Privacy & Information Security Law Blog

On February 28, 2024, President Biden released an Executive Order (“EO”) “addressing the extraordinary and unusual national security threat posed by the continued effort of certain countries of concern to access Americans’ bulk sensitive personal data and certain U.S. Government-related data.” In tandem with the EO, the Department of Justice’s (“DOJ’s”) National Security Division is set to issue an advance notice of proposed rulemaking (“ANPRM”) pursuant to the EO, which directs the DOJ to “establish, implement and administer new and targeted national security programming” to address the threat. The DOJ regulations will identify specific categories of “data transactions” that are prohibited or restricted due to their “unacceptable risk to national security.” 

On July 25, 2023, Hunton published a client alert discussing the importance of cyber and directors and officers (“D&O”) liability insurance for companies and their executives to guard against cyber-related exposures. In today’s ever-changing threat landscape, all organizations are at risk of damaging cyber incidents and resulting investigations and lawsuits, underscoring the importance of utilizing all tools in a company’s risk mitigation toolkit, including insurance, to address these exposures. 

On March 3, 2023, the U.S. Department of Justice (“DOJ”) released an update to its Evaluation of Corporate Compliance Programs guidance (“ECCP Guidance”). The ECCP Guidance serves as a guidance document for prosecutors when evaluating a corporate compliance program. Among other updates, the ECCP Guidance now includes new guidance for assessing how companies govern employees’ use of personal devices, communication platforms and messaging applications.

On October 25, 2022, the U.S. Department of Justice (“DOJ” or the “Department”) announced that Google had entered into an agreement to resolve a dispute over the loss of data responsive to a search warrant issued in 2016.

On October 3, 2022, the U.S. Department of Justice (“DOJ”) announced that the agreement between the U.S. Government and the UK Government on Access to Electronic Data for the Purpose of Countering Serious Crime (the “CLOUD Act Agreement”) entered into force, effective the same day. The CLOUD Act Agreement, which is authorized by the U.S. Clarifying Lawful Overseas Use of Data (“CLOUD”) Act, is the first of its kind and will allow each country’s investigators to gain access to data held by service providers in the other country, for the purpose of combating serious crime. According to DOJ, this “will greatly enhance the ability of the United States and the United Kingdom to prevent, detect, investigate and prosecute serious crime, including terrorism, transnational organized crime, and child exploitation, among others.”

On September 15, 2022, California Governor Gavin Newsom signed into law the California Age-Appropriate Design Code Act (the “Act”). The Act, which takes effect July 1, 2024, places new legal obligations on companies with respect to online products and services that are “likely to be accessed by children” under the age of 18.

On May 25, 2022, Twitter reached a proposed $150 million settlement with the Department of Justice (“DOJ”) and the Federal Trade Commission to resolve allegations that the company deceptively used nonpublic user contact information obtained for account security purposes to serve targeted ads to Twitter users. In a complaint filed in federal court, the government alleged that Twitter violated both the FTC Act and a 2011 FTC Order by misrepresenting the extent to which the company maintained and protected users’ nonpublic contact information. The proposed settlement would require Twitter to pay $150 million in civil penalties and implement a comprehensive privacy and information security program “with extensive procedures to safeguard user information and assess internal and external data privacy risks.”

On March 11, 2022, the U.S. Senate passed an omnibus spending bill that includes language which would require certain critical infrastructure owners and operators to notify the federal government of cybersecurity incidents in specified circumstances. The bill  previously was passed by the House of Representatives on March 9, 2022. President Biden is expected to sign the bill and has until March 15, 2022, to do so before the current spending authorization expires.

On November 8, 2021, law enforcement agencies in both the United States and European Union announced that a series of actions, including a number of arrests, were taken against the Russia-linked ransomware group, “REvil.” The U.S. Department of Justice (the “DOJ”) unsealed documents relating to an August indictment against two individuals in Dallas for alleged involvement in REvil ransomware attacks against several U.S. businesses. The European authorities, Europol, also announced that police in Romania and South Korea had arrested five people alleged to be REvil affiliates.

