Privacy & Information Security Law Blog

On December 12, 2011, the United States Court of Appeals for the Third Circuit affirmed a decision that employees of Ceridian Corporation's (“Ceridian's") customers did not have standing to sue Ceridian after the payroll processing firm suffered a data breach.

On January 6, 2012, the United States District Court for the District of Massachusetts granted Michaels Stores, Inc.’s (“Michaels”) a motion to dismiss against a customer-plaintiff who alleged that Michaels’ in-store information collection practices violated Massachusetts law. Although the court ruled in Michaels’ favor, it found that customer ZIP codes do constitute personal information under Massachusetts state law when collected in the context of a credit card transaction. 

According to a spokesperson at the European Commission, the publication of the proposal for the review of the EU Data Protection Directive (95/46/EC) has been postponed until late February or March 2012. The draft proposal was scheduled to be officially released in late January after it was leaked in December 2011. According to various sources, the proposal received negative responses from several Directorates-General over the course of the “inter-service consultation,” some of whom have voiced their concern that the proposed new framework would be stricter than the current legal framework and thus may have a negative impact on businesses. For example, parts of the proposal, such as the right to be forgotten, are viewed by some as potentially too burdensome for companies.

On January 5, 2012, the Federal Trade Commission announced a proposed settlement with Upromise, Inc., a membership reward service that gives cash rebates for college savings accounts to members who purchase products and services from its partner merchants. The FTC alleged that the “Personalized Offers” feature on the Upromise TurboSaver Toolbar (1) collected far more information about users’ browsing behavior than was disclosed at the time of installation, and (2) contrary to representations in the company’s privacy notice, transmitted that information, which included data such as Social Security numbers and financial account numbers, in clear text.

The U.S. Department of Commerce has confirmed that the European Commission will host this year’s Safe Harbor Conference in Washington, D.C., on March 19, 2012. The venue marks a change from the tradition of previous sessions which have taken place in the host authority’s capital city (Washington, D.C. or Brussels). The Conference will follow the release of the European Commission’s draft revisions to the EU Data Protection Directive 95/46, which are expected on or around January 25, 2012. The widely leaked draft of the proposal does not contain language pertaining to the ...

On December 23, 2011, the Federal Trade Commission announced that it is seeking public comments on the privacy and security implications raised by the use of facial recognition technology. The FTC recently held a public workshop entitled “Face Facts: A Forum on Facial Recognition Technology,” that discussed the current and future commercial applications of facial recognition technologies and the associated privacy and security concerns.

On December 13, 2011, the Information Commissioner issued updated guidance on compliance with recent changes to UK law governing the use of cookies (The Privacy and Electronic Communications (EC Directive) (Amendment) Regulations 2011 (“Regulations”)). Organizations were given a twelve-month grace period to comply with the new law. Initial guidance on the Regulations was released on May 9, 2011, but the Information Commissioner characterized that guidance as merely a “starting point for getting compliant rather than a definitive guide,” signaling that further advice would follow if appropriate. 

On December 21, 2011, Mexico issued the final version of its Regulations of the Federal Law for the Protection of Personal Data Held by Private Parties (Reglamento de la Ley Federal de Protección de Datos Personales en Posesión de los Particulares). The regulations, which contain mostly minor changes to the prior draft that was released in October, will take effect on December 22, 2011. Notable updates in this final draft include:

• clarification of notice and consent requirements;
• changes to restrictions on cloud computing;
• updates to requirements regarding data transfers; and

On December 8, 2011, the Article 29 Working Party (the “Working Party”) adopted an Opinion on the European Advertising Standards Alliance (“EASA”) and IAB Europe best practice recommendations for the online behavioral advertising (“OBA”) industry to comply with Article 5.3 of the revised e-Privacy Directive 2002/58/EC (the “cookie clause”). The cookie clause requires a user’s informed consent for the use of cookies and similar technologies that store and access information in the user’s terminal device. Finding practical ways of complying with the cookie clause has proven challenging for the OBA industry, which relies heavily on these kinds of tracking mechanisms.

On November 30, 2011, Tracy Kitten, Managing Editor of BankInfoSecurity, interviewed Lisa J. Sotto, partner and head of the Global Privacy and Data Security practice at Hunton & Williams LLP. Discussing how data breaches can be game changers for organizations that suffer major incidents, Sotto emphasized that companies need to consider both the legal compliance issues involved with data breaches and potential reputational risks. Sotto also addressed how attorneys can play a key role in helping companies through the process.

Read the interview transcript or listen to the ...