Kentucky Enacts Data Breach Notice Law That Adds Extra Protection for Student Information while inBloom Withers

by Davis Wright Tremaine LLP
Contact

The world of the 1987 movie Robocop largely remains science fiction – except, perhaps the central character’s ability to access massive amounts of confidential personal data through the strike of a keyboard or even his helmet (was Robo’s mask the precursor to Google Glass?). Today, electronically sharing sensitive personal information – from credit card and Social Security numbers to medical information and family history – has become so commonplace that many of us rarely give it a second thought. Yet the widespread use of confidential information has created a tension between states that wish to protect their citizens from identity theft and those companies looking to use that information in inventive ways to meet evolving industry demands and consumer expectations for customized experiences.

On April 17, Kentucky Governor Steve Beshear signed H.B. 232, a data breach notification law requiring companies to alert the state’s residents of unauthorized access to their personal information. Kentucky is now the 47th state in the Union to enact a data breach notice law – Alabama, New Mexico and South Dakota remain the only states not to have such a statute on their books. A copy of the statute can be found here, and a summary can be found at DWT’s online compilation of all similar statutes. H.B. 232 was signed into law the same day as H.B. 5, a separate bill similarly mandating that state agencies notify Kentucky citizens when their personal information held by the state is compromised. Both laws come at a time when privacy concerns over sensitive data are driving states to protect their citizens’ personal information from unauthorized access.

Like many state data breach laws, H.B. 232 requires companies to notify affected persons “without unreasonable delay” when “unauthorized access to their personal information results in actual identity theft or fraud, or if the company reasonably believes that the breach ‘has caused or will cause identity theft or fraud.’” Companies must also alert major credit reporting agencies if there is a breach that affects 1,000 or more Kentucky residents. “Personally identifiable information” under the statute includes “an individual’s first name or last name in combination with any of the following: Social Security number; driver’s license number; or account number, credit card number, in combination with any required security code, access code or password that would permit access to an individual’s financial account.”

H.B. 232 goes beyond typical data protection legislation, however, and contains a separate provision that restricts the ways in which “student data” stored on cloud systems can be used. H.B. 232 prohibits cloud providers from processing stored student data (defined to include not only information identifying the student, but also “any documents, photos, or unique identifiers relating to the student”) without parental permission for “any purpose other than providing, improving, developing, or maintaining the integrity of its cloud computing services.”  The law thus restricts the activities of not only cloud services developed specifically for academic use, but also broadly available free services like Google Docs that are used by many schools. Kentucky’s strong restriction against sharing student information without direct parental permission stands in contrast to the FTC’s recent guidance in its updated COPPA FAQs that outline permissible uses and allow schools to consent to the disclosure of children’s personal information on behalf of parents.

Simultaneously, privacy concerns are putting economic pressure on firms that are looking to use such sensitive information to meet new data sharing demands. As the New York Times reported on April 21, inBloom, “a non-profit corporation offering to warehouse and manage student data for public school districts” nationwide via a cloud storage system, announced it is shutting down. The non-profit’s collection and storage of student data – from family relationships to Social Security numbers – was meant to help teachers across the country track individual student progress; instead it raised concern amongst parents, and led some school districts and states to withdraw from their relationships with inBloom and similar providers.

In announcing inBloom’s closing, chief executive Iwan Streichenberger stated that “[i]t is a shame that the progress of this important innovation has been stalled because of generalized public concerns about data misuse, even though inBloom has world-class security and privacy protections that have raised the bar for school districts and the industry as a whole.”

While some innovation in academic progress may be stunted because of inBloom’s demise, the generalized privacy concerns over data misuse that led to its downfall remain very real. Just one day after inBloom’s closure was announced, Iowa State University disclosed that Social Security numbers of close to 30,000 individuals who were enrolled between 1995 and 2012 have been compromised. While officials do not think that the hack’s purpose was to obtain personal information, that may be little comfort to current and former students whose SSNs were accessed.

Then, just yesterday, Google announced that it was permanently disabling ads in Apps for Education services and removing all ads scanning in Gmail for Apps for Education. Like inBloom, Google’s Apps for Education are designed to enhance students’ quality of education – in Google’s case, by providing products like email, word processing, calendaring, spreadsheet and document sharing to K-12 and higher education institutions for free. Yet Google’s decision comes as it was facing a backlash for automatically scanning and indexing emails of Apps for Education users to deliver targeted advertisements to its users, as well as legal pressure from lawsuits alleging the company’s practice of scanning user emails violated anti-wiretapping laws. Given the diversity of Google’s services and its brand recognition, it will likely weather the criticism it has faced over user privacy better than inBloom.

All of these developments show that consumers and governments are struggling with how much personal data – and in what contexts – companies should be allowed to collect and use, even if such use is ostensibly for the benefit of consumers.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Davis Wright Tremaine LLP | Attorney Advertising

Written by:

Davis Wright Tremaine LLP
Contact
more
less

Davis Wright Tremaine LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.