the data collected to only that necessary to provide the service, retain the data for only as long as necessary, and be able to delete personally identifiable information upon request.

  • Data Use: Keep it Educational

Describe the purposes of the data you are collecting.  Do not use any personally identifiable data for targeted advertising, including persistent identifiers, whether within the original service, or any other service.  Do not create profiles other than those necessary for the school purposes that your service was intended for.  If you use collected data for product improvement, aggregate or de-identify the data first.

  • Data Disclosure: Make Protections Stick 

Specifically describe any third parties you share personally identifiable data with. If disclosing for school purposes, only do so to further the school specific purpose of your site.  If disclosing for research purposes, only disclose personally identifiable information if you are required by federal or state law, or if allowed under federal and state law, and the disclosure is under the direction of a school, district or state education department.  Service providers should be contractually required to use any personally identifiable data only for the contracted service, not disclose the information, take reasonable security measures, delete the information when the contract is completed, and notify you of any unauthorized disclosure or breach.  Do not sell any collected information, except as part of a merger or acquisition.

  • Individual Control: Respect Users’ Rights 

Describe procedures for parents, legal guardians, and eligible students to access, review and correct personally identifiable data.  Provide procedures for students to transfer content they create to another service, and describe these procedures in your privacy policy.

  • Data Security: Implement Reasonable and Appropriate Safeguards

Provide a description of the reasonable and appropriate security you use, including technical, administrative and physical safeguards, to protect student information.  Describe your process for data breach notification.  Provide training for your employees regarding your policies and procedures and employee obligations.

  • Transparency: Provide a Meaningful Privacy Policy

Make available a privacy policy, using a descriptive title such as Privacy Policy, in a conspicuous manner that covers all student information, including personally identifiable information.  The policy should be easy for parents and educators to understand.  Consider getting feedback regarding your actual privacy policy, including from parents and students.  Include an effective date on the policy and describe how you will provide notice to the account holder, such as a school, parent, or eligible student.  Include a contact method in the policy, at a minimum an email address, and ideally also a toll-free number.

Given the size of the California market, any guidance issued by the California Attorney General’s office should be carefully considered and reviewed.   If you are growing an ed tech company, this is the time to build in data privacy and security controls.   if you are established, it’s time to review your privacy practices against this Guidance and see how you match up.  If you have any questions or concerns as to how these recommendations could be applied to your company, please do not hesitate to contact the team at Mintz Levin.

Imagine you are the CEO of company sitting across from an interviewer. The interviewer asks you the age old question, “So tell me about your company’s strengths and weaknesses?”  You start thinking about your competitive advantages that distinguish you from competitors.  You decide to talk about how you know your customers better than the competition, including who they are, what they need, and how your products and services fit their needs and desires.  The interviewer, being somewhat cynical, asks “Aren’t you worried about the liabilities involved with collecting all that data?”

In honor of National Cyber Security Awareness Month, we at Mintz Levin wanted to take the chance to remind our readers of data’s value as an asset and the associated liabilities that stem from its collection and use, as well as provide guidelines for maximizing its value and minimizing its liabilities.  Continue Reading 3 Guidelines to Maximize Value of Data

The term “cloud computing,”  — a process by which remote computers are used to store, manage and process data — is no longer an unfamiliar term. According to at least one estimate, “approximately 90 percent of businesses using the cloud in some fashion.” American Airlines is assessing major providers of cloud services for an eventual relocation of certain portions of its customer website and other applications to the cloud.

What some may not realize is that there are actually three main types of clouds: public, private and hybrid.  Public clouds are those run by a service provider, over a public network.  For example, Amazon Web Services offers public cloud services, among others.  A private cloud is operated for a single entity, and may be hosted internally or by a third-party service provider.  A hybrid cloud is a composition of two or more clouds, such as a private cloud and a public cloud, such that the benefits of both can be realized where appropriate.  Each of these cloud infrastructure types has different advantages and disadvantages.

For a given company looking to migrate to the cloud, the appropriate option will be motivated in part by business considerations; however, data privacy and security laws, compliance best practices, and contractual obligations will provide mandatory baselines that companies cannot ignore. As such, relevant laws, best practices, and contractual obligations serve as a useful starting point when evaluating the appropriate cloud option.