On October 6, 2021, Deputy Attorney General Lisa Monaco announced the launch of the new Civil Cyber-Fraud Initiative. Led by the Department of Justice (“DOJ”) Civil Division’s Commercial Litigation Branch, Fraud Section, the initiative will seek to “utilize the False Claims Act (“FCA”) to pursue cybersecurity related fraud by government contractors and grant recipients.”

On September 28, 2020, the U.S. Department of Commerce, along with the U.S. Department of Justice and the Office of the Director of National Intelligence, released a White Paper entitled Information on U.S. Privacy Safeguards Relevant to SCCs and Other EU Legal Bases for EU-U.S. Data Transfers after Schrems II (the “White Paper”). The White Paper outlines privacy safeguards in and updates to the U.S. surveillance provisions flagged by the Court of Justice of the European Union (“CJEU”) in its Schrems II decision. It is intended to serve as a resource for companies transferring personal data from the EU to the U.S. in the wake of the CJEU’s decision overturning the EU-U.S. Privacy Shield. Particularly, it focuses on companies relying on Standard Contractual Clauses (“SCCs”) for data transfers, and provides information to help them determine whether the U.S. ensures adequate privacy protections for companies’ data.

On June 9, 2020, the Federal Communications Commission (“FCC”) announced a proposed $225 million fine, the largest in the history of the FCC, against several individuals for telemarketing violations.

As previously reported on July 12, 2019, Facebook will pay a $5 billion penalty to the Federal Trade Commission to resolve a privacy probe into whether Facebook violated a prior FTC consent decree requiring the company to better protect user privacy. The $5 billion penalty is the largest imposed on any company for violating consumers’ privacy – nearly 20 times the largest privacy or data security penalty to date.

The Centre for Information Policy Leadership (“CIPL”) at Hunton Andrews Kurth LLP recently published a white paper on Organizational Accountability’s Existence in U.S. Regulatory Compliance and its Relevance for a Federal Data Privacy Law (the “White Paper”).

Earlier this month, the U.S. Department of Justice (“DOJ”) published a white paper entitled “Promoting Public Safety, Privacy, and the Rule of Law Around the World: The Purpose and Impact of the CLOUD Act” (“White Paper”). The Clarifying Lawful Overseas Use of Data Act (the “CLOUD Act”) was enacted in March 2018 by the U.S. government to aid foreign and U.S. investigators in obtaining access to electronic information related to serious crimes and held by service providers. The CLOUD Act authorizes the U.S. to enter into bilateral agreements with foreign countries that abide by a baseline standard for rule-of-law, privacy and civil liberties protections to streamline processes for obtaining electronic evidence. The CLOUD Act also codifies the principle that a company subject to U.S. jurisdiction “can be required to produce data the company controls, regardless of where it is stored at any point in time.”

On May 14, 2018, the Department of Energy (“DOE”) Office of Electricity Delivery & Energy Reliability released its Multiyear Plan for Energy Sector Cybersecurity (the “Plan”). The Plan is significantly guided by DOE’s 2006 Roadmap to Secure Control Systems in the Energy Sector and 2011 Roadmap to Achieve Energy Delivery Systems Cybersecurity. Taken together with DOE’s recent announcement creating the new Office of Cybersecurity, Energy Security, and Emergency Response (“CESER”), DOE is clearly asserting its position as the energy sector’s Congressionally-recognized sector-specific agency (“SSA”) on cybersecurity.

The U.S. Department of Justice (the “DOJ”) has unsealed an indictment accusing nine Iranian nationals of engaging in a “massive and brazen cyber assault” against at least 176 universities, 47 private companies and 7 government agencies and non-governmental organizations, including the Federal Energy Regulatory Commission (“FERC”). According to the DOJ, the nationals worked for Mabna Institute, an Iranian-based company, as “hackers for hire,” stealing login credentials and other sensitive information to sell within Iran and for the benefit of the Iranian government.

