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Last year the FTC mandated what an organization’s written cybersecurity program should include to avoid being deemed “unfair and deceptive” to consumers,[1] and this year California consumers whose personal information is compromised may file lawsuits against organizations that failed to implement “reasonable security.”[2]

But several states provide legal safe harbors to organizations with written cybersecurity programs. Now, Utah is considering joining them. Under House Bill 158, referred to as the Cybersecurity Affirmative Defense Act (the “Proposed Act”),[3] if at the time of a data breach a covered entity has created, maintained, and complied with a written cybersecurity program it has an affirmative defense to a civil tort claim.
Continue Reading Utah Considers a Cybersecurity Safe Harbor as Ransomware Runs Riot

As states fill the legal void for consumer privacy rights,[1] a new federal standard has emerged to assist companies with their compliance efforts. The National Institute of Standards and Technology (“NIST”) Privacy Framework (“PF”) was released last month to help organizations manage the risks associated with their data processing activities.

What the PF Does…

Under the California Consumer Privacy Act, any California consumer whose personal information is compromised “as a result of the business’ violation of the duty to implement and maintain reasonable security procedures and practices … may institute a civil action.”[1]

Consumers can initiate this private right of action right now, whereas other consumer rights can only be enforced by the Attorney General beginning in July.[2]

Why This Matters

Most civil actions filed against companies during the last decade were dismissed. Why? Consumers were unable to demonstrate a suitable harm. Sure, cybersecurity incidents are a hassle for consumers to deal with, but that alone was not enough. Recently, however, courts have said “the hassle” is enough, at least for cases to proceed past their initial stages. This has led to a steady rise in both the number of cases that are settled and their dollar amounts.

Complicating things further, under the CCPA proving harm doesn’t necessarily matter. If personal information is compromised because of a failure to implement and maintain reasonable security, the CCPA quantifies harm to be “not less than one hundred dollars ($100) and not greater than seven hundred and fifty ($750) per consumer per incident” or an amount higher if proven.[3] What matters is whether your security is reasonable.

Google’s search engine defines reasonable as “as much is appropriate or fair.” For those who reminisce about how they spent three years in law school learning the many ways “reasonable” can be interpreted, the CCPA may trigger déjà vu; neither the CCPA nor its proposed regulations defines “reasonable security.” But reliable guidance is available.
Continue Reading CCPA Is Here – Is Your Security “Reasonable”?

On January 1, 2020, if your company sells goods or services to California consumers and meets certain criteria,[1] the agreements you have with companies that handle personal information on your behalf should be analyzed and, if necessary, updated just as your privacy notices should be updated.[2]

Examples of companies that handle personal information on a company’s behalf include marketing companies, managed security service providers (MSSP), and software-as-a-service (SaaS) providers such as payment processing, document and email management, and customer analytics companies.

Why this Matters

Under the California Consumer Privacy Act (“CCPA”), companies that handle consumer information on behalf of a company are “service providers.”[3] The CCPA requires that a company enter into an agreement with a service provider that

prohibits the entity receiving the information from retaining, using, or disclosing the personal information for any purpose other than for the specific purpose of performing the services specified in the contract for the business … [4]

This is important because the CCPA exempts a company for any violation of the CCPA if its service providers have executed an agreement and they, not the company providing the personal information, violates any of the rights given to California consumers under the CCPA.[5]…
Continue Reading CCPA is Here – Are Your Agreements Ready?

Last year towards the end of May, a barrage of emails and pop-ups informed online users about how companies use cookies – small bits of software that track website activity – in accordance with a requirement under the European Union’s General Data Protection Regulation.

On January 1, 2020, many companies will inform consumers about updates to their privacy notices – agreements between companies and their consumers about how personal information is processed – in accordance with a requirement under the California Consumer Privacy Act (“CCPA”).

Why this Matters

A privacy notice (aka privacy policy or privacy statement) is typically the first place a company explains its practices for handling the personal information it collects.  Privacy notices have received considerable attention this year, not all of it positive.  You do not have to read all of the New York Times article, “We Read 150 Privacy Policies. They Were an Incomprehensible Disaster,” to know what it concluded.[1]  Similarly, an article titled “Are Organizations Ready for New Privacy Regulations?” summarizes the Online Trust Alliance’s analysis of 1,200 privacy statements and its view that many of these privacy notices could result in penalties for failing to follow new laws such as the CCPA.[2]  In addition, privacy notices have been the subject of litigation in cases asserting that the sale of customer information to non-affiliated entities for marketing purposes,[3] and the transfer of customer data in a merger, asset sale, or sale of customer information, were all improper because they violated companies’ privacy notices.[4]…
Continue Reading CCPA is Here – Is Your Privacy Notice Ready?

