Uber Data Breach Results in Corporate Cooperation and Executive Conviction
On October 5, 2022, a federal jury in the Northern District of California convicted former Uber Chief Security Officer Joseph Sullivan of obstructing a federal proceeding and misprision of a felony for his role in deceiving management and the federal government to cover up a 2016 data breach that exposed personally identifiable information (“PII”) of approximately 57 million users, including approximately 600,000 drivers’ license numbers, of the ride-hailing service. Sullivan, a former federal prosecutor, appears to be the first corporate executive criminally prosecuted—let alone convicted—for his response to a data security incident perpetrated by criminals. Sullivan faces a maximum of five years in prison for the obstruction charge, and a maximum three years in prison for the misprision charge.
Meru Data Podcast Features Sidley Associate Lauren Kitces
Sidley associate Lauren Kitces was featured on Simplify For Success, a podcast series presented by Meru Data and hosted by Priya Keshav. Lauren discussed FTC’s proposed rulemaking regarding data privacy and data security, and shared her thoughts on how to prepare for the FTC enforcement.
FTC Defends Expansive Privacy and Data Security ANPR at Public Forum
The FTC continues its defense of the wide-reaching Advance Notice of Proposed Rulemaking (ANPR) on “Commercial Surveillance and Data Security” that the Commission, by a 3-2 vote, issued in August. (See the supporting statements of Chair Lina Khan and Commissioners Rebecca Slaughter, and Alvaro Bedoya, and the dissenting statements of Commissioners Christine Wilson and Noah Phillips.)
On Thursday, September 8, the FTC hosted a public forum on the notice, featuring remarks by Chair Khan, Commissioner Bedoya, and panels featuring guests representing industry and consumer interests. (more…)
FTC ANPR Explores Wide Ranging Topics for Privacy and Cybersecurity Rulemaking
On Thursday, August 11, the Federal Trade Commission (“FTC”) announced that it is exploring rules to crack down on harmful commercial surveillance and lax data security practices. The FTC’s Advance Notice of Proposed Rulemaking (“ANPR”) solicits public comment on whether it should put into effect new rules and restrictions concerning standards and requirements for information security, the ways in which companies collect and process data in commercial contexts, and whether any practices related to the transfer, sharing, selling, or other monetization of personal information should be categorized as unfair or deceptive. The FTC voted 3-2 to publish the notice, with Chair Khan and Commissioners Slaughter and Bedoya voting in favor and issuing separate statements. Commissioners Phillips and Wilson voted against publication and also issued separate dissenting statements. The following Monday, Commissioner Phillips announced he would be leaving the FTC this fall.
Suits Against Google Signal Increased ‘Dark Patterns’ Scrutiny
*This article first appeared on Law360 on June 16, 2022
Pending lawsuits against Google LLC illustrate how regulators and plaintiffs lawyers are increasingly wielding a dark patterns theory in challenging companies’ practices involving consumers.
The attorneys general of Washington, D.C., Washington state, Texas and Indiana all filed complaints against Google, alleging that the company tricks consumers into providing their location data, on Jan. 24. (more…)
UK Consults on Algorithmic Processing
Algorithms touch upon multiple aspects of digital life, and their use potentially falls within several separate – though converging – regulatory systems. More than ever, a ‘joined up’ approach is required to assess them, and the UK’s main regulators are working together to try to formulate a coherent policy, setting an interesting example that could be a template for global approaches to digital regulation. (more…)
Blockchain Tracing: The U.S. Government’s Newest Tool to Combat Foreign Crime
On May 13, 2022, U.S. Magistrate Judge Zia M. Faruqui of the District of Columbia took the unusual step of unsealing and issuing a Memorandum Opinion captioned “In Re: Criminal Complaint” to explain the court’s conclusion that probable cause existed to authorize a federal criminal complaint against an individual for transmitting over $10 million worth of bitcoin between the United States and an Office of Foreign Assets Control–sanctioned nation, violating the International Emergency Economic Powers Act (IEEPA) and defrauding the United States, in violation of 18 U.S.C. § 371.
SEC Announces 2022 Examination Priorities: Private Funds, ESG, Retail, Cyber, Digital Assets Top the List
On March 30, 2022, the U.S. Securities and Exchange Commission (SEC) Division of Enforcement (EXAMS or Division) issued its annual examination priorities.1 Consistent with its recent rulemaking activity, in its accompanying release, the SEC highlighted private funds; Environmental, Social and Governance (ESG) investing; retail; cyber; and digital assets as key examination priorities. This article provides a concise summary of upcoming examination priorities and perennial issues registrants can anticipate in the following year’s examinations.
California AG’s First Formal CCPA Opinion Directs Businesses to Disclose Internally-Generated Inferences and Expresses Skepticism Around Trade Secret Claims
In its first formal opinion interpreting the California Consumer Privacy Act (the “Opinion”), the California Attorney General (OAG) has expansively interpreted CCPA to mean that inferences created internally by a business, including those based on data that is not included in the definition of personal information, constitute “specific pieces” of personal information “collected by a business” which must be produced to consumers upon request. The Opinion, which was issued on March 10, 2022 in response to a request for clarification submitted by Assemblyman Kevin Kiley, also addressed arguments that such inferences could constitute trade secrets and signaled the OAG’s unwillingness to accept “blanket assertions” that inferences constitute trade secrets or proprietary information, requiring instead that businesses explain why an inference constitutes a trade secret with greater particularity. We highlight below some of the more instructive elements of the opinion that provide insight into potential future enforcement. (more…)
Digital Health Compliance Considerations — Revenue Models and Patient Incentives
Digital Health Compliance Considerations — Revenue Models and Patient Incentives
The digital health market continues to grow exponentially in the United States. As startups and established companies market digital tools and technology to improve health outcomes and reduce costs, a key issue is whether the revenue model and any incentives used to drive patient behavior comply with federal healthcare laws that prohibit kickbacks to providers and patients. A recent government opinion issued to a digital behavioral health company approves a revenue and patient incentive model under key federal healthcare fraud and abuse laws and serves as a possible starting point for development of a sustainable revenue model that can be scaled as the business grows. (more…)
