Privacy Report: FTC Takes Action Against Companies Falsely Claiming Compliance With International Privacy Agreements

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Federal US News

FTC Takes Action Against Companies Falsely Claiming Compliance With International Privacy Agreements

The FTC reached a settlement with a background screening company over allegations it falsely claimed to be a participant in the EU-US Privacy Shield program. In its complaint, the FTC alleges that SecurTest, Inc., falsely claimed on its website that it participated in the EU-US Privacy Shield and Swiss-US Privacy Shield frameworks. While the company initiated a Privacy Shield application in September 2017, it did not complete the steps necessary to be certified as complying with the frameworks, thus falsely representing that it was a certified participant on its website. In separate actions, the FTC also sent warning letters to more than a dozen companies for falsely claiming participation in other international privacy agreements—13 companies that falsely claimed participating in the old US-EU and US-Swiss Safe Harbor frameworks and 2 companies that claimed they were participants in the Asia-Pacific Economic Cooperation Cross-Border Privacy Rules. The FTC’s letter instructed the companies to remove from their websites, privacy policies, or any other public documents or statements that might be construed as claiming participation or involvement in these programs unless they prove that they have undergone the requisite review and certification. The FTC warned it would take appropriate legal action if the companies fail to provide a timely and satisfactory response.

Data Security Settlement With Service Provider Includes Updated Order Provisions

The FTC settled charges against DealerBuilt, a third-party service provider that sells software for auto dealers, with a proposed order that includes new provisions reflecting the current Commission’s priority of updating its data security orders. DealerBuilt had a number of security failures: no access controls, no written information security policy, no security training for employees or contractors, no periodic risk assessments, etc. To add insult to injury, a DealerBuilt employee bought a storage device and installed it on the company’s network in April 2015 to increase available backup storage. The device created an open connection port that allowed transfers of information. In October 2016, a hacker gained unauthorized access to DealerBuilt’s backup database through this port, including the unencrypted personal information of more than 12 million consumers that 130 of its client dealerships had stored with the company. DealerBuilt learned about the breach in November 2016, when a dealership called, demanding to know why customer data was publicly accessible on the internet. It wasn’t until a reporter told DealerBuilt about the security vulnerability that it became aware of the open port on its storage device. The proposed order requires a senior DealerBuilt officer to provide the FTC with annual certifications of compliance; and DealerBuilt to implement specific, enforceable safeguards that address the issues alleged in the complaint (e.g., conduct yearly employee training, monitor its systems for data security incidents, implement access controls, and inventory devices on its network). It also makes significant changes to further improve the accountability of the third-party assessor responsible for reviewing DealerBuilt’s data security program. What’s more, the order gives the FTC increased access to documents and other materials upon which the assessor bases his or her conclusions.

Online Advertisers Prepare for Privacy Law Storm

A push by federal and state lawmakers to give people more control over the use and sale of their personal information could upend the way online advertisers interact with consumers. As targeted advertising becomes more prevalent and concerns grow over how companies are handling the personal data they gather, lawmakers have responded by floating a number of pieces of state and federal legislation. The National Advertising Initiative, the Association of National Advertisers and other major industry players have countered by launching the Privacy for America coalition to push for national legislation that would focus on promoting responsible data usage rather than banning certain data practices. The coalition is pushing to identify and prohibit a set of practices that are deemed “unreasonable and worthy of punishment,” such as collecting sensitive data without consent and using data to make decisions on eligibility for things like credit and employment.

State US News

Maine Passes Bill Banning ISPs from Selling Consumer Data Without Consent

Maine’s governor signed into law one of the nation’s strongest privacy bills, the Act to Protect the Privacy of Online Consumer Information, which goes into effect on July 1, 2020 and would prohibit internet service providers (ISPs) in Maine from using, selling or distributing consumer data without their consent, and from refusing to serve a customer, penalizing them or offering a discount in order to pressure consumers into allowing the ISP to sell their data. Some privacy activists have described the Maine law as even stronger than California’s because it mandates that ISPs require explicit consent from customers to sell their personal data, while the CCPA requires consumers to request that their data not be sold by their own volition. The bill was sponsored by state senator Shenna Bellows, who said she is planning to introduce an internet privacy bill in the next session that would also target tech companies.

Right to be Forgotten Requests Under the CCPA

There is a great deal of confusion regarding the requirements of the CCPA. One important question is whether a company is required to delete records that show whether an individual opted-in or -out from marketing when it receives a right to be forgotten request. The answer is generally, no. Pursuant to the CCPA, when a business receives a verified consumer request to delete personal information it generally should “delete the consumer’s personal information from its records and direct any service providers to delete the consumer’s personal information from their records.” The “right to be forgotten,” however, is not an absolute right. The CCPA includes more than nine exceptions where a business can refuse a deletion request, four of which may apply to data evidencing a consumer’s opt-in or -out preferences: internal uses of the business; complying with business obligations; uses compatible with the context of collection; and exercise or defend legal claims.

Proposed NY Privacy Bill is Broader than CCPA

The New York Privacy Act, introduced by state senator Kevin Thomas, would give NY residents more control over their data than in any other state, giving New Yorkers the right to sue companies directly over privacy violations. It would also require businesses to act as so-called “data fiduciaries,” an emerging idea in privacy circles that would legally bar businesses from using data in a way that benefits their companies to the detriment of their users. The bill is still seeking a cosponsor in the state assembly, but Thomas says he is confident that he has majority support in the senate and hopes to pass the bill this summer. The draft is already facing staunch opposition from the tech industry.

