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DataSecurityLaw.com is the firm’s resource for the latest news, analysis, and thought leadership in the critical area of privacy and cybersecurity law. Patterson Belknap’s Privacy and Data Security practice provides public and private enterprises, their leadership teams and boards with comprehensive services in this critical area. Our team of experienced litigators, corporate advisors and former federal and state prosecutors advises on a broad range of privacy and data protection matters including cyber preparedness and compliance, data breach response, special board and committee representation, internal investigations, and litigation.

Consumer Reports Opposes Efforts to Delay CCPA Enforcement Due to COVID-19

Businesses, consumers, and regulators continue to grapple with balancing privacy, cybersecurity, and the response to the COVID-19 pandemic. Last week, this blog explored the increased cyber risks that the pandemic poses to businesses, providing guidance on how businesses can navigate that risk. Yesterday, we reported on a joint letter filed by more than 30 industry groups to the California Attorney General (“AG”) requesting a delay in enforcement of the California Consumer Privacy Act (“CCPA”) due to the burdens that COVID-19 is placing on businesses. Enforcement of the CCPA is currently scheduled to commence as early as July 1, 2020. Earlier this week, Consumer Reports, a consumer advocacy group, urged the AG to reject industry efforts to delay enforcement of the CCPA.

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Industry Groups Request Delay in CCPA Enforcement Due to COVID-19

On March 17, 2020, a group of thirty-two trade associations and two corporations formally requested that the California Attorney General (AG) delay enforcement of the California Consumer Privacy Act (CCPA) until January 2, 2021, due to the ongoing COVID-19 pandemic. The trade associations represent leading companies in a wide range of industries, including healthcare and pharmaceuticals, transportation, logistics, advertising, insurance, entertainment, real estate, banking and finance, and technology.

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DFS Extends Cybersecurity Certification Deadline to June 1, 2020

In response to the COVID-19 pandemic, the New York Department of Financial Services (DFS) recently extended by 45 days the deadline for companies to certify compliance with the DFS cybersecurity regulation.  The annual certification is now due on June 1, 2020

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Cyber Risk and COVID-19: Practical Guidance for Secure Remote Working

In recent years, cyber-attacks have continued to increase in number and scope, with businesses facing ever-growing threats from ransomware, distributed denial-of-service attacks, and phishing schemes.  Ransomware attacks alone saw a 41 percent increase in 2019 from 2018, with more than 200,000 organizations and city governments suffering attacks.  Today, all eyes are on the spread of COVID-19, both in the U.S. and globally.  Unfortunately, as the world focuses on public health and economic uncertainty, cyber criminals see opportunities for exploitation. 

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CCPA Update: California AG’s Modified Proposed Regulations

This is the fourth post in our series discussing the practical impact of the California Attorney General’s regulations to the California Consumer Privacy Act (CCPA). See our previous CCPA posts here.

The CCPA took effect on January 1, 2020, and already a putative class action has been filed, albeit over a data breach that allegedly occurred before the CCPA’s effective date. In addition, although the statute is now operative, its implementing regulations remain in flux. On February 7, 2020, the California Attorney General (AG) issued a notice of modification to the proposed regulations originally issued in October 2019. And on March 11, 2020, the AG released a second set of modifications. These modifications—published in a clean and redline version—contain important updates clarifying notice requirements, consumer request acceptance and response obligations, service provider responsibilities, and when discrimination related to financial incentives is permissible.

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The SEC Issues Observations on Cybersecurity and Resiliency Measures

Last week, the U.S. Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (“OCIE”) issued a list of recommendations for institutions to enhance their cybersecurity preparedness and operational resiliency.  These observations – based upon the examination of thousands of SEC registrants – serve as a lens into the likely subjects of future SEC examinations.

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Court Approves Historic Equifax Data Breach Settlement

The aftermath from one of the largest data breaches in U.S. history is nearing the end, as the presiding judge approved a proposed class action settlement resolving claims arising from Equifax’s September 2017 data breach.  As previously reported, approximately 147.9 million U.S. consumers’ personal information was compromised by that breach.

