The Small Business Administration (SBA) is having some technical issues, to say the least. Small government agencies are notorious for suffering from technological inadequacy and poor information security measures, and the SBA appears to be no exception as it forms a bottleneck between small businesses and federal aid.

As part of its compliance with law, the SBA sent a “Data Breach” notification to as many as 8,000 Economic Injury Disaster Loan (EIDL) applicants. The SBA recently expanded the EIDL’s coverage to assist small businesses affected by the fallout of COVID-19. Though the loans were targeted at providing quick relief and funds were supposed to be delivered just a few days after application, many applicants waited weeks and continue to wait. The SBA seemingly did not have the technical processes in place to handle the deluge of applications it received. Unsurprisingly, delays, system crashes, and even a data breach occurred. Specifically, a flaw in the SBA’s loan application portal allowed applicants to see another user’s information if the back button was clicked. The SBA disabled that part of the site and fixed the bug, but not before inadvertent disclosures occurred.

Continue Reading Technical Woes at the SBA Cause Data Breach and Continue to Cause Delays

The start of 2020 did not just bring us the effective date of the California Consumer Privacy Act (CCPA). It also lead to several state legislators introducing their own versions of potentially ground-breaking privacy and data security laws. Each law has nuances that will likely result in a compliance nightmare, particularly if all or most of the states and territories enact their own law. However, each also appears on its face to riff on either the EU’s General Data Protection Regulation (GDPR) or the CCPA.

The chart below provides a list (current as of April 14, 2020) of proposed state privacy legislation that could still be enacted this session. The purpose of the chart is to provide the broad strokes of each proposed law, show their similarities, and highlight key differences. The question is whether the GDPR and/or CCPA actually provide the most appropriate models to emulate? The CCPA is perceived and touted by many as the first and most comprehensive privacy and data security law of its kind in the US, but we can’t help but wonder: does first necessarily mean best?

States that considered but ultimately chose not to pass proposed privacy legislation in 2020 include: Florida, Maryland, Virginia, Washington, and Wisconsin. Continue Reading What’s the Deal with the Other State Privacy Bills?

On April 6, 2020, the Federal Trade Commission (FTC) announced a settlement with Tapplock, Inc., resolving allegations that the Canadian smart lock manufacturer violated Section 5 of the FTC Act by misrepresenting the security of its lock and of its consumers’ personal information.  Following is a closer look at the settlement and underlying complaint, as well as an overview of the current recommendations for IoT device manufactures issued by the National Institute of Standards and Technology (NIST) in its most recent draft of the “Core Baseline” guide. Continue Reading FTC Taps into Tapplock’s Security Claims

Over the last several weeks, while Americans have grown accustomed to working from home, home schooling, and life in lockdown during the COVID-19 pandemic, the Zoom videoconferencing service has surged in popularity for every imaginable form of gathering, professional and personal. Zoom has become the service of choice – from team meetings to kids’ story times; from religious services to happy hours; from corporate onboarding to every manner of more “intimate” get-togethers for individuals who are following government-mandated social distancing guidelines.

The media and then, in quick succession, regulators, plaintiffs’ lawyers, and even Congress, began to scrutinize, publicize, and take legal action with respect to what were perceived as privacy or data security flaws from the latest technology darling. The result is a still-evolving case study in the classic reactionary American response to privacy and data security concerns, a phenomenon we have seen again and again in this practice space.

What sins has Zoom actually committed? Are they really so “shocking” from a privacy and data security perspective? In violation of law? Just not best practice? Creepy? And has Zoom’s iterative response served as a wet blanket or fuel for the inferno?

