When the law was signed by then Governor Brown (see our prior Alert here), the expectation was that Attorney General Becerra would issue the enabling regulations by July of this year, which would allow a phase-in period. Then by January 1, 2020, the requirements would be clear and companies would be able to properly formulate and implement their compliance policies. Regretfully, things are not going as expected.
First, in accordance with the law, General Becerra organized a series of public meetings: (more…)
In the last week, both the Dept. of Homeland Security and the Food and Drug Administration have issued a consumer alert about the potential hacking risk regarding cardiac devices, specifically because those devices have no encryption on their software. The devices in question are implantable cardiac devices, clinic programmers and home monitors which are used to regulate one’s heartbeat rate – to speed it up or slow it down, as needed. The focus this time is on the Medtronic Conexus Radio Frequency Telemetry Protocol. Given this latest notice, one has to wonder what will be the impact of the California IoT law.
What both federal agencies had to say is short range access allows interference with, generation, modification or interception of communications. There is also the ability to read/write any valid memory location on the implanted device and, therefore, impact its intended functionality. (more…)
In a compromise to avoid a ballot measure, at the very last moment on the very last day, just before the stroke of midnight, on June 29, 2018, the California legislature passed and Governor Brown signed into law the California Consumer Privacy Act of 2018 (the “Act”), which takes effect on January 1, 2020. Many of its provisions are similar to the General Data Protection Regulations (“GDPR”), which took effect in Europe at the end of May, and required companies to institute new internal data privacy regimes. So, while those companies which prepared for the GDPR are well on their way to gaining compliance with this new law, there is still much to be done by them and especially those companies which were not impacted by the GDPR. (more…)
On May 25, 2018, important European regulations regarding data privacy and protection go into effect that will have a major impact on American companies, many of whom don’t realize they will be subject to compliance with its requirements. The General Data Protection Regulations (the “GDPR”) will have severe penalties for non-compliance (as high as €20 million or 4% of annual worldwide turnover). The GDPR will also have very broad territorial reach applying not only to European entities, but also to entities located outside of Europe (including those in the U.S.) that process the personal data of living European individuals residing in the covered countries, including if the company:
Offers goods or services to individuals in the covered countries (e.g., e-commerce, capital raising, fund raising, immigration);
Employs individuals in one or more of the countries;
Monitors the behavior of individuals in any of these countries; and
Collects, stores, or processes the personal data of affected individuals on behalf of others.
For these purposes, the European definition of personal data mirrors nicely the American definition of personally identifiable information. Given the severe penalties and broad reach, it is important that each company in the U.S. consider whether the GDPR applies to its operations and, if so, how best to comply. (more…)
With increased attention to how securities laws may apply to digital token sales and the disruptive nature of increased cyber threats to the investor community, the Securities Exchange Commission (“SEC”) last week announced two new initiatives. The SEC’s press release, found here, outlined the creation of the Cyber Unit (“Unit”) and the Retail Strategy Task Force (“RSTF”).
According to the press release the Unit will focus the Enforcement Division’s substantial cyber-related expertise on targeting cyber-related misconduct, including: (more…)
Just about every survey of General Counsels reveals the same #1 culprit of sleepless nights….. a cybersecurity hack. If you run a business in today’s global environment, it is hard to escape the fundamental reality that it is more than likely a matter of when, not if, you will face a cyber threat. And depending on the nature of your business, that threat can have a wide range of implications. If you are a public company, there is an additional issue to consider… what do you have to disclose to your investors and shareholders?
Being prepared for a hack with a comprehensive written information security plan and an equally robust incident response plan is just one component to be considered if you are a public company. You must also have a plan to meet your reporting and disclosure obligations to a variety of governmental bodies. While measuring your response needs in the wake of a hack, and determining if there are state, federal or international laws and regulations that require reporting, you must also pay close attention to possible disclosure obligations in your SEC filings. Specifically, if you have tripped a disclosure to a state attorney general or your company’s customers, then it is possible you may also have a disclosure obligation to your shareholders. (more…)
Recently, there has been much discussion about the Superior Court of Pennsylvania’s ruling in Dittman v. UPMC, which affirmed a lower court’s order dismissing an employee class action against their employer over a data breach. While this was a significant victory for employers, non-Pennsylvania employers should temper their enthusiasm. As one recent federal court decision in California makes clear, the reasoning of Dittman may not extend far beyond, if at all, the borders of Pennsylvania. Moreover, regardless of their outcomes, both cases also reinforce the need for employers to maintain legally compliant, written policies for safeguarding private information and responding to data breaches.
In Dittman, a data breach resulted in the theft of the personal information (e.g., names, birth dates, social security numbers, banking information) of approximately 62,000 UMPC current and former employees. The information was used to file fraudulent tax returns and steal tax refunds from certain employees.
Daily headlines of data breaches, resulting class actions, governmental investigations and enforcement actions, and the settlements of those actions serve as constant reminders of the need to implement and maintain reasonable cybersecurity measures. Yet another example can be found in the recent announcement by the Federal Trade Commission, which states that the operators of Ashley Madison have agreed to settle the charges brought against them by the FTC and over a dozen state attorneys generals arising out of the July 2015 data breach of Ashley Madison’s network. Analyzing the settlement also provides additional guidance on what regulators mean when they refer to reasonable safeguards.
Yesterday, the Article 29 Working Party took action which some found surprising and others predicted. It found the EU-U.S. Privacy Shield did not contain adequate protections and needs further improvement. The Working Party’s statement can be found here.
While acknowledging the Privacy Shield contains “significant improvements” over the previous Safe Harbor, the Working Party also stated its objective is to “make sure that an essentially equivalent level of protection is maintained when personal data is processed subject to the provisions of the Privacy Shield.” (more…)
Originally published by the Journal of Commerce in January 2016
In writing this article, it was interesting to look back and see whether the old crystal ball was accurate in its predictions in earlier years. Truthfully, the expectation was the old themes were similar over time, and that turned out to be the case. Those earlier articles made clear, the challenges facing businesses in the context of import and export remain complex. By way of example, one constant theme is the rising cost of compliance. A related theme has to do with the expanding complexity of issues demanding compliance efforts. (more…)