Socially Aware will be sponsoring a free webinar on cybersecurity-related legal issues on December 2, 2014.  As part of the webinar, privacy and data security lawyers from Morrison & Foerster LLP – including a number of Socially Aware contributors – will discuss the cybersecurity trends and challenges, addressing current and pending laws and regulations in

For many companies, the main question about cloud computing is no longer whether to move their data to the “cloud,” but how they can accomplish this transition. Cloud (or Internet-based on-demand) computing involves a shift away from reliance on a company’s own local computing resources, in favor of greater reliance on shared servers and data

From our sister blog, MoFo Tech:

Within a decade, analysts say, the “Internet of Things” will have transformed our lives. Billions of Internet-connected devices will monitor our homes, businesses, cars, and even our bodies, using the data to manage everything from appliances to heart monitors. Companies like Google— which recently paid $3.2 billion for

Not to be outdone by Florida, California has yet again amended its data security breach law and again in groundbreaking (yet confusing) fashion. On September 30, 2014, California Governor Brown signed into law a bill (“AB 1710”) that appears to impose the country’s first requirement to provide free identity theft protection services to consumers in connection with certain data security breaches. The law also amends the state’s personal information safeguards law and Social Security number (“SSN”) law. The amendments will become effective on January 1, 2015.

Free Identity Theft Protection Services Required for Certain Breaches

Most significantly, AB 1710 appears to amend the California breach law to require that a company offer a California resident “appropriate identity theft prevention and mitigation” services, at no cost, if a breach involves that individual’s name and SSN, driver’s license number or California identification card number. Specifically, AB 1710 provides, in pertinent part, that if a company providing notice of such a breach was “the source of the breach”:

an offer to provide appropriate identity theft prevention and mitigation services, if any, shall be provided at no cost to the affected person for not less than 12 months, along with all information necessary to take advantage of the offer to any person whose information was or may have been breached.

The drafting of this requirement is far from clear and open to multiple readings. In particular, the use of the phrase “if any” can be read in multiple ways. For example, the phrase “if any” can be read to modify the phrase “appropriate identity theft prevention and mitigation services.” Under this reading, the law would impose an obligation to provide free identity theft protection services if any such services are appropriate. The phrase “if any,” however, could be read to modify the “offer” itself. Under this alternate reading, the law would provide that if a company intends to offer identity theft protection services, those services must be at no cost to the consumer. It is difficult to know how the California Attorney General (“AG”) or California courts will interpret this ambiguity. One thing is clear: until the AG or courts opine, the standard will remain unclear.

The drafting of the requirement also is not clear in other ways. For example, the statute does not specify what type of services would qualify as “appropriate identity theft prevention and mitigation services.” For example, would a credit monitoring product alone be sufficient to meet the requirement? Or would the law require something in addition to credit monitoring, such as an identity theft insurance element?

Nonetheless, state AGs historically have encouraged companies to provide free credit monitoring to consumers following breaches. In addition, even though not legally required, free credit monitoring has become a common practice, particularly for breaches involving SSNs and also increasingly for high-profile breaches. Nonetheless, California appears to be the first state to legally require that companies offer some type of a free identity theft protection service for certain breaches.

AB 1710 is particularly notable in its approach. First, the offer of free identity theft protection services will only be required for breaches involving SSNs, driver’s licenses or California identification card numbers. In this regard, an offer of free identity theft protection services will not be required for breaches involving other types of covered personal information, such as payment card information or usernames and passwords. This approach endorses a position that many companies have long held—that credit monitoring is appropriate only when the breach creates an actual risk of new account identity theft (as opposed to fraud on existing accounts). In addition, the offer of free identity theft protection services will only be required for a period of one year (as opposed to, for example, two years). The length of the offer of free credit monitoring has always been an issue of debate, and California has now endorsed a position that a one-year offer is sufficient.


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Big Brother isn’t just watching. A single mother in upstate New York was surprised to find that she had a Facebook page in her name, complete with photos of her, her son, and her niece. She hadn’t actually set up the page. It turned out that she was being investigated as a bit player in

In November 2012, we wrote an Alert about the European Commission’s Communication on Cloud Computing intended, it said, to “… unleash the potential of cloud computing in Europe”.  Sceptics were doubtful that the cloud industry needed much help from European regulators to thrive.

Twenty months later, the Commission has begun to deliver on its key actions in the Communication with the publication of its Cloud Service Level Agreement Standardisation Guidelines.

How helpful are these Standardisation Guidelines to the cloud sector at this point in its development?

The recently-issued Cloud Service Level Agreement Standardisation Guidelines have their origin back in November 2012.  At that time, the European Commission issued a Communication setting out a road map for the future growth of cloud computing in Europe.

In the 2012 Communication, the Commission set out a number of key actions, including to cut through the jungle of standards and to promote safe and fair cloud contracts.  The Commission believes that the development of model terms for cloud computing – and, specifically, service level agreements in the cloud sector – is one of the most important issues affecting the future growth of the cloud industry in Europe, and that standardising the approach to cloud services will enable buyers of cloud computing services to make fair comparisons between different providers’ offerings.


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The latest issue of our Socially Aware newsletter is now available here.

Welcome to a special privacy issue of Socially Aware, focusing on recent privacy law developments relating to social media and the Internet. In this issue, we analyze a controversial European ruling that strengthens the right to be forgotten; we examine a

Snapchat’s recent settlement with the Federal Trade Commission (FTC) generally provides a comprehensive but not groundbreaking roadmap to the FTC’s privacy and data security expectations in the mobile environment under Section 5 of the FTC Act, with two very notable exceptions:

  1. It now appears that companies are required to follow researchers’ blogs and other writings to see if there are any privacy or data security vulnerabilities, and to act on any such information promptly; and
  2. It also appears that the FTC expects companies to be aware of all third parties who have technology that can interact with an app, and to make sure that when consumers engage in any such interaction, all of the company’s privacy and data security representations remain true. If the FTC continues down this path, it will create unsustainable new burdens on app developers, many of which have very few resources to begin with. Furthermore, if this is the new standard, there is no reason it should be limited to the app environment—analytically, this would lead to a rule of general application.

THE BASIC ALLEGED MISREPRESENTATION

The Snapchat app became very popular because of its branding as an “ephemeral” mobile messaging service. Among other things, the app promised its users and prominently represented—in its privacy policy and an FAQ, among other places—that the “snaps” (e.g., messages) users sent would “disappea[r] forever” after 10 seconds (or less). However, according to the FTC’s complaint, in addition to other problems with the app’s privacy and security features, it was much too easy to capture these supposedly ephemeral messages, making the company’s claims false and misleading in violation of Section 5. And since the company’s representations were not consistent with the app’s practices, now it’s the FTC that won’t be disappearing any time soon.
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Cisco estimates that 25 billion devices will be connected in the Internet of Things (IoT) by 2015, and 50 billion by 2020. Analyst firm IDC makes an even bolder prediction: 212 billion connected devices by 2020. This massive increase in connectedness will drive a wave of innovation and could generate up to $19 trillion in savings over the next decade, according to Cisco’s estimates.

In the first part of this two-part post, we examined the development of, and practical challenges facing businesses implementing, IoT solutions. In this second part, we will look at the likely legal and regulatory issues associated with the IoT, especially from an EU and U.S. perspective.

The Issues

In the new world of the IoT, the problem is, in many cases, the old problem squared. Contractually, the explosion of devices and platforms will create the need for a web of inter-dependent providers and alliances, with consequent issues such as liability, intellectual property ownership and compliance with consumer protection regulations.
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