Privacy Law and Regulation

The Denmark Data Protection Authority (DPA) ruled on April 11, 2019 that affirmative consent is required when companies record customer telephone calls. Because voice recordings constitute personal data under the European Union’s (EU) General Data Protection Regulation (GDPR), international companies that communicate via telephone with EU customers will need to take steps to ensure GDPR compliance.

In this case, Denmark’s largest telecommunications company, TDC A/S, provided disclosures to its customers that calls may be recorded for training purposes, but the company offered no mechanism for customers to opt-in or opt-out of the recording. During one such call, the customer requested that the call not be recorded, but the service agent said there was no way to turn off the recording. The Denmark DPA rejected the company’s arguments that its recording practices served a legitimate interest, such as the improvement of its customer service, and concluded that the company’s telephone recording practices violated the GDPR.
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Utah Governor Gary Herbert is expected to sign a new privacy law in the coming weeks that will make his state the first to protect private electronic data stored with third-party providers from government access without a warrant.

Under the legislation passed unanimously by the Utah Legislature earlier this month, law enforcement agencies need a warrant to obtain information about an individual from wireless communications providers, email platforms, search engine providers, or social media companies.

While much of the focus over the past two years has been on laws to protect consumer privacy rights, protecting private information from disclosure to law enforcement has also generated attention. Traditionally, the general rule followed, on both the federal and state levels, has been that law enforcement agencies can access information through third-party providers because individuals have no reasonable expectation of privacy when they share their personal information with third parties.
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On March 20, 2019, the Supreme Court refused to address the adequacy of a $8.5 million Google privacy class action settlement and instead remanded to a lower court to determine whether the class action plaintiffs had standing to assert a claim under the Stored Communications Act (“SCA”).  The Court’s holding serves as a reminder that

The FTC has proposed amendments to its 2003 Safeguards Rule and the 2000 Privacy Rule, applicable to financial institutions under the Gramm Leach Bliley Act (GLBA). The proposed changes are informed by the FTC’s enforcement experience and are intended to keep pace with technological developments.
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Following numerous privacy complaints, the State Office for Data Protection Supervision (BayLDA) recently conducted a random audit on 40 companies and found widespread problems with their cookie disclosures. The purpose of the audit was to determine whether website users were able to obtain transparent information regarding the use and tracking of their information by third-party

New proposed legislation in California, backed by state Attorney General (AG) Xavier Becerra, would amend the new California Consumer Privacy Act (CCPA) to make it easier for private plaintiffs and public officials to sue for violations while further increasing regulatory uncertainty and compliance costs for businesses.  Specifically, SB 561 would expand the CCPA’s private right of action, remove the Act’s public enforcement “cure” provision, and eliminate the ability of affected companies to seek compliance guidance from the AG.

The CCPA is a sweeping new privacy law which goes into effect in January 2020.  It gives California residents substantial control over personal data held by certain California businesses, requiring disclosure of what personal information the business collects, how that information is used or sold, and allowing consumers to control or delete that information upon request.  It currently allows private plaintiffs to seek statutory damages of up to $750 per violation for certain violations, and it allows the AG to seek civil penalties of up to $2,500 for most violations, and up to $7,500 for violations found to be intentional.
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The Equifax and Facebook-Cambridge Analytica scandals, coupled with the proliferation of state privacy and security laws such as the California Consumer Privacy Act (CCPA)—as well as proposed laws in Washington and Massachusetts—have increased demand for a comprehensive national privacy law.  Last week, the Senate announced plans to hold hearings to discuss a proposed privacy law.  The Government Accountability Office (GAO) has just released its report recommending that Congress develop comprehensive privacy legislation to enhance consumer protections. 
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The Illinois Supreme Court held on January 25, 2019, that plaintiffs filing suit under the Biometric Information Privacy Act—which regulates how private entities disclose and discard biometric identifiers—do not need actual damages for standing. The decision has serious implications for companies collecting biometric data from Illinois residents.

The Act provides a private right of action to individuals “aggrieved” by any violation, allowing them to seek, among other remedies, liquidated or actual damages, attorneys’ fees, and costs. However, there has been widespread uncertainty as to whether an aggrieved individual asserting a private action under the Act needed to show that he or she suffered an actual injury as a result of an alleged violation, or if a violation of the Act in and of itself conveys standing.
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The prevailing wisdom after last year’s enactment of the California Consumer Privacy Act (CCPA) was that it would result in other states enacting consumer privacy legislation. The perceived inevitability of a “50-state solution to privacy” motivated businesses previously opposed to federal privacy legislation to push for its enactment. With state legislatures now convening, we have

As we turn the page on 2018, let’s reflect on some of the key privacy and cybersecurity issues that will continue to occupy our hearts and minds in 2019.

Owning the Mega-Breach

2018 was the year in which data breaches in mergers and acquisitions became the iceberg in full view. This fuller realization of cyber risk in transactions, though, actually has its origin in September 2016 – when Yahoo and Marriott were in the midst of deals that would involve some of the largest data breaches on record.
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