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CCPA Update: Key Proposed Regulations on Verification of Requests & Non-Discrimination

On January 1, 2020, the California Consumer Privacy Act (CCPA) becomes operative.  As we reported last month, the California Attorney General (AG) released long-awaited draft regulations to the CCPA. This is the third installment in a series of posts discussing the regulations most relevant to companies as they determine whether they are covered under the law and how to comply.  This post discusses the key regulations on business verification of requests made by consumers and the non-discrimination provision of the CCPA. 

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CCPA Update: Key Proposed Regulations for Business Practices for Handling Consumer Requests

As we recently reported on this blog, the California Attorney General (AG) released long-awaited draft regulations to the California Consumer Privacy Act (CCPA). This is the second installment in a series of posts discussing the regulations most relevant to companies as they determine whether they are covered under the law and how to comply. This post discusses business practices for receiving and verifying consumer requests to delete or opt-out, and for disclosure of specific information, referred to in the regulations as “requests to know.”

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CCPA Update: Key Proposed Notice and Privacy Policy Regulations

As we recently reported on this blog, the California Attorney General (AG) released long awaited draft regulations to the California Consumer Privacy Act (CCPA). The regulations provided clarity on several provisions in the law, while also failing to answer some open questions. In a series of upcoming blog posts, we will discuss the regulations most directly relevant to companies as they determine whether they are covered under the law and how to comply. This first post discusses the notices and privacy policies described in detail in the proposed regulations.

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CCPA Update: California Attorney General Releases Proposed Regulations

On October 11, 2019, the California Attorney General released its long-anticipated Notice of Proposed Rulemaking Action and the text of its proposed regulations for the California Consumer Privacy Act (CCPA), along with an Initial Statement of Reasons for the proposed regulations.  The documents are not a short read, with the proposed regulations covering 24 pages, the Notice 16 pages, and the Statement of Reasons another 47 pages. 

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FDA Issues Updated Guidance on Medical Apps Oversight

Last month, the Food & Drug Administration (FDA) issued a long-awaited revision to its Policy for Device Software Functions and Mobile Medical Applications Medical App - Guidance for Industry and Food and Drug Administration Staff (the Guidance).  The revised Guidance was among several newly announced policies aimed at advancing the FDA’s digital health initiative that promotes innovation, while also permitting efficient and up-to-date regulatory oversight.

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A New Era of COPPA Enforcement?

Earlier this month, YouTube and its parent company, Google, entered into a record $170 million proposed settlement to resolve allegations brought by the Federal Trade Commission (FTC) and the New York Attorney General (NYAG) under the federal Children’s Online Privacy Protection Act (COPPA). According to the complaint in the case, YouTube collected personal information on video channels directed to children without parental consent using persistent identifiers that can track individuals across the Internet. This is the largest penalty to date in a COPPA enforcement action.

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Amendments to the California Consumer Privacy Act: Six Clarifications

As readers of the Data Security Blog will know, the California Consumer Privacy Act (“CCPA”) becomes operative on January 1, 2020.  The CCPA is the most sweeping consumer privacy law in the United States, covering most for-profit businesses that do business in California and collect the personal information of “consumers,” meaning California residents. 

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SEC’s Proposed Revisions to Regulation S-K Will Minimally Impact Cybersecurity Disclosure Requirements

It has been thirty years since the Securities and Exchange Commission (the “SEC”) significantly revised Regulation S-K, which sets forth reporting requirements for public companies. The SEC is now taking a fresh look at the rules, proposing for public comment amendments to modernize the description of business, legal proceedings, and risk factor disclosures that public companies must make. This represents a good opportunity to revisit key disclosure requirements—including Items 503(c) (now Item 105), 101, and 103—that are the subject of the revised guidance and that potentially impact reporting obligations associated with cybersecurity.

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Home Depot Joins Facebook and Others in Facing Suit for Scanning Faces

This past week, The Home Depot, Inc. became the latest business hit with a class action lawsuit for their use of facial recognition security cameras allegedly in violation of the Illinois Biometric Information Privacy Act.  If successful, Home Depot faces statutory damages of up to $5,000 for each time a shopper’s information was collected in violation of BIPA.

