Privacy & Information Security Law Blog

On September 26, 2018, the SEC announced a settlement with Voya Financial Advisers, Inc. (“Voya”), a registered investment advisor and broker-dealer, for violating Regulation S-ID, also known as the “Identity Theft Red Flags Rule,” as well as Regulation S-P, the “Safeguards Rule.” Together, Regulations S-ID and S-P are designed to require covered entities to help protect customers from the risk of identity theft and to safeguard confidential customer information. The settlement represents the first SEC enforcement action brought under Regulation S-ID.

The U.S. Department of Commerce’s National Institute of Standards and Technology recently announced that it is seeking public comment on Draft NISTIR 8228, Considerations for Managing Internet of Things (“IoT”) Cybersecurity and Privacy Risks (the “Draft Report”). The document is to be the first in a planned series of publications that will examine specific aspects of the IoT topic.

On September 30, 2018, the U.S., Mexico and Canada announced a new trade agreement (the “USMCA”) aimed at replacing the North American Free Trade Agreement. Notably, the USMCA’s chapter on digital trade recognizes “the economic and social benefits of protecting the personal information of users of digital trade” and will require the U.S., Canada and Mexico (the “Parties”) to each “adopt or maintain a legal framework that provides for the protection of the personal information of the users[.]” The frameworks should include key principles such as: limitations on collection, choice, data quality, purpose specification, use limitation, security safeguards, transparency, individual participation and accountability.

On September 26, 2018, the U.S. District Court for the District of Colorado ("the Court") refused to dismiss all putative class claims against Chipotle Mexican Grill, Inc. (“Chipotle”). This litigation arose from a 2017 data breach in which hackers stole customers’ payment card and other personal information by using malicious software to access the point-of-sale systems at Chipotle’s locations. 

Recently, the French Data Protection Authority (“CNIL”) published its initial assessment of the compatibility of blockchain technology with the EU General Data Protection Regulation (GDPR) and proposed concrete solutions for organizations wishing to use blockchain technology when implementing data processing activities.

On September 28, 2018, California Governor Jerry Brown signed into law two identical bills regulating Internet-connected devices sold in California. S.B. 327 and A.B. 1906 (the “Bills”), aimed at the “Internet of Things,” require that manufacturers of connected devices—devices which are “capable of connecting to the Internet, directly or indirectly,” and are assigned an Internet Protocol or Bluetooth address, such as Nest’s thermostat—outfit the products with “reasonable” security features by January 1, 2020; or, in the bills’ words: “equip [a] device with a reasonable security feature or features that are appropriate to the nature and function of the device, appropriate to the information it may collect, contain, or transmit, and designed to protect the device and any information contained therein from unauthorized access, destruction, use, modification, or disclosure[.]”

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.

On September 26, 2018, the Centre for Information Policy Leadership (“CIPL”) at Hunton Andrews Kurth LLP submitted formal comments to the Indian Ministry of Electronics and Information Technology on the draft Indian Data Protection Bill 2018 (“Draft Bill”).

On September 26, 2018, the U.S. Department of Commerce’s National Telecommunications and Information Administration (“NTIA”) announced that it is seeking public comments on a proposed approach to advancing consumer privacy. The approach is divided into two parts: (1) a set of desired user-centric privacy outcomes of organizational practices, including transparency, control, reasonable minimization (of data collection, storage length, use and sharing), security, access and correction, risk management and accountability; and (2) a set of high-level goals that describe the outlines of the ecosystem that should be created to provide those protections, including harmonizing the regulatory landscape, balancing legal clarity and the flexibility to innovate, ensuring comprehensive application, employing a risk and outcome-based approach, creating mechanisms for interoperability with international norms and frameworks, incentivizing privacy research, ensuring that the Federal Trade Commission has the resources and authority to enforce, and ensuring scalability.

On September 26, 2018, the U.S. Senate Committee on Commerce, Science, and Transportation convened a hearing on Examining Consumer Privacy Protections with representatives of major technology and communications firms to discuss approaches to protecting consumer privacy, how the U.S. might craft a federal privacy law, and companies’ experiences in implementing the EU General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act (“CCPA”).