SlideShare une entreprise Scribd logo
1  sur  38
Télécharger pour lire hors ligne
FinTech Webinar Series:

CYBERSECURITY AND DATA PRIVACY UPDATE
Jonathan Cedarbaum, Robert Finkel, and Heather Zachary
October 23, 2013
Attorney Advertising
Speakers

Jonathan G. Cedarbaum
Partner
WilmerHale

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

Robert Finkel
Partner
WilmerHale

Heather Zachary
Partner
WilmerHale

WilmerHale

2
Overview
1. Recent Federal Cybersecurity Developments: Executive
Order, NIST Standards, Information-Sharing, Legislation
2. Privacy and Security Issues in Cloud Computing Contracts
3. International Privacy and Transferring Data Across Borders
4. Mobile Devices and Mobile Apps
5. Workplace and Corporate Governance Developments
6. The FTC’s New Rules Concerning Children’s Privacy

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

3
Recent Federal Cybersecurity
Developments

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

4
Executive Order 13636 (Feb. 12, 2013)
 Directs the National Institute of Standards and Technology (“NIST”), through a
consultative process with other agencies and CI owners and operators, to develop
cybersecurity performance standards and methods to reduce risks to CI
(“Cybersecurity Framework”)
 Directs DHS and agencies responsible for CI sectors to create a program to
encourage CI owners and operators to voluntarily adopt the Cybersecurity
Framework established by NIST
 Directs agencies that have statutory authority to regulate CI to determine whether
they have “clear authority” to establish mandatory standards based on the
Cybersecurity Framework and, if current regulatory requirements are deemed
insufficient, to impose such standards through rulemaking
 Expands to all CI sectors the Enhanced Cybersecurity Services Program and requires
key federal agencies to provide more cybersecurity threat information to CI owners
 Instructs GSA and DoD to look into incorporating cybersecurity standards into
federal acquisition and procurement policies
 Requires an annual report to the President about the extent to which CI owners and
operators are participating in the voluntary program.
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

5
Preliminary NIST Cybersecurity Framework
 Preliminary version released October 22, 2013:
http://www.nist.gov/itl/upload/preliminary-cybersecurity-framework.pdf
– 45-day comment period coming
– Final version to be released in February 2014

 Emphasizes risk-management approach to cybersecurity efforts
 Divides Framework into three parts: Core, Profile, Implementation Tiers
 Core: five functions
–
–
–
–
–

Identify
Protect
Detect
Respond
Recover

 For each, categories, e.g., Asset Management, and subcategories, e.g., inventorying of
software platforms and applications
 Profile: establishing an organizational road map to get from here to there, i.e.,
substantially reduced cyber risks
 Implementation Tiers: (i) partial; (ii) risk-informed; (iii) risk-informed and repeatable;
(iv) adaptive
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

6
Preliminary NIST Cybersecurity Framework
 Six-step process for establishing or improving a cybersecurity program
 Appendix B: Methodology to Protect Privacy and Civil Liberties for a Cybersecurity
Progam
– Quite detailed outline of best practices for handling PII
– Legal basis, effects not always clear

 Issues for further development:
(i) authentication;
(ii) automated indicator sharing;
(iii)conformity assessment;
(iv)data analytics;
(v) international aspects, impacts, and alignment;
(vi)privacy; and
(vii)supply chains and interdependencies



Fifth public workshop, Nov. 14-15, N.C. State, Raleigh

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

7
Voluntary Program Development
 Incentives Reports by DHS, Commerce, Treasury:





Better information-sharing
Liability protection, conditioned on adequate insurance coverage?
Technical assistance and training
Grants or, for regulated industries, rate recovery

 Stakeholder meetings led by DHS:



September 23, October 21?, November 18?
Efforts to clarify what is involved in implementation/adoption
–
–

Guidance for sector-specific agencies
Guidance for companies and trade associations or other private-sector
collaborations

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

8
Information-Sharing
 Enhanced Cybersecurity Services (“ECS”) Program
 From 2010 Defense Industrial Base (“DIB”) Pilot
 New, All-Sector ECS:
 Companies must apply to be approved by DHS or SSA as a “critical infrastructure entity”
 Approved commercial service providers (“CSPs) receive threat information from DHS, which
they can use to protect their customers
 If customer agrees, CSP may also share anonymized threat information back with the
Government

 Other Efforts
o Treasury Cyber Intelligence Group
o E.O. directive that DOJ, ODNI, DHS issue instructions for timely production of
unclassified reports on cyber threats to targets of the threats
o FS-ISAC
o Regional Exchanges

