NY DFS Proposes New Class of Entities and More Detailed Regulations in Second Amendment to Cybersecurity Regulations

On November 9, 2022, the New York Department of Financial Services (DFS) published its proposed second amendment to its cybersecurity regulations (23 NY CRR Part 500). This proposal follows a July 29 pre-proposal and comment period. The amendment is available for a sixty-day comment period – until January 9, 2023 – after which the agency may adopt final regulations or issue a further revised version.

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Drizly FTC Order Introduces Significant Minimization, Deletion and Retention Requirements

On October 24, 2022, the Federal Trade Commission (“FTC”) issued an order (the “Order”) against the online alcohol marketplace, Drizly, and its CEO, James Cory Rellas, alleging security failures that resulted in a data breach exposing the personal information of approximately 2.5 million consumers. In reaching this conclusion, the FTC alleges that Drizly failed to implement reasonable safeguards to protect the personal information it collected and stored, such as, two-factor authentication for GitHub, access controls for personal data, sufficient written security policies, and appropriate employee training regarding security.

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European Commission Publishes Draft Cyber Resilience Act

On 15 September 2022, the European Commission (“Commission” or “EC”) published a draft proposal for a Cyber Resilience Act (“CRA” ). The CRA comes in response to the increasingly common occurrence of cyberattacks, with some predicting that the global cost of cyberattacks for companies will reach $10.5 trillion annually by 2025, up from $3 trillion in 2015. The CRA promises to transform the European cybersecurity landscape by harmonizing and bolstering cybersecurity rules across all technologies with “digital elements.” The Commission is currently inviting public feedback on the CRA through 18 November 2022. The CRA will then pass through the European Parliament for debate and for amendments to be proposed.

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CFPB Begins Rulemaking on Data Access and Portability

The Consumer Financial Protection Bureau (CFPB) on October 27, 2022 took the long-anticipated first step to issue a regulation implementing Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This followed a preview by CFPB Director Rohit Chopra at the Money 20/20 conference on October 25 in which he outlined the “CFPB’s new approach to regulation,” which is designed to create “catalysts for more competition.” With respect to Section 1033, Director Chopra said that the CFPB is “exploring safeguards to prevent excessive control or monopolization by one, or even a handful of, firms” and will be working toward avoiding regulations that could be “rigged in favor of some players over others.” Director Chopra’s focus on competition as an essential element of consumer protection has been a hallmark of his directorship.

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HHS Office for Civil Rights Releases Webinar on Recognized Security Practices: Provides Guidance on Mitigating Potential Violations of HIPAA

Pursuant to legislation passed in 2021, covered entities and business associates subject to HIPAA and facing potential regulatory enforcement may receive some credit lessening to reduce enforcement penalties if they had implemented Recognized Security Practices (RSPs) within the prior 12 months.  However, what may constitute RSPs and how a covered entity or business associate can demonstrate implementation of RSPs to receive such credit had not been clear.  Now, the Department of Health and Human Services is seeking to provide clarity. (more…)

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Developments to Improve the Cybersecurity of Federal Government Agencies, Critical Infrastructure

Recently, several developments have been proposed or announced to help identify and mitigate cyber risk for United States critical infrastructure operators and software in an effort to further bolster the cybersecurity posture of the federal government. (more…)

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White House Publishes In-Depth Guidance on the Use of Automated Systems and Recognizes Privacy as Foundational Principle of Framework

On October 4, 2022, the White House Office of Science and Technology Policy published The Blueprint for an AI Bill of Rights: Making Automated Systems Work for the American People (the “AI Blueprint”). The AI Blueprint outlines non-binding guidelines for the development and deployment of automated systems and is the culmination of a year-long process of public engagement and deliberation.

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U.S. Treasury Department Seeks Public Comment On Potential Federal Cyber Insurance Program

The U.S. Treasury Department is seeking public comment on the need and scope for a potential federal insurance response to catastrophic cyber incidents, akin to the one put in place for terrorism insurance after the attacks of September 11, 2001.

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U.S.-EU Data Transfer Framework Signals Strengthened Collaboration

*This article first appeared on Law360 on October 14, 2022

A series of coordinated announcements on Oct. 7 lifted the veil on a new trans-Atlantic data transfer mechanism.

This announcement has been hotly anticipated since a joint declaration from the U.S. and European Union governments on March 25, that there was an agreement in principle for a new EU-U.S. Data Privacy Framework.

The key document in the framework process is Executive Order No. 14086 on enhancing safeguards for U.S. signals intelligence activities, accompanied by a detailed fact sheet on the executive order.

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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.

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