On July 2, 2020, Sidley partner Alan Raul, founder and co-head of Sidley’s Privacy and Cybersecurity practice, hosted Adam Klein, Chairman of the Privacy and Civil Liberties Oversight Board (“PCLOB” or “the Board”), for a Monitor-Side Chat.
The discussion focused largely on the Commission’s work since Mr. Klein became Chairman in October, 2018. Key topics of the chat included:
- Mission, Operation and Access of PCLOB
- Balancing Counter-Terrorism and Privacy
- Comparison of U.S. and Foreign Checks and Balances
- FISA Reform
- Emerging Technologies
On July 13, the Department of Health and Human Services’ Substance Abuse and Mental Health Services (“SAMHSA”) announced final revisions to the Confidentiality of Substance Use Disorder Patient Records regulation codified at 42 CFR Part 2 (so-called “Part 2” regulations). These regulations—which apply to certain information relating to patients being treated for substance use disorders (“SUDs”)—impose restrictions above and beyond those in the Health Insurance Portability and Accountability Act (“HIPAA”). While the final rule does not fundamentally change the basic requirements of the Part 2 regulations, it relaxes some of the restrictions the regulations impose on holders of Part 2 information, in particular, to facilitate care coordination.
On July 23, 2020, the European Data Protection Board (the “EDPB”) published a set of important responses to a set of 12 frequently asked questions put forward to supervisory authorities regarding the recent Court of Justice of the European Union (“CJEU”) decision in Case C-311/18 – Data Protection Commissioner v Facebook Ireland Ltd and Maximillian Schrems (“Schrems II”) (“FAQs”).
Below is a summary of the key take-aways from the EDPB’s FAQs, which is intended to address a range of topics including the lack of a grace period following the decision and the conditions surrounding the use of certain data transfer mechanisms:
In a decision with significant implications for international trade and cross-border data flows, the EU’s highest court – the Court of Justice of the European Union (“CJEU”) ruled on 16 July 2020 that a key legal mechanism (called the EU-US Privacy Shield program) used to enable transfers of personal data from the European Union (“EU”) was invalid, while also potentially requiring additional protections to be implemented when another key transfer mechanism (called Standard Contractual Clauses) is used. The case – Data Protection Commissioner v. Facebook Ireland, Max Schrems (“Schrems II”) – considered the validity of the EU-US Privacy Shield (“Privacy Shield”) program (a privacy certification made available for US organizations through an agreement between the European Commission and the US government) and Standard Contractual Clauses (“SCC”) (a form of international data transfer agreement made available for use by the European Commission).
The last two weeks have brought two important (although unrelated) rulings on the TCPA’s Autodialer Restrictions. First, on June 25, the Federal Communications Commission limited the applicability of the autodialer restrictions in the Telephone Consumer Protection Act, 47 U.S.C. § 227 (the “TCPA”), to an emerging texting technology. Second, less than two weeks later, the Supreme Court ruled that an exception to the TCPA’s autodialer restrictions for calls to collect federal debts was unconstitutional and expanded the statute’s reach.
On June 24, 2020, the New York State Department of Financial Service (NYDFS) announced a series of virtual currency initiatives aimed at providing additional opportunities and clarity for BitLicense and limited-purpose trust company applicants and licensees. These initiatives include:
- A proposed framework for obtaining a conditional BitLicense when partnering with an existing licensee
- A proposed approach for NYDFS pre-approval of certain virtual currencies and a licensee’s ability to self-certify the use of new virtual currencies
- New procedures aimed at creating a more transparent and timely process for reviewing BitLicense applications
- A BitLicense FAQ page
The NYDFS’s press announcement stated that these initiatives were developed based on feedback from the industry to make it easier for virtual currency companies to successfully operate in New York. If the stated intent is achieved, these initiatives will be a welcome change for virtual currency businesses, which have often faced long timelines and a burdensome review process when submitting a BitLicense application or attempting to expand their approved activities. It remains to be seen, however, whether those objectives can be met.
These informal video chats, moderated by Sidley partner Alan Raul, are designed to help fill the COVID-19 induced privacy discussion drought. We look forward to hearing what is on the mind of key data protection and cybersecurity thought leaders from both public and private sectors. Each chat will be relatively brief, leaving some time to address participant questions via our virtual space. Please feel free to suggest any topics you would be interested to hear addressed by contacting email@example.com.
The California Privacy Rights Act (CPRA), a proposed initiative to codify far-reaching amendments to the California Consumer Privacy Act (CCPA) and sometimes referred to as “CCPA 2.0”, is back in play and heading to the November 2020 ballot. A series of dramatic procedural twists and turns culminated with initiative backers successfully obtaining a writ of mandate directing the Secretary of State to direct counties to verify signatures for the ballot proposal by the June 25th Constitutional deadline. This verification involved each county conducting a random sample of the more than 800,000 signatures that proponents had submitted to place the initiative on the ballot.
Before the California court’s ruling, observers were skeptical that signatures could be verified before the deadline. Initiative proponents were almost two weeks behind the recommended schedule when they delivered signatures to be verified by California’s 58 counties. This meant counties had until June 26th to verify signatures — a day after the June 25th Constitutional deadline. Experience with other initiatives this year had shown that several large counties were waiting until the deadline to complete verifications, so proponents petitioned the court to push the deadline up by a day in order to meet the Constitutional deadline. The court agreed to do so, finding good cause existed to force counties to complete verifications a day early. And, as it happened, the extra time was not needed, as counties finished the count two days ahead of their initial deadline.
On June 10, the Financial Industry Regulatory Authority (FINRA) released its Artificial Intelligence (AI) in the Securities Industry Report (Report), a culmination of a two-year review by FINRA’s Office of Financial Innovation to learn about the emerging challenges confronted by broker-dealers (Firms) and other market participants as they introduce AI-based applications into their businesses. The Report provides an overview of AI technology, explores its diverse, multifaceted applications in the securities industry and identifies the challenges and legal considerations with leveraging this technology. FINRA requests industry feedback on topics covered in the Report by August 31, 2020.
*Article first appeared in The Hill on June 13, 2020.
Concerns over the use of location tracking and contact tracing of infected individuals to help mitigate the spread of COVID-19 have once again placed “privacy” at the forefront of public attention. And even though Congress declared privacy to be a fundamental right in 1974, it established no cabinet office or institutional framework to focus on the role of data protection and digital technology in our society. Consequently, during these days of COVID-19, there is no senior government official responsible for taking account of and balancing the trade-offs between privacy and public health.