On February 12, 2019, the Federal Trade Commission announced the completion of the first regulatory review of the Controlling the Assault of Non-Solicited Pornography and Marketing Act (“CAN-SPAM”) Rule (the “CAN-SPAM Rule” or “Rule”). By a vote of 5-0, the FTC voted to retain the CAN-SPAM rule with no modifications.
On December 19, 2018, the European Commission (the “Commission”) issued a press release regarding the publication of the Commission’s second annual review of the functioning of the EU-U.S. Privacy Shield (the “Report”).
In connection with its hearings on data security, the Federal Trade Commission hosted a December 12 panel discussion on “The U.S. Approach to Consumer Data Security.” Moderated by the FTC’s Deputy Director for Economic Analysis James Cooper, the panel featured private practitioners Lisa Sotto, from Hunton Andrews Kurth, and Janis Kestenbaum, academics Daniel Solove (GW Law School) and David Thaw (University of Pittsburgh School of Law), and privacy advocate Chris Calabrese (Center for Democracy and Technology). Lisa set the stage with an overview of the U.S. data security framework, highlighting the complex web of federal and state rules and influential industry standards that result in a patchwork of overlapping mandates. Panelists debated the effect of current law and enforcement on companies’ data security programs before turning to the “optimal” framework for a U.S. data security regime. Among the details discussed were establishing a risk-based approach with a baseline set of standards and clear process requirements. While there was not uniform agreement on the specifics, the panelists all felt strongly that federal legislation was warranted, with the FTC taking on the role of principal enforcer.
On December 4, 2018, the New York Attorney General (“NY AG”) announced that Oath Inc., which was known as AOL Inc. (“AOL”) until June 2017 and is a subsidiary of Verizon Communications Inc., agreed to pay New York a $4.95 million civil penalty following allegations that it had violated the Children’s Online Privacy Protection Act (“COPPA”) by collecting and disclosing children’s personal information in conducting online auctions for advertising placement. This is the largest-ever COPPA penalty.
On December 4, 2018, the Federal Trade Commission published a notice in the Federal Register indicating that it is seeking public comment on whether any amendments should be made to the FTC’s Identity Theft Red Flags Rule (“Red Flags Rule”) and the duties of card issuers regarding changes of address (“Card Issuers Rule”) (collectively, the “Identity Theft Rules”). The request for comment forms part of the FTC’s systematic review of all current FTC regulations and guides. These periodic reviews seek input from stakeholders on the benefits and costs of specific FTC rules and guides along with information about their regulatory and economic impacts.
The Federal Trade Commission published the agenda for the ninth session of its Hearings on Competition and Consumer Protection in the 21st Century (“Hearings Initiative”), a wide-ranging series of public hearings. The ninth session, to take place on December 11-12, 2018, will focus on data security. Lisa Sotto, chair of Hunton Andrews Kurth’s Privacy and Cybersecurity practice, is one of five panel participants discussing “The U.S. Approach to Consumer Data Security.” The panel will be moderated by James Cooper, Deputy Director for Economic Analysis of the FTC’s Bureau of Consumer Protection.
On November 1, 2018, Senator Ron Wyden (D-Ore.) released a draft bill, the Consumer Data Protection Act, that seeks to “empower consumers to control their personal information.” The draft bill imposes heavy penalties on organizations and their executives, and would require senior executives of companies with more than one billion dollars per year of revenue or data on more than 50 million consumers to file annual data reports with the Federal Trade Commission. The draft bill would subject senior company executives to imprisonment for up to 20 years or fines up to $5 million, or both, for certifying false statements on an annual data report. Additionally, like the EU General Data Protection Regulation, the draft bill proposes a maximum fine of 4% of total annual gross revenue for companies that are found to be in violation of Section 5 of the FTC Act.
On October 19, 2018, the Federal Trade Commission announced that it released a paper on the Staff Perspective on the Informational Injury Workshop (the “Paper”), which summarized the outcomes of a workshop it hosted on December 12, 2017 to discuss and better understand “informational injuries” (i.e., harm suffered by consumers as a result of privacy and security incidents, such as data breaches or unauthorized disclosures of data) in an effort to guide (1) future policy determinations related to consumer injury and (2) future application of the “substantial injury” prong in cases involving informational injury. Continue Reading FTC Releases Staff Perspective on Informational Injuries
Vizio, Inc. (“Vizio”), a California-based company best known for its internet-connected televisions, agreed to a $17 million settlement that, if approved, will resolve multiple proposed consumer class actions consolidated in California federal court. The suits’ claims, which are limited to the period between February 1, 2014 and February 6, 2017, involve data-tracking software Vizio installed on its smart TVs. The software allegedly identified content displayed on Vizio TVs and enabled Vizio to determine the date, time, channel of programs and whether a viewer watched live or recorded content. The viewing patterns were connected to viewer’s IP addresses, though never, Vizio emphasized in its press release announcing the proposed settlement, to an individual’s name, address, or similar identifying information. According to Vizio, viewing data allows advertisers and programmers to develop content better aligned with consumers’ preferences and interests. Continue Reading Vizio Agrees to $17M Settlement to Resolve Smart TV Class Action Suit
On September 27, 2018, the Federal Trade Commission announced a settlement agreement with four companies – IDmission, LLC, (“IDmission”) mResource LLC (doing business as Loop Works, LLC) (“mResource”), SmartStart Employment Screening, Inc. (“SmartStart”), and VenPath, Inc. (“VenPath”) – over allegations that each company had falsely claimed to have valid certifications under the EU-U.S. Privacy Shield framework. The FTC alleged that SmartStart, VenPath and mResource continued to post statements on their websites about their participation in the Privacy Shield after allowing their certifications to lapse. IDmission had applied for a Privacy Shield certification but never completed the necessary steps to be certified. Continue Reading Four Companies Settle FTC Allegations Regarding False EU-U.S. Privacy Shield Certifications