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Capital One Hack Prosecution Raises New and Old Questions about Adequacy of CFAA

On August 28, 2019, almost a month after Paige A. Thompson was arrested based on allegations that she hacked into servers rented by Capital One Financial Corporation, a criminal indictment was returned charging her with one count each of computer and wire fraud, as well as forfeiture allegations.  The indictment includes new allegations that, in addition to hacking Capital One’s data, Thompson illegally accessed and copied data from more than 30 different entities that rented or contracted servers at an unnamed cloud-computing company at which she previously worked.  The indictment provides additional details concerning Thompson’s hacking scheme.  According to the indictment, Thompson used devices that allowed her to scan servers rented or contracted by Capital One and other entities at the cloud-computing company.  From the scans, Thompson was able to identify servers that had firewall misconfigurations, which she then exploited to obtain security credentials that allowed her to access and copy the entities’ data.  In addition to copying the data, Thompson also used the stolen computing power of the servers to mine cryptocurrency—in a scheme colloquially known as “cryptojacking.” 

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The Perils of Sharing Privileged Communications with Third-Party Vendors

On May 6, 2019, Magistrate Judge Gorenstein issued an order that should be a wake-up call for attorneys contemplating hiring and sharing privileged communications with an outside public relations firm.  This decision also has wider implications, especially for companies engaging a forensic consultant to assist in responding to a cyber incident or data breach.

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A Closer Look at the CCPA’s Private Right of Action and Statutory Damages

The California Consumer Privacy Act (CCPA) has significantly altered the potential consequences of a data breach under California law by permitting California consumers to bring civil suits for statutory damages, Cal. Civ. Code § 1798.150(a)(1), and to seek statutory damages of between $100 and $750 “per consumer per incident or actual damages, whichever is greater.” Id. § 1798.150(a)(1)(A). The ability to seek statutory damages is in addition to injunctive or declaratory relief. Id. § 1798.150(a)(1)(B),(C).

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New York’s SHIELD Act Is Signed Into Law

Last Thursday, Governor Cuomo signed New York’s latest data security bill – the Stop Hacks and Improve Electronic Data Security, or “SHIELD” Act.  The Act, which we have followed on this blog since November 2017, imposes new notification obligations on businesses managing private data when a security breach occurs.  Capital One’s recent breach underscores the significance of the changing regulatory landscape, as both businesses and the government attempt to navigate and protect against large-scale cybersecurity attacks, and the importance of understanding notification obligations, should those efforts fail.

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An Old Hack Comes Back to Haunt (Newly-Public) Slack

Last Thursday, Slack Technologies, Inc. (Slack) announced that it would reset passwords for a number of accounts compromised by a security breach that occurred more than four years ago, in March 2015. Slack—a fast-growing messaging service that launched in 2014 and went public last month—provided little explanation for its delay in action and minimized the scope of the incident, claiming that it only affected a small percentage of current Slack users. The narrow scope and timing of Slack’s disclosure raise interesting questions about the heightened scrutiny public companies now face when dealing with cybersecurity incidents.

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D.C. Circuit Breathes New Life into OPM Data Breach Litigation

The U.S. Office of Personnel Management (“OPM”) made headlines when several hacks of confidential data came to light in 2015, intrusions that compromised the personal data of over 20 million individuals. On July 21, 2019, in AFGE v. OPM (In re United States OPM Data Sec. Breach Litig.), Nos. 17-5217, 17-5232, 2019 U.S. App. LEXIS 18609 (D.C. Cir. June 21, 2019), a divided panel of the United States Court of Appeals for the D.C. Circuit breathed new life into litigation stemming from those breaches and injected yet another piece into the growing puzzle surrounding constitutional standing in breach litigation. The case had previously been dismissed after a district court held that the plaintiffs lacked standing based on their failure to allege concrete injuries. In a divided opinion, the D.C. Circuit panel reversed, holding that the plaintiffs’ allegations of potential future harm were sufficient for the case to move forward.

