U.S. Department of Commerce and European Commission Release Joint Press Statement

On August 10, 2020, the U.S. Secretary of Commerce, Wilbur Ross, and the European Commissioner for Justice, Didier Reynders, released a Joint Press Statement (“Press Statement”) regarding the status of Privacy Shield discussions in light of the Schrems II decision. The Schrems II decision declared that the EU-U.S. Privacy Shield Framework was not a valid mechanism to transfer personal data from the European Economic Area (EEA) to the U.S., which we address in greater detail in a recent Client Alert.

The U.S. Department of Commerce and the European Commission announced that they have initiated discussions to determine the potential for “an enhanced EU-U.S. Privacy Shield” that would comply with the Schrems II decision. Both parties recognize the “vital importance of data protection and the significance of cross-border data transfer to our citizens and economies,” and reiterate a commitment to privacy and the rule of law, as well as the longstanding collaboration between the EU and the U.S. Continue Reading The Department of Commerce Continues Efforts to Address Cross-Border Data Transfers Under the GDPR After the Invalidation of the Privacy Shield

The General Data Protection Regulation (GDPR), Europe’s restrictive data protection law, permits the transfer of personal data from the European Economic Area1 (EEA) to other countries only under limited circumstances. On July 16, 2020, the Court of Justice of the European Union (CJEU or Court) issued a highly anticipated decision in a case brought by Maximillian Schrems, an Austrian privacy advocate, who challenged Facebook Ireland’s reliance on standard contractual clauses (SCCs) as a legal basis for transferring his personal data to Facebook, Inc. in the United States (U.S.). The Court’s decision has two significant results: Continue Reading European High Court Invalidates Privacy Shield, but Upholds Standard Contractual Clauses for International Data Transfers Under the GDPR

In 2009, the Health Information Technology for Economic and Clinical Health (HITECH) Act, imposed direct liability on business associates for certain violations of the HIPAA Privacy, Security, Breach Notification, and Enforcement Rules (the “HIPAA Rules”). The resulting 2013 HHS Office for Civil Rights (OCR) final rule modified the HIPAA Rules accordingly. In May of this year, OCR posted guidance on the HHS website reiterating the parameters of business associate liability, as follows: Continue Reading OCR Guidance May Signal Increase in Enforcement Activity Against Business Associates

As regulators attempt to keep pace with the ever-changing technological landscape, legislation and agency guidance continue to evolve. Two recent developments worth noting:

  1. The clarification and modification of the California Consumer Privacy Act (CCPA)
  2. The release of the U.S. Department of Health and Human Service’s (HHS) voluntary cybersecurity practices for health care organizations

For insights into what these developments may mean for the future of consumer privacy and cybersecurity, please see our latest Client Alert.

All 50 states have enacted their own version of a data breach notification statute requiring notice to affected individuals and/or regulatory bodies in the event of data loss, unauthorized data access or data exfiltration of personally identifiable information (“PII”). Many states, however, do not require such notification when the data at issue is encrypted. But what “encryption” requirements trigger this “safe harbor” provision? Each state’s answer to this question is slightly different. Some states exclude disclosure or access of encrypted PII from the definition of “breach” requiring notice. In such states, notification is required only if the accessed or disclosed PII is unencrypted. In other states, including New York, a “breach” occurs only where there is unauthorized access of both encrypted information and the necessary encryption key. N.Y. Gen. Bus. Law § 899-aa (Westlaw through L. 2019, ch. 1 to 19) (effective Mar. 28, 2013). Unauthorized access of encrypted data alone, therefore, may not necessarily be a breach that requires notice. Continue Reading Encryption Considerations under Data Breach Notification Laws

One of the biggest risks to data security is lack of vendor (third-party) and vendor subcontractor (fourth-party) management. Companies can mitigate ever-increasing vendor data security risk through purchasing appropriate cyber insurance and implementing a vendor risk management program that includes processes for systematically conducting due diligence and contract negotiations.

If primary vendors are not properly assessed, or controls are not placed on subcontractors (i.e., “fourth parties”) that may be used to render primary vendors’ services, numerous unknown parties with varying degrees of security controls can have access to sensitive information without the companies’ knowledge. Companies can contractually address this exposure by requiring pre-approval of fourth parties, imposing security requirements that must be met by fourth parties and/or requiring security reviews of such fourth parties. Vendor and fourth-party risk can also be managed by cyber insurance policies. Continue Reading Cyber Risk: Addressing the Elephant in the Room

The New York State Department of Financial Services (“DFS”) Cybersecurity Regulation (“Regulation”) took effect on March 1, 2017, and applies to those entities operating or required to operate under New York banking, insurance and finance laws (“Covered Entities”). Covered Entities should have been in compliance with portions of the Regulation as of August 28, 2017, for which they certified compliance on February 15, 2018. Continue Reading Be Prepared for the September 3, 2018 Deadline for New York State Department of Financial Services Cybersecurity Regulation Requirements

The SEC’s recent enforcement action and settlement with Altaba (formerly known as Yahoo) over the company’s major data breach provides a suggested roadmap for how companies may want to proactively approach data breach issues. Some major takeaways are: (1) companies should have effective controls in place to assess disclosure obligations; (2) known cyberattacks should, when appropriate, be included in disclosures in public filings; and
(3) if known cyberattacks have a material impact on the business, it requires disclosure. Continue Reading SEC’s Yahoo Enforcement Action and Settlement Provides Further Direction for Companies Following the SEC’s 2018 Cybersecurity Guidance

With Alabama’s recent enactment of the Alabama Data Breach Notification Act of 2018 (“Act”), all 50 states now have their own data breach reporting statutes. Given the complexity of the current U.S. data breach reporting regime, which also includes statutory reporting obligations in jurisdictions like Puerto Rico and the District of Columbia, businesses with customers in more than one state must coordinate with advisors who have experience navigating this patchwork quilt of statutes.

On March 28, 2018, Alabama became the 50th (and final) state to enact a data breach notification law. The Act requires notification where a “good faith and prompt investigation” results in a determination that “sensitive personally identifying information” (“SPII”) of an Alabama resident has been acquired or is reasonably believed to have been acquired by an unauthorized person, “and is reasonably likely to cause substantial harm to the individuals to whom the information relates.”  Continue Reading Now That All U.S. States Have Data Breach Laws, National Breach Reporting Is Even More Complex

Everyone has been to a lot of presentations, read articles and evaluated the General Data Privacy Regulation (“GDPR”) – yet many questions remain.

Many companies continue to struggle with determining whether (1) the GDPR applies to them and, if so, (2) what can be done before the May 25th compliance deadline.

It is not too late to have these questions answered when working with experienced counsel who can navigate the issues at hand. For instance, possession of any European Union (“EU”) resident’s data does not necessary trigger the GDPR. Indeed, making the legal determination regarding the applicability of the GDPR can be completed largely over the phone by discussing key issues and conducting a targeted follow-up investigation. If the GDPR applies, then there are a number of high-impact but manageable tasks that can be accomplished by May 25th. Of course, waiting longer to evaluate these issues only puts businesses at greater risk for the hefty (up to 20 million Euro or 4 percent of annual global revenue, whichever is greater) non-compliance penalties that may be applicable. Continue Reading GDPR – It’s Not Too Late to Work Towards Compliance