On March 14, 2018, the Department of Justice and the Securities and Exchange Commission (“SEC”) announced insider trading charges against a former chief information officer (“CIO”) of a business unit of Equifax, Inc. According to prosecutors, the CIO exercised options and sold his shares after he learned of a cybersecurity breach and before that breach was publicly announced. Equifax has indicated that approximately 147.9 million consumers had personal information that was compromised.

On June 5, 2017, an Illinois federal court ordered satellite television provider Dish Network LLC (“Dish”) to pay a record $280 million in civil penalties for violations of the FTC’s Telemarketing Sales Rule (“TSR”), the Telephone Consumer Protection Act (“TCPA”) and state law. In its complaint, the FTC alleged that Dish initiated, or caused a telemarketer to initiate, outbound telephone calls to phone numbers listed on the Do Not Call Registry, in violation of the TSR. The complaint further alleged that Dish violated the TSR’s prohibition on abandoned calls and assisted and facilitated telemarketers when it knew or consciously avoided knowing that telemarketers were breaking the law.

On March 17, 2017, the Federal Trade Commission announced that Upromise, Inc., (“Upromise”) agreed to pay $500,000 to settle allegations (the “Settlement”) that it violated the terms of a 2012 consent order (the “2012 Order”) that required Upromise to provide notice to consumers regarding its data collection and use practices, and obtain third-party audits.

On January 18, 2017, the Department of Homeland Security (“DHS”) issued an updated National Cyber Incident Response Plan (the “Plan”) as directed by Obama’s Presidential Policy Directive 41, issued this past summer, and the National Cybersecurity Protection Act of 2014.

On November 1, 2016, the FTC announced that a group of entities known as the Consumer Education Group (“CEG”) settled FTC charges that, between late 2013 and 2015, it made millions of telemarketing calls, including pre-recorded robocalls, to consumers on the national Do Not Call (“DNC”) Registry, in violation of the Telemarketing Sales Rule (“TSR”).

On July 26, 2016, the White House unveiled Presidential Policy Directive PPD-41 (“PPD-41”), Subject: United States Cyber Incident Coordination, which sets forth principles for federal responses to cyber incidents approved by the National Security Council (“NCS”). Coming on the heels of several high-profile federal breaches, including the Office of Personnel Management’s loss of security clearance information and the hack of over 700,000 IRS accounts, PPD-41 is a component of President Obama’s Cybersecurity National Action Plan. PPD-41 first focuses on incident response to cyber attacks on government assets, but also outlines federal incident responses to cyber attacks on certain critical infrastructure within the private sector.

On June 15, 2016, the U.S. Department of Homeland Security (“DHS”) and U.S. Department of Justice (“DOJ”) jointly issued final guidance on the Cybersecurity Information Sharing Act of 2015 (“CISA”). Enacted in December 2015, CISA includes a variety of measures designed to strengthen private and public sector cybersecurity. In particular, CISA provides protections from civil liability, regulatory action and disclosure under the Freedom of Information Act (“FOIA”) and other open government laws for “cyber threat indicators” (“CTI”) and “defensive measures” (“DM”) that are shared: (1) among businesses or (2) between businesses and the government through a DHS web portal. Congress passed CISA in order to increase the sharing of cybersecurity information among businesses and between businesses and the government, and to improve the quality and quantity of timely, actionable cybersecurity intelligence in the hands of the private sector and government information security professionals.

Recently, Aegerion Pharmaceuticals announced that it will enter into several settlements and plead guilty to two misdemeanors in connection with alleged violations of HIPAA, drug marketing regulations and securities laws. The criminal charges stem from the company’s marketing of a cholesterol drug called Juxtapid. Aegerion allegedly failed to comply with risk evaluation and management strategies and marketed Juxtapid (which is labeled with a warning about liver toxicity) without proper directions for use. 