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New York’s SHIELD Act Heads to the Governor’s Desk

The New York State Senate recently passed The Stop Hacks and Improve Electronic Data Security Act, or SHIELD Act, leaving only the Governor’s signature as the final step to the SHIELD Act becoming the country’s newest—and one of the most stringent—breach notification laws.  Given Governor Cuomo’s previous support for robust cybersecurity protections, New York may soon join a growing number of states beefing up their notification statutes.

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A Shield From Cyber Liability: Beyond the Statute

Part 3 in a 3-Part Series

As we’ve written about in the past, the SAFETY Act has the potential to help companies mitigate their risk from cyber-terrorism.  As previously noted, the statute has never been fully tested in courts, so the full contours of its protection remain uncertain. Nonetheless, the benefits of SAFETY Act approval may extend well beyond those mandated by Congress: to the right company, SAFETY Act approval could be a significant market differentiator and, in the right circumstances, could be a powerful tool in litigation even when the Act does not itself apply.

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Patterson Belknap Mourns the Loss of Partner Craig A. Newman

Patterson Belknap Webb & Tyler LLP is deeply saddened to announce the passing of our partner and friend Craig A. Newman, the founding editor of the Data Security Law Blog. Craig was a litigation partner with Patterson Belknap from 2015 to 2019 and served as chair of the Firm’s Privacy & Data Security practice. He was a source of wisdom, warmth and humor, and will be missed. More information can be found on the Firm’s website here.

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New York Launches Cybersecurity Unit

Today, New York’s top financial regulator, the Department of Financial Services, announced the formation of a dedicated “Cybersecurity Division.” In a news release issued earlier today, the agency said the new division “will focus on protecting consumers and industries from cyber threats ….”

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Amazon Sellers Hit With Phishing Scheme

Hackers have managed to break into the accounts of 100 sellers at Amazon.com. The hackers funneled money from the seller’s accounts—either from sales or loans—into their own bank accounts after stealing seller credentials. It is not clear how much money was stolen in the incident.

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Executive Order: Cybersecurity Skill Gap in Federal Government

Last week President Trump issued an executive order targeted at improving the quality of the federal government’s cybersecurity workforce. The executive order—which acknowledges the shortage of qualified employees for cybersecurity jobs—would implement a number of steps to strengthen and expand cyber knowledge within the federal government.

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A Shield From Cyber Liability: Diving Deeper Into the SAFETY Act

Part 2 in a 3-Part Series

As we’ve discussed in previous posts, the SAFETY Act has the potential to serve as a valuable tool for companies looking to mitigate risk from cyber-terrorism. This is part two of a three-part series; be sure to read part one, which describes how the SAFETY Act applies to cybersecurity.

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FBI Reports An Increasing Rate Of Internet-Facilitated Crime

The FBI’s Internet Crime Complaint Center, better known as IC3, released its 2018 Internet Crimes Report.  For those unfamiliar with the IC3, it was established by the FBI in May 2000 as a central repository for public complaints of internet-based crimes. Since its inception, IC3 has received more than 4 million complaints. To facilitate law enforcement efforts and promote public awareness, IC3 analyzes the complaints it receives and disseminates information to the public and law enforcement. Among other things, it identifies trending scams, refers scams that do not meet federal law enforcement thresholds to state and local law enforcement, and provides victim services. New in 2018, IC3 created the Recovery Asset Team to help victims of internet-facilitated schemes recover funds and the Victim Specialist-Internet Crime position to provide crisis intervention, needs assessments, and referrals.

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After a Year on the Books, DOJ Releases White Paper on CLOUD Act

In its first official statement about the CLOUD Act – the Clarifying Lawful Overseas Use of Data Act – the U.S. Department of Justice has published a white paper, “Promoting Public Safety, Privacy and the Rule of Law Around the World:  The Purpose and Impact of the CLOUD Act,” discussing its view on the law enacted in March 2018. The CLOUD Act, established revised procedures for government requests for data held by technology companies outside of the U.S.

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Online Trust Alliance Audit Hands Feds Rare Honor

The federal government’s record for effective cyber defenses of its own websites has not been stellar over the past few years. Federal government agencies ranging from the Office of Personnel Management to the National Archives have suffered data breaches, as have nearly a dozen other agencies.