Most every organization has data flow systems that receive data, and then process and use the data to deliver a service. Below are three initial steps a decision maker should take when evaluating a potential cloud infrastructure choice.

 

First, consider the statutory implications of the types of data being processed

For example, is the system collecting social security numbers and driver’s license numbers? Pursuant to California Civil Code Section 1798.81.5, businesses that “own or license” personal information concerning a California resident are required to “implement and maintain reasonable security procedures and practices . . . to protect the personal information from unauthorized access, destruction, use modification, or disclosure.”  Of course, many other state and federal laws may also provide additional obligations, such as the HIPAA Security Rule, which applies to certain health information under certain circumstances.

Deciding which relevant laws apply, and then interpreting language such as “reasonable security procedures and practices” is a complicated process. Companies should consult experienced legal counsel regarding these risks, especially in light of potential liability.

Second, consider any relevant contractual obligations

For example, many companies may have contracts that provide for certain service level availability (SLA) obligations for services they provide. It is also possible that these contracts could have their own security requirements in place that must be met.

Third, decide which cloud architecture option makes sense in light of the first two steps as well as business considerations

After senior decision makers, with the benefit of experienced legal counsel, have decided what elements of applicable laws, best practices, and contractual obligations apply, further business considerations may need to be addressed from an operational standpoint.  For example, interoperability with other services may be an issue, or scalability may be an issue.

 

Through these requirements, in conjunction with appropriate information technology stakeholders, the appropriate cloud architecture can be chosen. Private clouds can offer the strongest security controls, as they are operated by a single entity and can offer security options not present in public clouds.  As such, a private cloud may be appropriate where a very strong security stance is deemed necessary.  Public clouds are often less expensive, but offer a more limited range of security options.  A hybrid cloud may be appropriate where an entity hosts certain high security data flow systems, as well as other systems with less sever security requirements.  For example an entity that has an HR system that contains social security numbers, as well as an employee shift scheduling system might choose to host the HR system on a private cloud, while hosting the customer feedback system on a public cloud system, with limited cross over and interoperability between the two systems.

Once you have chosen which cloud suits your business and data flow, the real work of getting appropriate contract documents in place begins.   We’ll discuss those issues in a future blog post.

 

Last week the clothing retailer Eddie Bauer LLC issued a press release to announce that its point of sale (“POS”) system at retail stores was compromised by malware for more than six months earlier this year.  The communication provided few details but did specify that the malware allowed attackers to access payment card information related to purchases at Eddie Bauer’s more than 350 locations in the United States, Canada and other international markets from January 2 until July 17, 2016.  According to the company, its e-commerce website was not affected.

In an open letter posted online, Eddie Bauer’s CEO Mike Egeck explained that the company had conducted an investigation, involved third party experts and the FBI, and now is in the process of notifying customers and reviewing its IT systems to bolster security.  These are customary and important steps following a security breach to mitigate harm to customers, protect against future threats, and comply with state data breach notification laws.    Read on to find out more ….. Continue Reading Eddie Bauer Latest Victim of POS Malware Attack

On Friday, the heads of the Federal Trade Commission overruled the decision of the Administrative Law Judge (“ALJ”) in In the Matter of LabMd., Inc. The FTC concluded that the ALJ had erred in dismissing the Commission’s case against a lab testing company LabMD and misapplied the unfairness standard.  The key determination by the FTC was that the mere disclosure of sensitive medical information is cognizable harm under Section 5(c) of the FTC Act, 15 U.S.C. § 45(a), irrespective of whether there is further economic or physical harm.   What does this mean for privacy enforcement?   Read on. Continue Reading FTC Plants A Flag With LabMD Ruling: What This Means for Enforcement

In a decision favorable to the airline industry—but not helpful to other companies—the California Court of Appeal said that a privacy enforcement action against Delta is not going to fly.  On May 25, 2016, the Court of Appeal tossed the California Attorney General’s CalOPPA enforcement action against Delta Airlines, affirming the lower court’s 2013 dismissal of the case with prejudice.