On February 29, 2016, the European Commission issued the legal texts that will implement the EU-U.S. Privacy Shield. These texts include a draft adequacy decision from the European Commission, Frequently Asked Questions and a Communication summarizing the steps that have been taken in the last few years to restore trust in transatlantic data flows.

The agreement in support of the new EU-U.S. transatlantic data transfer framework, known as the EU-U.S. Privacy Shield, was reached on February 2, 2016, between the U.S. Department of Commerce and the European Commission. Once adopted, the adequacy decision will establish that the safeguards provided when transferring personal data pursuant to the new EU-U.S. Privacy Shield are equivalent to the EU data protection standards. In addition, the European Commission has stated that the new framework reflects the requirements that were set forth by the Court of Justice of the European Union (the “CJEU”) in the recent Schrems decision.

Last week, the Cybersecurity Unit of the U.S. Department of Justice (the “Justice Department”) released a guidance document, entitled Best Practices for Victim Response and Reporting of Cyber Incidents (“Guidance”), discussing best practices for cyber incident response preparedness based on lessons learned by federal prosecutors while handling cyber investigations and prosecutions. The Guidance is intended to assist organizations with preparing to respond to a cyber incident, and emphasizes that that the best time to plan a cyber response strategy is before an incident occurs. The Justice Department drafted the Guidance with smaller, less-experienced organizations in mind, but also believes that larger organizations may benefit from its summary of best practices.

On June 2, 2014, the U.S. Department of Justice announced a U.S.-led multinational effort to disrupt the “Gameover Zeus” botnet and the malware known as “Cryptolocker.” The DOJ also unsealed charges filed in Pittsburgh, Pennsylvania and Omaha, Nebraska against an administrator of Gameover Zeus.

On June 5, 2014, new OpenSSL vulnerabilities were announced, including one vulnerability that permits man-in-the-middle attacks and another that allows attackers to run arbitrary code on vulnerable devices. These vulnerabilities, along with the previously-discovered Heartbleed bug, show that technological solutions alone may not eliminate cyber risk.

On June 4, 2014, the U.S. Government Accountability Office (“GAO”) testified before the U.S. Senate Judiciary Subcommittee on Privacy, Technology and the Law on GAO’s findings regarding (1) companies’ use and sharing of consumer location data, (2) privacy risks associated with the collection of location data, and (3) actions taken by certain companies and federal agencies to protect the privacy of location data. GAO’s testimony relates to its 2012 and 2013 reports that examined the collection of location data by certain mobile industry companies and in-car navigation providers.

On April 10, 2014, U.S. Department of Justice Deputy Attorney General James Cole and Federal Trade Commission Chair Edith Ramirez announced a joint DOJ and FTC antitrust policy statement on the sharing of cybersecurity information (“Policy Statement”). The Policy Statement, as well as their remarks, emphasize the seriousness of the cybersecurity challenge and the need to improve cybersecurity information sharing. It is another example of the Obama Administration’s efforts to encourage the sharing of information about cybersecurity threats and vulnerabilities.

As reported in the Hunton Employment & Labor Perspectives Blog:

The U.S. Department of Justice has moved to intervene to defend the constitutionality of the Fair Credit Reporting Act (“FCRA”) against a consumer reporting agency accused of violating § 605 of the FCRA.

On November 23, 2010, Shamara T. King filed suit against General Information Services, Inc. (“GIS”) in Pennsylvania federal court claiming violations of the FCRA. (See, King v. General Information Services, Inc., No. 2:10-CV-06850 (E.D. Pa. Nov. 23, 2010). Specifically, King claims that when she applied for a job with the United States Postal Service, GIS performed a background check that included details about a car theft arrest that occurred more than seven years prior to the requested background check. According to § 605(a)(5) of the FCRA, consumer reporting agencies cannot provide adverse information, except for criminal convictions, “which antedates the report by more than seven years.”