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Part III: Our Last Look at the CCPA’s Definition of “Personal Information”

In our third and final installment on the California Consumer Privacy Act’s (CCPA) expansive definition of “personal information,” we look at other sections of the CCPA that either limit the applicability of the law’s “personal information” definition or exclude information from coverage under the law.

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Part II: A Closer Look at the CCPA’s Definition of “Personal Information”

Our three-part series on the California Consumer Privacy Act’s (CCPA) expansive definition of “personal information” is designed to help businesses identify whether they hold information covered under the law, while also highlighting the potential pitfalls in the definition as we await interpretative regulations from the California Attorney General and potential amendments from the state’s legislature. In Part I, we explored the breadth of the definition. We now turn to the law’s two explicit exclusions from the definition of “personal information.” 

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FBI’s Brief Expands to Combat Cyber Threats

The nation’s top law enforcement agency is rebooting its cybercrime capabilities.

In an effort to keep up with the evolving threats against property, critical infrastructure and human life posed by cyber-attacks –especially those launched by foreign adversaries – the Federal Bureau of Investigation is seeking to reposition its priorities and fortify its capacity to fight cybercrime.

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Are Bug Bounty Programs Worth It?

Almost weekly, it seems there is another news article about a bug bounty program sponsored by a major corporation where an amateur hacker – often a teenager – is paid a sizeable sum of money for finding a bug in a company’s operating system or code. Often, these articles describe just how much money these teens make from bug bounty programs; one headline from March 12, 2019 describes how bug bounty programs have made “one teen a millionaire hacker.” In another from February 2019, Apple paid a 14-year-old hacker an undisclosed sum after he found a security flaw in FaceTime.  

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FTC Looks to NY’s Cyber Regulation in Proposed Changes to Safeguards Rule

When New York’s far-reaching cybersecurity law for financial institutions was enacted more than two years ago, some predicted it would serve as a national blueprint for future data security laws. Now, as the U.S. Federal Trade Commission considers changes to two privacy rules designed to safeguard customer information held by financial institutions, the proposed changes to one law – the Safeguards Rule – hue closely to a handful of requirements already in place in New York.

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Yet Another Proposal to Require Disclosure of Board’s Cyber Expertise

Before investing in a company, would you want to know whether the board of directors had cybersecurity expertise?

A bipartisan group of senators have proposed a bill, Senate Bill 592, that would require every public company to disclose the cybersecurity background of its directors, and, if none exists, explain why the company doesn’t believe it is necessary.

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MyFitnessPal Data Breach Lawsuit Sent to Arbitration

Many consumers have become painfully aware of the risks that data breaches pose in a digital world. And now, their legal claims may not be ultimately decided by a judge or jury but sent off to arbitration.

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DNA Collection: The Next Big Thing in Privacy Litigation?

The use of biometric technology is fast becoming the next big thing in privacy litigation. There was last month’s decision by the Illinois Supreme Court that upheld a consumer’s right to sue companies for collecting biometric data – such as fingerprints and iris scans – without first disclosing how such information will be used. See our blog on that ruling here.

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GAO Backs “Comprehensive” Privacy Legislation

A recent report by the Government Accountability Office (GAO) is recommending that Congress adopt comprehensive federal data privacy legislation. The GAO’s proposal is, in part, meant to address limitations of the current privacy regulatory landscape, which is mostly piecemeal, industry-specific regulation at both the federal and state levels. The GAO’s 56-page report follows more than a year of interviews with officials from various federal agencies that have taken active roles in data security issues, including the Federal Trade Commission (FTC), Federal Communications Commission, and the Consumer Financial Protection Bureau, as well as stakeholders from industry and academia.

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NYS Cyber Regulation: New Rules for Third-Parties

It’s been almost two years since New York’s top banking regulator implemented one of the nation’s most stringent cybersecurity regulations.  Since then, thousands of financial institutions have recruited chief information security officers, implemented cybersecurity programs, performed penetration testing, and imposed encryption requirements on their most sensitive information.

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