Advancements in technology appear to have spurred the Federal Trade Commission to initiate a review of its rule promulgated pursuant to the Children’s Online Privacy Protection Act (the “COPPA Rule” or “Rule”) four years ahead of schedule. Last week, the FTC published a Federal Register notice seeking comments on the Rule. Although the FTC typically reviews a rule only once every 10 years and the last COPPA Rule review ended in 2013, the Commission unanimously voted 5-0 to seek comments ahead of its next scheduled review. The Commission cited the education technology sector, voice-enabled connected devices, and general audience platforms hosting third-party, child-directed content as developments warranting reexamination of the Rule at this time.

Background

The COPPA Rule, which first went into effect in 2000, generally requires operators of online services to obtain verifiable parental consent before collecting personal information from children under the age of 13.  In 2013, the FTC amended the COPPA Rule to address changes in the way children use and access the internet, including through the increased use of mobile devices and social networking.  Its amendments included the expansion of the definition of “personal information” to include persistent identifiers that track online activity, geolocation information, photos, videos, and audio recordings. The new review could result in similarly significant amendments.

Questions for Public Comment

In addition to standard questions about the effectiveness of the COPPA Rule and whether it should be retained, eliminated, or modified, the FTC is seeking comment on all major provisions of the Rule, including its definitions, notice and parental consent requirements, exceptions, and security requirements.
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Nevada just joined California as the second state to enact an opt-out right for consumers from the “sale” of their personal information. Senate Bill 220, which was signed into law on May 29, 2019, is scheduled to take effect on October 1, 2019, three months prior to its precursor under the California Consumer Protection Act (the CCPA). The opt-out right is one of several changes made to Nevada’s existing online privacy law, which requires operators of commercial websites and other online services to post a privacy policy. In addition to the new opt-out right, the revised law exempts from its requirements certain financial institutions, HIPAA-covered entities, and motor vehicle businesses.
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A federal district court in California has added to the small body of case law addressing whether it’s permissible for one party to use another party’s trademark as a hashtag. The court held that, for several reasons, the 9th Circuit’s nominative fair use analysis did not cover one company’s use of another company’s trademarks as

One of the next big items in Europe will be the expansion of “ePrivacy,” (which, among other things, regulates the use of cookies on websites). While the ePrivacy reform is still being worked on by EU lawmakers, one of the items the ePrivacy Regulation is expected to update is the use of “cookie walls.” Recently, the Austrian and UK data protection authorities (DPAs) issued enforcement actions involving the use of cookie walls, albeit with different findings and conclusions.

Cookie Walls

A cookie wall blocks individuals from accessing a website unless they first accept the use of cookies and similar technologies. The practice of using cookie walls is not prohibited under the current ePrivacy Directive.

However, the European Data Protection Board (EDPB), the successor to the Article 29 Working Party, has issued a non-binding opinion that the use of cookie walls should be prohibited under new EU ePrivacy rules. The EDPB argues that cookie walls run contrary to the General Data Protection Regulation (GDPR): “In order for consent to be freely given as required by the GDPR, access to services and functionalities must not be made conditional on the consent of a user to the processing of personal data or the processing of information related to or processed by the terminal equipment of end-users, meaning that cookie walls should be explicitly prohibited.”


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As close observers of the implications of privacy law on companies’ data collection, usage and disclosure practices, we at Socially Aware were among the many tech-law enthusiasts anticipating the U.S. Supreme Court’s recent decision in Carpenter v. United States, in which the Court held that the government must obtain a warrant to acquire customer location information maintained by cellular service providers, at least where that information covers a period of a week or more.

Authored by Chief Justice John Roberts, the 5-4 opinion immediately enshrines greater protections for certain forms of location data assembled by third parties. It also represents the Court’s growing discomfort with the so-called “third-party doctrine”—a line of cases holding that a person does not have a reasonable expectation of privacy in records that he or she voluntarily discloses to a third party. In the longer run, there will likely be further litigation over whether the same logic should extend Fourth Amendment protections to other types of sensitive information in the hands of third parties as courts grapple with applying these principles in the digital age.

Background

Anytime a cell phone uses its network, it must connect to the network through a “cell site.” Whenever cell sites make a connection, they create and record Cell Site Location Information (CSLI). Cell phones may create hundreds of data points in a normal day, and providers collect and store CSLI to spot weak coverage areas and perform other business functions.
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Companies that offer services, whether online or offline, to consumers on a subscription or other automatic renewal basis should be aware that such offers are heavily regulated at both the federal and state levels. A recent amendment to Section 17602 of California’s Business and Professions Code provides a good opportunity for businesses that make subscription offers to review their practices. As of July 1, 2018, the obligations under California law will expand in two ways that may require businesses to update those practices.

The first change relates to the information that businesses must provide to consumers regarding the terms of a subscription offer. The current law already requires a business to provide certain information about the renewal process—such as the amount of the recurring charges, the length of the renewal period, and the cancellation policy—both before the consumer accepts the agreement, and afterwards in an acknowledgement. The amendment provides that, as of July 1, 2018, if the offer includes any free trial or gift component, the information provided to consumers must also include a “clear and conspicuous explanation of the price that will be charged after the trial ends or the manner in which the subscription or purchasing agreement pricing will change upon conclusion of the trial.”
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After British police unsuccessfully tried to get the blogging platform WordPress.com to remove offensive and threatening posts, the deputy leader of the UK’s Labour Party vowed to urge changes that would make the country’s laws less tolerant of online abuse.

As bipartisan U.S. legislation to prevent the appearance of foreign-entity-funded political ads on social media

With much fanfare, the Federal Trade Commission (FTC) continues to take actions relating to so-called “social media influencers” who allegedly fail to disclose material connections to the products or brands they endorse. Recurring enforcement actions and guidance—and the FTC’s ongoing promotion of its own efforts, such as through Twitter chats—make it clear that the FTC believes that its message has still not been heard by all of the players in this advertising ecosystem, including influencers themselves.

In short, any endorsements in any medium where the endorser has a material connection of any kind to the endorsed advertiser must be disclosed.

The most recent developments include an enforcement action against a company—and two of its officers—in connection with endorsements of the company made by the officers in YouTube videos and in social media.  Before turning to this case, however, we provide a brief overview of how the FTC has gotten here.
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Recent challenges to the Federal Trade Commission’s (FTC) authority to police data security practices have criticized the agency’s failure to provide adequate guidance to companies.

In other words, the criticism goes, businesses do not know what they need to do to avoid a charge that their data security programs fall short of the law’s requirements.

A series of blog posts that the FTC began on July 21, 2017, titled “Stick with Security,” follows promises from acting Chair Maureen Ohlhausen to provide more transparency about practices that contribute to reasonable data security. Some of the posts provide insight into specific data security practices that businesses should take, while others merely suggest what, in general, the FTC sees as essential to a comprehensive data security program.
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As Socially Aware readers know, privacy and data security issues are among the most critical legal issues confronting companies that do business online. With ransomware attacks and hacking incidents on the rise, and with privacy and data security laws becoming increasingly burdensome, companies are spending more time and resources than ever before addressing privacy and