As reported in the Hunton Employment & Labor Perspectives Blog, on October 10, 2011, California became the seventh state to enact legislation restricting public and private employers alike from using consumer credit reports in making hiring and other personnel decisions. Assembly Bill No. 22 both adds a new provision to the California Labor Code -- Section 1024.5 -- and amends California’s Consumer Credit Reporting Agencies Act (“CCRAA”). Effective January 1, 2012, California employers will be prohibited from requesting a consumer credit report for employment purposes unless they meet one of the limited statutory exceptions, and those employers meeting an exception, will be subjected to increased disclosure requirements. Connecticut, Illinois, Hawaii, Oregon, Maryland and Washington already have similar laws on the books, and many other states, as well as the federal government, are contemplating similar legislation. This trend creates a potential “credit-centric” minefield for employers that do business in any one or more of these states. In light of the multiple laws affecting their use, employers who utilize consumer credit reports in making personnel decisions should proceed cautiously. Employers must evaluate the need for these reports in making personnel decisions, review and modify their policies to ensure compliance with the myriad of regulations in this area, and monitor any new developments to ensure continued compliance.

As previously reported, on December 16, 2010, the U.S. Department of Commerce released its Green Paper “aimed at promoting consumer privacy online while ensuring the Internet remains a platform that spurs innovation, job creation, and economic growth.”

During a press teleconference earlier that morning announcing the release of the Green Paper, Secretary Gary Locke commented on the Green Paper’s recommendation of adopting a baseline commercial data privacy framework, or a “privacy bill of rights,” built on an expanded, revitalized set of Fair Information Practice Principles (“FIPPs”).  He indicated that baseline FIPPs would respond to consumer concerns and help increase consumer trust.  The Secretary emphasized that the Department of Commerce would look to stakeholders to help flesh out appropriate frameworks for specific industry sectors and various types of data processing.  He also noted that the agency is soliciting comments on how best to give the framework the “teeth” necessary to make it effective.  The Secretary added that the Department of Commerce is also open to public comment regarding whether the framework should be enforced through legislation or simply by conferring power on the Federal Trade Commission.

On December 16, 2010, the U.S. Department of Commerce Internet Policy Task Force issued its “Green Paper” on privacy, entitled “Commercial Data Privacy and Innovation in the Internet Economy: A Dynamic Policy Framework.”  The Green Paper outlines Commerce’s privacy recommendations and proposed initiatives, which contemplate the establishment of enforceable codes of conduct, collaboration among privacy stakeholders, and the creation of a Privacy Policy Office in the Department of Commerce.  Noting that “privacy protections are crucial to maintaining the consumer trust that nurtures the Internet’s growth,” the Green Paper “recommends reinvigorating the commitment to providing consumers with effective transparency into data practices, and outlines a process for translating transparency into consumer choices through a voluntary, multistakeholder process.”

The White House recently announced on its official blog that the National Science and Technology Council’s Committee on Technology has launched a new Subcommittee on Privacy and Internet Policy.  The subcommittee will be co-chaired by a representative from the Department of Commerce and the Department of Justice and will include representatives from over a dozen other departments and federal agencies, such as the Department of Health and Human Services and the National Security Council.  The goal of the subcommittee is to “develop principles and strategic directions” that will foster “consensus in legislative, regulatory, and international Internet policy realms.”  Some of these principles include “facilitating transparency, promoting cooperation, empowering individuals to make informed and intelligent choices, strengthening multi-stakeholder governance models, and building trust in online environments.”

On January 8, 2010, the Swiss Federal Administrative Court (“Bundesverwaltungsgericht”) published a decision that declared the transfer of banking data to U.S. law enforcement authorities by the Swiss bank UBS to be illegal.  In late 2009, UBS transferred the data of over 300 customers suspected of evading U.S. taxes to the U.S. Department of Justice and Internal Revenue Service following an order issued by the Swiss Financial Market Supervisory Authority (“Finma”) pursuant to an agreement Finma reached with the U.S. authorities.