As we previously wrote, California AG’s office has been taking incremental steps toward ensuring that mobile applications comply with CalOPPA.  As early as 2012, its office began sending notices of non-compliance to mobile application developers.  When some companies failed to respond, the Attorney General chose Delta as its pilot case, promptly filing its first-ever enforcement action under CalOPPA.  Over the past three years, we have followed the Attorney General’s CalOPPA compliance campaign, including the Delta case.   Continue Reading Delta Wins CalOPPA Case – But Your Mobile App May Not Fly

Mintz Levin’s Immigration Law Blog is running a series titled “Innocents Abroad” addressing issues in an increasingly globalized economy where employers assign employees all over the globe.

These are big questions, reflecting some of the practical concerns in our international marketplace.  The series focuses on the well-intentioned Global HR Director, Ned Help, who will raise hot topics and difficulties his company faces when sending their employees abroad.  We will then explore the common pitfalls and offer practical solutions to the difficulties Ned Help faces.   This month’s edition:   Privacy Considerations – follow the rest of the series at Innocents Abroad.


 

From:            Carrie Counselor

To:                  Ned Help

Date:              May 24, 2016

RE:     Privacy considerations for employees working abroad

Dear Ned,

I understand that one of your employees will be engaging a six-month temporary assignment around Europe to scope market opportunities, and you’d like to have a better understanding of what to be thinking about in terms of privacy.  Great question!  This is an area where many employers struggle because other jurisdictions protect privacy and personal data quite differently than we do here in the United States.

Generally speaking, federal and state laws applicable to employee information do not have “extraterritorial” effect beyond the information that remains in the United States, meaning that American employees working abroad (even temporarily) will not benefit from US legal protections with respect to personal information collected, stored or transmitted outside of the country.

What makes this area of the law particularly crucial and daunting for employers is that non-US countries frequently offer greater protections to employees and establish far higher compliance obligations on the part of employers.  Of particular concern for you should be the data protection landscape across the European Economic Area (referred to as the “EEA,” encompassing all European Union (EU) Member States as well as Iceland, Liechtenstein and Norway) because each country has passed its own set of national laws governing the collection, use, retention and transmission of personal data. Companies must consider these local laws before electronically monitoring an employee outside the United States or transferring an employee’s personal information back home.  Let’s talk specifics: Continue Reading Innocents Abroad: Privacy Considerations for Employers

As we reported last month, the FCC was preparing a proposed rulemaking (NPRM) to establish privacy and data security requirements for broadband internet access service (BIAS) providers.  The FCC has now released that proposal with comments and reply comments due May 27th and June 27th respectively.

The brief background to this proposal is that in 2015, the FCC adopted net neutrality rules in Open Internet Order, which reclassified BIAS as a common carrier telecommunications service subject to regulation under Title II of the Communications Act.  The Commission determined that, as a consequence of reclassification, Section 222 of the Communications Act, which is part of Title II, would now apply to BIAS providers. Section 222 regulates a telecommunications carrier’s use and disclosure of Customer Proprietary Network Information (“CPNI”) – which includes information related to the quantity, location, and amount of use of a telecommunications service.  The FCC concluded in its Open Internet Order that the rules implementing Section 222 were telephone-centric and ill-suited to BIAS, and so chose to forbear from applying those rules to ISPs.  With this latest release, the FCC is proposing a new set of rules implementing Section 222 that would apply to BIAS providers. Continue Reading FCC Broadband Privacy and Security Proposed Rulemaking Underway

As we wrote previously, the federal government released several guidance documents last month implementing The Cybersecurity Information Sharing Act (CISA).  Among these was the Guidance to Assist Non-Federal Entities to Share Cyber Threat Indicators and Defensive Measures with Federal Entities under CISA published by the Department of Homeland Security and Department of Justice.  This document provides guidance on the circumstances in which personal information of a specific individual may – or may not – need to be shared in order to adequately describe a cyber threat indicator (CTI).   In addition, the release identifies certain categories of information likely to be considered individually identifiable information unrelated to a cybersecurity threat, and provides guidance on sharing CTIs with the government in a manner covered by the Act’s liability protections. Continue Reading CISA Guidelines (Part 3): Guidance to Assist Non-Federal Entities