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On January 18, the Federal Trade Commission (“FTC”) released its Privacy & Data Security Update: 2017, describing its activities in the areas of consumer privacy and data security during the past year.

The report highlights the breadth of the FTC’s enforcement actions, both under Section 5 of the FTC Act, which prohibits unfair or deceptive…

Over the last year, the existential risk posed by cyberattacks and data security vulnerabilities has become one of the top concerns for boards of directors, management, government agencies, and the public.

This memo surveys some of the key cybersecurity and data privacy developments of 2017, including the major data breaches and cyberattacks, regulatory and legislative

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The new mandatory personal data breach notification regime introduced by the GDPR should be a key area of focus for organizations seeking to put in place GDPR compliance programs.  Personal data breaches are not only increasingly frequent and on the front pages, they are also one of the most likely causes of complaints being made by individuals against an organization and most likely subjects of investigation by data protection authorities (“DPAs”).  Regardless of whether an organization is at fault in allowing a breach to occur, its response will materially affect the impact of the breach on data subjects, and therefore the potential consequences for the organization itself.  Personal data breach management – of which breach notification forms a large part – should therefore be a priority area in any organization’s compliance efforts, including with respect to the GDPR. 
Continue Reading Notification of data breaches under the GDPR – 10 Frequently Asked Questions

On December 27, 2017, the New York Secretary of State sent a demand letter to Equifax Inc.’s interim CEO requesting additional information to aid the Division of Consumer Protection’s efforts “to investigate, mediate and/or mitigate identity theft complaints from consumers generally” as well as its investigation into the data breach disclosed by Equifax, Inc. on July 29, 2017, in which the personal data of approximately 143 million individuals (including 8.4 million New York residents) was compromised.  The letter demands that Equifax, Inc. provide a direct contact to respond to consumer concerns and requests information in 10 categories, including (a) a summary of the credit reporting agency’s plan (if any) to make affected New York residents “whole” following the breach, (b) a copy of the forensic review prepared by the cybersecurity firm Mandiant, (c) New York-specific data for those consumers whose credit card details or dispute documents containing personally identifiable information were exposed in the breach and (d) the number of children 15 years old and younger affected by the breach, nationwide as well as within New York, and the “long-term protection response” (if any) created for such affected children.  The demand was made pursuant to emergency regulations adopted by the Department of State in December 2017 that require credit reporting agencies to respond to requests made by the Division of Consumer Protection within 10 business days.  A company spokesperson for Equifax, Inc. confirmed on January 4, 2018 that the credit reporting agency intends to respond to the demand letter within the required time period.  This demand is the latest development in a plethora of investigations by various law enforcement agencies and regulators into the breach and follows requests for information from all 50 state attorneys general as well as a subpoena from the New York Department of Financial Services (“DFS”).
Continue Reading New York Regulator Demands Additional Information from Equifax

A recent decision by an intermediate Illinois appellate court, Rosenbach v. Six Flags Entm’t Corp.,[1] suggests that state courts—which are not bound by federal Article III standing limitations in entertaining suits—will not necessarily provide a more plaintiff-friendly forum for data privacy suits than their federal counterparts.

Earlier this month, we wrote about the Second Circuit’s summary order in Vigil v. Take-Two Interactive Software, Inc.[2]  There, the court affirmed the dismissal of a class action lawsuit brought in the Southern District of New York under the Illinois Biometric Information Privacy Act[3] (“BIPA”) for want of Article III standing because the plaintiffs had failed to allege an injury-in-fact, but remanded the case with instructions to amend the judgment and enter a dismissal without prejudice.[4]  The district court had ruled that the BIPA’s limitation of the private right of action to a “person aggrieved by a violation” meant that the plaintiffs’ failure to allege an injury-in-fact was also fatal to their claims as a matter of state law, meaning that the case should be dismissed with prejudice for failure to state a claim.[5]  The Second Circuit vacated that portion of the ruling on jurisdictional grounds, which left the door open for the plaintiffs to attempt to bring their claims in state court without any allegation of actual harm.
Continue Reading Illinois Appellate Court Holds That Mere Technical Violations Of Data Privacy Statute Are Insufficient To State A Claim

In late November, the Second Circuit issued a summary order in Vigil v. Take-Two Interactive Software, Inc,[1] which affirmed the dismissal of a class action lawsuit brought in the Southern District of New York under the Illinois Biometric Information Privacy Act (“BIPA”) for lack of standing.[2]  In doing so, the court followed established Second Circuit precedent and highlighted the continuing difficulties plaintiffs face in establishing standing for certain technical violations of data privacy statutes, when those violations are unaccompanied by allegations of a breach or likelihood of improper access.  The case also serves as a reminder that as states pass statutes covering new types of technology and data, companies will need to remain vigilant in protecting a wider range of information than before.
Continue Reading Second Circuit Issues Order Affirming Dismissal of Data Privacy Class Action Suit

Since the adoption of the General Data Protection Regulation (GDPR) in 2016, considerable attention has focused on the vastly increased scope of potential administrative fines, and even more attention is being paid to the issue with the GDPR becoming effective on May 25, 2018.  In this post, we summarize the key fining provisions, and analyze the recent relevant guidance on this issue from the Article 29 Working Party (an advisory group consisting of representatives from national data protection authorities together with the European Commission).
Continue Reading Administrative Fines Under the GDPR

Following the generally positive assessment of the EU-U.S. Privacy Shield framework (the “Privacy Shield”) by the European Commission further to its first annual review, the Article 29 Working Party (an advisory group consisting of representatives from national data protection authorities together with the European Commission), released its own opinion (the “WP29 Opinion”), which was…

Earlier this month, on November 2, New York Attorney General Eric T. Schneiderman announced that he was working with New York state legislators to introduce comprehensive new legislation to address data breaches and data privacy.  After pointing to the Equifax breach as the impetus of the legislation, the Attorney General’s Office also explained that it had received over 1,300 data breach notifications in 2016, affecting 1.6 million New Yorkers.  To address these issues, the proposed Stop Hacks and Improve Electronic Data Security (SHIELD) Act would require companies to take steps to protect private information, broadens the type of private information covered, and increases potential penalties for failures to comply with the law.  This post summarizes the key aspects of the proposed legislation, and compares it to other recently enacted data privacy legislation.
Continue Reading In Wake of the Equifax Breach, New York’s Attorney General Proposes New, Stricter Data Privacy Law

On October 18, the Consumer Financial Protection Bureau (the “CFPB”) released the Consumer Protection Principles: Consumer-Authorized Financial Data Sharing and Aggregation (the “Principles”).  The Principles represent a cautious step forward by the CFPB in providing guidance on how institutions holding customer accounts (such as banks) should share information with service providers, including “fintech” companies that obtain customer authorization to access their account information in order to provide services to such customers.  Such data aggregation-based service providers can provide useful products and services to consumers, such as fraud screening, identity verification, personal financial management and bill payment, and promote competition in the financial services market.  With respect to fraud screening and identity verification services in particular, in the aftermath of the recent Equifax breach, the appeal of such services is obvious.  However, with additional sharing of data comes additional risks—the increase in data access points, albeit consumer-authorized, presents new challenges from a cybersecurity and privacy perspective, increasing the possibility of consumers inadvertently losing control of their information.
Continue Reading CPFB Releases Consumer Protection Principles for Consumer-Authorized Financial Data Sharing and Aggregation