In a recent Cybercrime Tactics and Techniques Report focusing on the health care industry, cybersecurity company Malwarebytes discovered a significant 82% spike in Trojan malware attacks on health care organizations in Q3 2019. Emotet and TrickBot, two especially sophisticated and dangerous forms of malware, were mostly responsible for this surge.

Used primarily as ’banking…

For Cybersecurity and Privacy, “What Are the Industry Standards? Are We Meeting Them?”

These are questions the FTC Chairman, Joseph Simons, strongly suggested a CEO must ask before a data breach occurs to avoid the prospect of personal liability. These questions and statements by other commissioners emphasizing the FTC’s role – to bring about a “culture of change” that better protects consumers – were part of separate meetings with each of the five FTC commissioners last month. On the heels of these meetings, Senator Ron Wyden (D-OR) proposed federal legislation that would give the FTC new powers and incarceration for executives who fail to meet industry standards.

With the FTC already requiring at least one CEO to verify that a company is meeting industry standards for privacy, the question of what industry standards apply is more important than ever. Since 2010 the FTC has resolved about 50 cases involving alleged cybersecurity incidents and privacy violations (mostly the latter). In 12 of these the FTC named directors and officers and their organizations. In four of these the FTC negotiated settlements requiring organizations to establish and implement written cybersecurity and privacy programs. As noted previously, the FTC has been on a tear”[1] and recently mandated that Equifax implement a comprehensive cybersecurity program that included, “at a minimum,” 26 requirements.

Which brings us back to Chairman Simons’ questions and what constitutes “industry standards.” Some laws and commonly used contract terms define industry standards as “the usual and customary practices in the delivery of products or services within a particular business sector.”[2] Industry standards can also refer to a standard adopted by a Standards Setting Organization. Establishing such standards takes time as they must be tested to ensure broad application. Enter NIST – the National Institute of Standards and Technologies.[3]

In February 2013, an executive order was issued requiring government and private sector organizations to collaborate on how “to maintain a cyber environment that encourages efficiency, innovation, and economic prosperity while promoting safety, security, business confidentiality, privacy, and civil liberties.”[4] A year later the NIST Cybersecurity Framework (“CSF”) was published and last year on April 16 it was updated. The Organization of American States and Amazon Web Services recently described it as:

[U]ndoubtedly a tool for cybersecurity risk management, which enables technological innovation while adjusting to all types of organizations (regardless of category or size) … [and is] a simple-approach to strategy to cybersecurity governance, to make it possible to easily transfer technical notions to the business objectives and needs.[5]

The CSF can be found here: https://www.nist.gov/cyberframework.…

Continue Reading Achieving Industry Standards

In late January, the U.S. Department of Health and Human Services’ Healthcare & Public Health Sector Coordinating Council issued a new cybersecurity guidance document for healthcare businesses of all sizes. The guidance document, entitled “Health Industry Cybersecurity Practices: Managing Threats and Protecting Patients,” available at https://www.phe.gov/Preparedness/planning/405d/Pages/hic-practices.aspx, provides concrete and practical guidance for addressing what the Council has identified as the “most impactful threats . . . within the industry” and serves as a renewed call to action for implementation of appropriate cybersecurity practices. This document is critical reading for healthcare business managers faced with ever-increasing cybersecurity risks and the attending risks to patient safety and operational continuity, business reputation, financial stability, and regulatory compliance.
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Continue Reading HHS Issues Practical New Cybersecurity Guidance for Healthcare Businesses of all Sizes

Until recently, hackers have had limited success stealing Two-Factor Authentication (2FA) PIN and token information.  Unfortunately, a tool has been released that will now make it much easier for practically any bad actor to bypass many implementations of 2FA:

https://www.zdnet.com/article/new-tool-automates-phishing-attacks-that-bypass-2fa/

This does not mean we should stop using Two-Factor Authentication (2FA). We should still use…

About the Global Privacy & Security Blog

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Contracts, laws and regulations require privacy compliance, and good business practices demand it. This blog is designed to inform our clients and readers about developing privacy issues and regulatory updates, and provide alerts on cyber security stories and data breaches that impact various data privacy and security requirements.