In this post, I explore the who, what, why, when, and how of this, at least as much as we can say as we sit here today. And because I am a hopeless nerd, I have chosen the format required by California’s data breach notification law, California Civil Code § 1798.82(d)(1), as the very best way to tell this story. We are going to use this blog post as a jumping off point for a free live and recorded roundtable discussion webinar (using WebEx [insert winking emoji here]) on April 14, 2020, at 12:30 pm Eastern/9:30 am Pacific. You can register here. Continue Reading A Big Zooming Mess: A Cautionary Tale

By Nicole Hyland and James Mariani

Every day, clients entrust their lawyers with confidential information.  Whether in a matrimonial dispute, high-stakes corporate acquisition, commercial litigation, criminal defense matter, or any other sensitive legal issue, clients rely on their lawyers to safeguard information that could be detrimental or embarrassing to the client if disclosed.  A lawyer’s ethical obligation to protect such confidential information is embodied in Rule 1.6 of the Rules of Professional Conduct (“RPCs”), which states in relevant part that “a lawyer shall not knowingly reveal confidential information.” The duty of confidentiality is not limited, however, to intentional disclosures.  Rule 1.6(c) also requires a lawyer to “make reasonable efforts to prevent the inadvertent or unauthorized disclosure or use of, or unauthorized access to” confidential information. Continue Reading Once More Unto the Breach: A Timely Lawsuit Raises Questions About the Duty to Notify Clients of a Data Breach

Over the past several weeks, the California Attorney General (“AG”) published revisions to its proposed regulations implementing the CCPA (the “Modified Regulations”), and then further revised the Modified Regulations (“Version 2”).  Despite earlier warnings to the business community that AG’s initial draft of Regulations would not materially change, we’ve now seen it happen twice.  The full redlines of both the Modified Regulations and Version 2 are available here. This article highlights what’s new, what remains the same, what we expect to have the biggest impact on businesses working toward compliance, and the lack of predictability of next moves given the growing global health crisis.   Continue Reading CCPA Update: Oops, the CA AG Did It Again

Welcome to 2020. The California Consumer Privacy Act (“CCPA”) is now in effect, and your business has probably spent significant time and expense preparing for the law. With so much focus on CCPA preparations, it’s important to recall that the CCPA isn’t the only California privacy law to become effective this year. California will now also require any business that meets the definition of a data broker during a given year to register as a data broker with the California Attorney General’s Office on or before January 31st of the following year. Although the law is not clear whether it retroactively applies to business practices in 2019, the California Office of the Attorney General has issued a press statement on data broker registration and posted a registration page, which strongly indicates that the AG expects qualifying businesses to register by January 31, 2020.

Continue Reading Data Broker Registration for California is Live

On Thursday, October 10, 2019, only 83 days before the California Consumer Privacy Act (“CCPA”) was set to become effective, California Attorney General Xavier Becerra held a press conference, with no prior notice, and issued his long awaited proposed regulations (the “Regulations”). The hope had been that the Regulations would provide much needed guidance to businesses of all sizes and in all industries as to how to implement a law that was hastily passed in a week’s time in 2018. Instead, while the Regulations provide some clarity around the mechanisms that organizations may use to verify and respond to the various consumer requests allowed by the law, the Regulations also add even more ambiguity to a number of requirements. Even more concerning, the Regulations add some new requirements and deadlines that do not exist in the statute itself.

The Regulations include 24 pages of legalese. Every privacy lawyer I know – and I know the best and the brightest – is struggling to interpret these Regulations and what they really mean. That does not bode well for businesses who (1) are trying to run businesses and not become privacy experts; and (2) cannot afford experienced privacy counsel. And that, in turn, does not help California consumers. As I have said many times before, California can do better. I call again on all California businesses of any size, and in every industry, to submit comments to the Attorney General to let the AG know the impact on your business and the California economy. Comments are due on or before December 6.  There will also be hearings around the state December 2-5. Let’s show up and be heard.

With that, we give you a summary of the Regulations. I would say enjoy, but I know better.

Continue Reading The California AG’s Proposed CCPA Regulations are Live, but Not Ready for Prime Time

On July 24, 2019, the FTC announced a $5 billion settlement with Facebook to address Facebook’s alleged violations of the FTC Act and its 2012 consent order with the FTC. The settlement comes as no surprise to the privacy community – Facebook has been closely scrutinized by the public and regulators since the Cambridge Analytica data incident in March 2018 and indicated to investors earlier this year that it anticipated a fine from the FTC between $3 and $5 billion.

We have read the complaint, settlement, and press releases issued by the FTC and Facebook, and provide our thoughts below on what it means for business: Continue Reading Business Takeaways from the FTC $5 Billion Settlement with Facebook