On March 31, 2016, the Federal Communications Commission (FCC) adopted a Notice of Proposed Rulemaking (NPRM) that proposed to establish new privacy guidelines for broadband Internet service providers (ISPs).1 The FCC designed the proposal to “ensure broadband customers have meaningful choice, greater transparency and strong security protections for their personal information collected by ISPs.”2 To accomplish this goal, the NPRM proposes to apply the privacy requirements of Section 222 of the Communications Act3 to ISPs that offer broadband Internet access service (or, in the NPRM’s terminology, “BIAS”).4 The FCC asserted that applying the privacy requirements set forth in Section 222 would “give broadband customers the tools they need to make informed decisions about how their information is used by their ISPs and whether and for what purposes [their information may be shared] with third parties.”5
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Regulatory
WSGR Alert: FTC Brings First Privacy Enforcement Action Against a Mobile Ad Network
On June 22, 2016, the Federal Trade Commission (FTC) announced that it has settled charges that InMobi, a Singapore-based mobile advertising company, deceptively tracked the locations of hundreds of millions of consumers, including children, to…
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Monitoring and Recording Consumers’ Calls in California Can Be a Risky Practice
Many businesses monitor or record customer service, telemarketing, and other telephone calls with consumers to help them improve customer service and for evidentiary reasons. Under federal and many state laws, calls may lawfully be monitored or recorded by businesses as long as those businesses have permission from their employees who participate on the calls. However, some states require the permission of everyone participating on a call before the call may legally be monitored or recorded. And some state laws potentially implicated by monitoring and recording calls are not clear as to what is required. California is one of those states.
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Tennessee Updates Data Breach Notification Law
The State of Tennessee recently amended its data breach notification statute, Tenn. Code Ann. § 47-18-2107, which is set to go into effect on July 1, 2016. Numerous commentators have proclaimed that the amendment1 marks a watershed moment—that with the enactment of S.B. 2005, Tennessee becomes the first state to eliminate the encryption safe harbor from its data breach notification statute. However, this is not the case; Tennessee has not removed its primary encryption safe harbor. Even under the amended Tennessee law, data encryption remains an important method for securing data, and one that may reduce notice obligations if a breach occurs.
S.B. 2005 makes three changes to the breach notification statute that may impact whether Tennessee’s notification law applies to a particular data breach situation, and when organizations must send notices to affected individuals.
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CFPB Brings First Data Security Enforcement Action
The Consumer Financial Protection Bureau (CFPB) recently brought its first data security enforcement action, adding itself to the growing list of federal regulators tackling data security issues. The CFPB’s enforcement action was against Dwolla Inc., a Des Moines, Iowa-based online payment platform. The CFPB alleged that Dwolla misrepresented its data security practices, and as a result, Dwolla agreed to pay a $100,000 penalty and to implement significant data security measures.1 While this is only its first data security-related action, the CFPB appears to be taking very seriously its role in securing consumers’ financial information. The requirements the agency placed on Dwolla’s board of directors make this clear, as the board will be held accountable for any security shortcoming by the company. This goes beyond the typical requirements imposed by the Federal Trade Commission (FTC), the regulator with the most extensive data security experience, in its data security enforcement actions. As such, companies, especially financial technology start-ups, should take note of the data security requirements placed on Dwolla by the CFPB, and ensure that any statements made regarding the security of consumers’ information are accurate.
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HHS Issues HIPAA Guidance for Mobile Health Apps
The U.S. Department of Health and Human Services (HHS) recently issued guidance to help mobile application developers analyze whether the Health Insurance Portability and Accountability Act of 1996 (HIPAA) may apply to them.1 Not every mobile application developer that handles personal health information is subject to HIPAA regulation, and determining whether HIPAA applies is situation-dependent and requires thoughtful analysis. The HHS guidance lists some of the factors to consider when assessing whether HIPAA applies to an app developer and analyzes several scenarios where apps handle health-related information.
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