EU News

GDPR Report Card Is In

The European Commission’s Expert Group to support the application of the GDPR has delivered its ‘1st Year Report’ based on answers to 11 key questions. Here are a few highlights from the report:

  1. The GDPR requires resources that aren’t always available.
  2. Guidance needs to be better and harmonized. Lack of harmonization hurts implementation.
  3. Closure is needed on the ePrivacy Regulation.
  4. There is a desire for standard processing agreements and updated SCCs for transfers.
  5. There has been patchy implementation by organizations in areas such as information rights.
  6. Regulators are generally very good. Most report broadly positive interactions with DPAs, which are overall constructive and solution-oriented.
  7. The rewards are real. Marketers have overall positively embraced the GDPR with the view that compliance is likely to improve customer sentiment towards brands in the long term and are using it as an opportunity to make data protection a brand asset.

UK Releases Report on Adtech and Real Time Bidding

The UK data protection authority, the ICO, has investigated how the adtech sector still uses personal data for the purposes of real-time bidding in programmatic advertising. In short: legitimate interest is a goner, adtech is flouting special-category data rule, and contractual agreements are worthless. The report will be circulated to the ad tech sector, and the ICO will check that its stipulations have been followed in six months’ time. Although the ICO hasn’t made any serious threats to businesses that don’t comply, it does intend for this additional clarity on certain areas of GDPR to be adhered to. The Irish DPA is also investigating many of the same issues raised in the report.

Discussing the Right of Access for Lawyers/Law Firms

Exemptions provided in Swiss and European data protection laws allow lawyers (or the law firm as the controller of the personal data) to balance conflicting interests. In particular, the right of direct access to personal data undergoing processing may adversely affect the individual data protection rights of others, the privacy and confidentiality interests of clients as well as the confidentiality of business secrets or intellectual property of clients, attorneys or third parties. In addition, the protection of the confidentiality of the attorney–client communication (and of work products) serves the public interest in safeguarding the legal system and access to courts. Granting data subjects direct access to documents that include the personal data undergoing processing (or providing information about the relevant processing) may impair the exercise or judicial enforcement of legal claims or interfere with an effective defense of the client. The Swiss Federal Data Protection Act and the GDPR allow controllers to limit the right to receive a copy of personal data undergoing processing if and to the extent it is required to protect the rights and freedoms of others. The Swiss Criminal Code, Swiss Federal Act on the Free Movement of Lawyers, and the GDPR allow controllers to exempt information from the obligation to provide information where the personal data must remain confidential subject to a statutory obligation of professional secrecy.

EDPB Completes Guidelines on Codes of Conduct, Certification and Accreditation of Certification Bodies

The European Data Protection Board (EDPB) adopted final versions of:

  1. The Guidelines 1/2019 on codes of conduct and monitoring bodies under Regulation 2016/679. These guidelines aim to provide practical direction and explanation regarding the application of Articles 40 and 41 GDPR. They set out an established framework that explains the procedures to be followed in submitting codes of conduct for approval, and how to provide criteria for approval of such codes.
  2. Annex 2 to the Guidelines on certification criteria in accordance with Articles 42 and 43 of the Regulation 2016/679. These guidelines aim to establish the primary criteria relevant to all types of certification mechanisms issued according to Articles 42 and 43 GDPR. Annex 2 specifically identifies a non-exhaustive list of minimum requirements that the EDPB and data protection authorities will consider for the approval of certifications.
  3. The annex to the Guidelines on accreditation of certification bodies under Article 43 of the Regulation 2016/679. These guidelines assist EU member states, regulators and national accreditation bodies in implementing the provisions of Article 43 GDPR in a consistent and harmonized manner. The annex provides guidance on the additional requirements to be submitted to the EDPB for approval in case accreditation bodies are established by supervisory authorities.

ICO Admits its Own Cookie Policy is Non-Compliant

The UK’s data protection authority admitted that its current consent notice relating to the use of cookies on devices failed to meet the GDPR standard. ICO confirmed it will be making changes to its cookie policy following complaints that its site was storing data without user consent. One complaint in particular alleged the automatic placing of cookies on a user’s mobile device was in breach of the Privacy and Electronic Communications Regulations (PECR) which sits alongside the GDPR. Article 6 of PECR prohibits the storage of or access to information held on a user’s device unless explicit consent is given. “We are currently in the process of updating this to align our use of cookies to the GDPR standard of consent and we will be making amendments to this information during the week commencing 24 June.”

Other Global News

NIST Announces 800-171 Update

The National Institute of Standards and Technology (NIST) announced a long-awaited update to Special Publication (SP) 800-171 Rev. 1, Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations. 800-171 Rev. 2 includes only “minor editorial changes,” including reordering the document and updating the contents of the Appendices. NIST emphasized that there are no changes to the basic or derived security requirements in Rev. 2. NIST also announced the publication of an entirely new document, SP 800-171B, Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations: Enhanced Security Requirements for Critical Programs and High Value Assets, which was drafted in response to “an ongoing barrage of serious cyber attacks,” resulting in the loss and/or exposure of controlled unclassified information (CUI) that, in turn, prompted the Department of Defense (DoD) to request additional guidance from NIST. 800-171B is described as a supplement to 800-171 Rev. 2 that contains recommended enhanced security requirements designed to protect designated “high value assets” or “critical programs” that contain CUI that are of interest to advanced persistent threats. NIST is seeking public comment on the initial drafts until July 19, 2019.

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.

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JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

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Collection of Information

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Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

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How is your information shared?

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How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. 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. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

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Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our 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 are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy 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 our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

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

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
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  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
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Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

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