On January 8, 2018, the FTC announced an agreement with electronic toy manufacturer, VTech Electronics Limited and its U.S. subsidiary, settling charges that VTech violated the Children’s Online Privacy Protection Act (“COPPA”) by collecting personal information from hundreds of thousands of children without providing direct notice or obtaining their parent’s consent, and failing to take reasonable steps to secure the data it collected. Under the agreement, VTech will (1) pay a $650,000 civil penalty; (2) implement a comprehensive data security program, subject to independent audits for 20 years; and (3) comply with COPPA. This is the FTC’s first COPPA case involving connected toys and the Internet of Things.
On December 12, 2017, the Federal Trade Commission hosted a workshop on informational injury in Washington, D.C., where industry experts, policymakers, researchers and legal professionals considered how to best characterize and measure potential injuries and resulting harms to consumers when information about them is misused or inappropriately protected. Continue Reading FTC Hosts Workshop on Informational Injury
Recently, the FTC and FCC announced their intent to enter into a Memorandum of Understanding (“MOU”) under which the agencies would coordinate their efforts following the adoption of the Restoring Internet Freedom Order (the “Order”). As we previously reported, if adopted, the Order would repeal the rules put in place by the FCC in 2015 that prohibit high-speed internet service providers (“ISPs”) from stopping or slowing down the delivery of websites and from charging customers extra fees for high-quality streaming and other services. Continue Reading FTC and FCC Announce Cooperation on Repeal of Net Neutrality Rules
Recently, FCC Chairman Ajit Pai released a draft of the Restoring Internet Freedom Order (the “Order”). If adopted, the Order would repeal the rules put in place by the FCC in 2015 that prohibit high-speed internet service providers (“ISPs”) from stopping or slowing down the delivery of websites and from charging customers extra fees for high-quality streaming and other services. Continue Reading FCC Releases Plan to Repeal Net Neutrality Rules
Recently, the Federal Trade Commission released the final agenda for a workshop being held on December 12, 2017, that will address the various consumer injuries that result from the unauthorized access to or misuse of consumers’ personal information. Continue Reading FTC Releases Agenda for Workshop on Consumer Informational Injuries
On November 8, 2017, Sears Holding Management Corporation (“Sears”) requested that the FTC reopen and modify a 2009 Commission Order (the “Order”) settling charges that Sears inadequately disclosed the scope of consumer data collected through the company’s software application. The initial FTC complaint alleged that Sears represented to consumers that its downloadable software application would track users’ “online browsing,” but in fact tracked nearly all of the users’ Internet behavior. Sears petitioned the FTC to modify the Order’s definition of “tracking system,” which the company contends is overbroad and impracticable. The FTC is seeking public comment on Sears’ petition, which it will receive until December 8, 2017.
On November 8, 2017, the FTC announced a settlement with Georgia-based online tax preparation service, TaxSlayer, LLC (“TaxSlayer”), regarding allegations that the company violated federal rules on financial privacy and data security. According to the FTC’s complaint, malicious hackers were able to gain full access to nearly 9,000 TaxSlayer user accounts between October 2015 and December 2015. The hackers allegedly used the personal information contained in the users’ accounts, including contact information, Social Security numbers and financial information, to engage in tax identify theft and obtain tax refunds through filing fraudulent tax returns. The FTC charged TaxSlayer with violating the Gramm-Leach-Bliley Act’s Safeguards Rule and Privacy Rule. Continue Reading FTC Announces Settlement with Tax Prep Service Over Financial Privacy and Security Violations
On October 23, 2017, the Federal Trade Commission issued a policy enforcement statement providing additional guidance on the applicability of the Children’s Online Privacy Protection Rule (“COPPA Rule”) to the collection of children’s audio voice recordings. The FTC previously updated the COPPA Rule in 2013, adding voice recordings to the definition of personal information, which led to questions about how the COPPA Rule would be enforced against organizations who collect a child’s voice recording for the sole purpose of issuing a command or request.
On October 19, 2017, the White House announced that President Donald J. Trump plans to nominate two individuals to serve as commissioners of the Federal Trade Commission. President Trump selected Joseph Simons to lead the FTC as its chairman for a seven-year term, beginning September 26, 2017. Simons’ background primarily has focused on antitrust matters. From June 2001 to August 2003, he led the FTC’s antitrust initiative as Director of the FTC’s Bureau of Competition.
On October 18, 2017, the EU Commission (“Commission”) released its report and accompanying working document on the first annual review of the EU-U.S. Privacy Shield framework (collectively, the “Report”). The Report states that the Privacy Shield framework continues to ensure an adequate level of protection for personal data that is transferred from the EU to the U.S. It also indicates that U.S. authorities have put in place the necessary structures and procedures to ensure the proper functioning of the Privacy Shield, including by providing new redress possibilities for EU individuals and instituting appropriate safeguards regarding government access to personal data. The Report also states that Privacy Shield-related complaint-handling and enforcement procedures have been properly established.