On October 1, 2020, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) published an advisory that highlights the risk of potential U.S. sanctions law violations if U.S. individuals and businesses comply with ransomware payment demands.1
Ransomware attacks use malware, often injected through phishing schemes, to encrypt a victim’s data files or programs, followed by a ransom demand by the threat actor that offers the decryption key in exchange for payment. Payment is often demanded in bitcoin, and thus third-party services are often used to make such payments. Increasingly, ransomware attacks not only lock data up but steal data from the victim and threaten to publish sensitive files belonging to victims. According to OFAC, ransomware attacks have been increasing over the last two years and are a special risk during the COVID-19 pandemic, with cybercriminals targeting not only large corporations but also small to medium enterprises, hospitals, schools, and local government agencies.2
On August 14, 2020, California’s Office of Administrative Law approved and filed with the California Secretary of State final regulations implementing the California Consumer Privacy Act. The regulations, drafted by California’s Office of the Attorney General (OAG), went through three rounds of changes during the rulemaking process and were finally enacted more than two years after the CCPA was signed into law. The CCPA is a landmark state privacy law that grants consumers new privacy rights, and requires businesses to enhance disclosures about their data practices and facilitate consumer privacy rights. (more…)
On July 21, 2020, the New York State Department of Financial Services (NYDFS or the Department) issued a statement of charges and notice of hearing (the Statement) against First American Title Insurance Company (First American) for violations of the Department’s Cybersecurity Requirements for Financial Services Companies, 23 N.Y.C.R.R. Part 500 (Cybersecurity Regulation or Regulation). The First American Statement of charges alleges six violations of the Cybersecurity Regulation and marks the Department’s first action pursuant to the Regulation, which is enforced by the recently created NYDFS Cybersecurity Division.1
NYDFS’s Statement seeks relief against First American, including civil monetary penalties and an order requiring First American to remediate any defined violations. Although the Statement does not include a calculation of the total penalty, the NYDFS explains that the civil monetary fines against First American are to be assessed pursuant to the Financial Services Law, which provides for a maximum civil monetary penalty of $1,000 per violation of the Regulation.2 Because First American’s violations included the exposure of millions of documents containing nonpublic information (NPI), the total penalty potentially could be substantial. The First American hearing is scheduled to occur on October 26, 2020, at the NYDFS.
On June 1, 2020, California’s Office of the Attorney General (“AG”) moved one step closer to finalizing the California Consumer Privacy Act (“CCPA”) regulations when the AG submitted proposed final regulations for review and approval by California’s Office of Administrative Law (“OAL”). This submission signals the end of the AG’s CCPA regulation drafting process that began in early 2019. If the OAL approves the proposed final regulations, they will be finalized and enforceable by the AG, subject to any legal challenges.
On April 30, 2020, four Republican Senators announced plans to introduce the COVID-19 Consumer Data Protection Act. The four Senators, John Thune (R-S.D), Roger Wicker (R-Miss.), Jerry Moran (R-Kan.), and Marsha Blackburn (R-Tenn.), are all Members of the Commerce Committee, with Wicker the Committee’s chair.
According to the April 30 Senate press release regarding the COVID-19 Consumer Data Protection Act, the legislation would “provide all Americans with more transparency, choice, and control over the collection and use of their personal health, geolocation, and proximity data” for data processing related to fighting the COVID-19 pandemic. The press release also states that the bill would “hold businesses accountable to consumers if they use personal data to fight the COVID-19 pandemic.” Under the bill, covered purposes include “(1) collecting, processing, or transferring the covered data of an individual to track the spread, signs, or symptoms of COVID-19; (2) collecting, processing, or transferring the covered data of an individual to measure compliance with social distancing guidelines or other requirements related to COVID-19 that are required by federal, state, or local government order; (3) collecting, processing, or transferring the covered data of an individual to conduct contact tracing for COVID-19 cases.” (more…)
While the world seems to have ground to a halt in so many ways, time still marches on, and along with it, the California Consumer Privacy Act (“CCPA”) enforcement date (July 1, 2020) inches ever closer. On March 11, 2020, the California Attorney General (“AG”) released the third turn of proposed California Consumer Privacy Act (“CCPA”) regulations. The AG’s revisions make only moderate changes to the last round of regulations issued in February 2020. Businesses will not need to dramatically change compliance plans as the proposed revised regulations seek to refine requirements in prior drafts rather than introduce any wholesale changes to the regulatory framework. (more…)
Just as companies were starting to recover from their exertions to put in place California Consumer Privacy Act (“CCPA”) compliance programs before the law’s January 1, 2020 entry into force, the California Attorney General (“AG”) provided an early February surprise. CCPA watchers long expected that the AG would revise the CCPA regulations he initially proposed on October 10, 2019. But when the AG actually released his proposed regulations on February 7 – a proposal he subsequently modified slightly on February 10 – both the timing and breadth of the revisions were surprising. In short, the revisions were both sooner and more significant than expected.
With issues around the collection and handling of personal data becoming the focus of increased scrutiny among regulators, policymakers, and consumers, interest has continued to grow among organizations to better understand and address privacy risk. Seeking to support innovation in the market and to accommodate the increasingly global nature of data processing ecosystems, the National Institute of Standards and Technology (“NIST”) released Version 1.0 of the NIST Privacy Framework: A Tool for Improving Privacy through Enterprise Risk Management (“NIST Privacy Framework”) on January 16, 2020. The recent publication aims to outline an adaptable approach to privacy risk for organizations of all sizes by providing a “framework for privacy management, not just a checklist of tasks.”
The NIST Privacy Framework is a voluntary tool intended to assist organizations in managing privacy risks that may arise due to system, product, or service operations that involve personal data, or in connection to new regulatory regimes such as the California Consumer Privacy Act (“CCPA”) and the European Union’s General Data Protection Regulation (“GDPR”). As noted in the Executive Summary, the NIST Privacy Framework is intended to “enable better privacy engineering practices that support privacy by design concepts and help organizations protect individuals’ privacy.” Notably, the Federal Trade Commission (“FTC”), recognized by many as the U.S. government’s top privacy watchdog, had applauded the preliminary draft of the NIST Privacy Framework in Fall 2019 – indicating that the finalized publication could potentially serve as a credible benchmark for organizations seeking to address privacy risk across the data processing lifecycle.
*This article was first published by the American Bar Association Infrastructure and Regulated Industries in Summer 2019.
Every year, as the calendar turns to June, the legal community looks to the Supreme Court. Eager to get to the Term’s end, the Justices rush to complete all of the outstanding opinions. Since the most difficult and important cases usually take the longest to work out, they are typically the stragglers. June is thus the time when the “blockbuster” opinions are issued—the cases that law professors analyze in their tenure pieces and that law school students study, quite possibly for years to come.
Soon after he took office, President Trump issued Executive Order (EO) 13800, Strengthening the Cybersecurity of Federal Networks and Critical Infrastructure. Given that the President spent much of his campaign and early Presidency trying to distance his Administration from that of his predecessor, commentators noted a surprising amount of continuity between Trump’s cybersecurity EO and the Obama Administration’s approach to cybersecurity. A focus on critical infrastructure and transparency from publicly traded companies that control it; an emphasis on the public and private sectors working together; reliance on standards promulgated by the National Institute of Standards and Technology; a focus on protecting the Federal Government’s networks, including by taking steps toward using shared infrastructure such as the cloud – EO 13800 builds on existing policies and initiatives in each of these areas and others. (more…)