 Liability concerns from monitoring and information-sharing:
 Legislative responses?
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

9
Privacy and Security Issues in
Cloud Computing Contracts

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

10
Privacy and Security Issues in Cloud Contracts
 General Regulatory Guidance
– Functions may be outsourced, accountability remains with management and Board

 Recent FFIEC Heightened Interest
– Cloud Computing Statement (July 10, 2012): Cloud as just another form of
outsourcing, but more robust controls may be necessary given Cloud’s nature
– Revisions to IT Exam Handbook; further revisions expected shortly from Cybersecurity
and Critical Infrastructure Committee
– Issuance of Administrative Guidelines on Implementation of Interagency Programs for the
Supervision of Technology Service Providers (October 2012)

 Possible Tensions Between Cloud Model and Regulatory
Approach?
– Guidance is technology agnostic: rules apply regardless of the form of outsourcing
– Industry vendors often approach cloud services as non-customized, uniform service
offerings, different in kind than traditional outsourcing models
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

11
Privacy and Security Issues in Cloud Contracts
 Financial Institution Must Conduct Proper Due Diligence
– Sensitivity of Data and Protective Controls
– Data Segregation , including controls on Integrity and Confidentiality of Data
– Recoverability, including how vendor will respond to disasters

 Information Security
– Continuous Monitoring if high-risk situation
– Cloud Services increase need for encryption and access controls
– Incident Response Methodologies
– Strategies for investigation and forensic collection.

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

12
Privacy and Security Issues in Cloud Contracts
 Robust Termination Rights
– Removal or Deletion of Data at the end of the Contract, regardless of
location; Risk may be higher than in traditional outsourcing
– Right to assign contract to acquirer or in a workout situation

 Other Key Contract Terms
– Prompt Reporting and Remediation of Security Breaches
– Liability caps and disclaimers of certain types of liability
– Vendor monitoring of legislative and regulatory changes
– Costs associated with complying with changes in the law

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

13
Contracting Considerations for EU Data
 Though the EU Data Protection Authorities have differing views, increasingly
they have been adopting the position of the Article 29 Working Party.
– Opinion 05/2012 on Cloud Computing, WP 196, 01037/12/EN (July 1, 2012).

 The Opinion mandates transparency in cloud computing contracts.
Specifically, it states that the cloud provider should disclose to clients:
– all locations where data will be stored; and
– the identities of the cloud provider’s subcontractors.

 The Opinion requires the client to control its data. The contract should:
– bar the cloud provider from processing data for its own purposes;
– give the client power to approve all subcontractors or terminate the contract;
– enable the client to seek a remedy for subcontractors’ privacy violations; and
– require the cloud provider to notify the client of any requests by government
entities for data, unless such notification is prohibited by law.
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

14
Contracting Considerations for EU Data
 If the cloud provider will transfer data from the EU to elsewhere, the parties
must ensure that some mechanism is in place to legitimize the initial transfer
and all onward transfers of the data.
– Examples include the Safe Harbor (controversial), or “model” contractual clauses.

 The contract should require the cloud provider to implement adequate
technical and organizational measures to protect any personal data.
– This is required under Article 17 of the Data Protection Directive as well.

 There should be adequate safeguards to ensure that the cloud provider does
not retain any data that the cloud client decides to delete.
 The cloud provider must cooperate with the client to ensure that individuals’
access, correction, and deletion rights are protected.
 Some EU financial regulators insist on even greater contractual safeguards,
such as audit rights for the client or an examination right for the regulator.
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

15
National Financial Regulators
 Increased interest by financial regulatory authorities in many countries
 Statements on Cloud use: Netherlands, Belgium, Canada, France
 Statements/guidance in the works?: France, Luxembourg, Japan, China, South Korea

 Some trends:

 Some jurisdictions, like the U.S., approach as risk-management issue to be incorporated in
larger risk-management, outsourcing guidance
 But even among some of those, as in U.S., heightened concern, possibility of regulatory
expectations inconsistent with particular data handling practices
 Recent regulatory steps to investigate:
–
–
–
–

Regulatory approval or notification, at least for important operational functions
Audit rights, by regulator or financial institution
Specified contract clauses, e.g., re information access,
Customer consent

 Some jurisdictions more hostile, esp. concerned about data containing customer personal
financial information being held outside national boundaries: South Korea, Singapore?,
Luxembourg?, Switzerland?

 Crucial to investigate particular regulatory requirements country by
country
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

16
International Privacy
and Transferring Data Across Borders

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

17
Post-Snowden Controversies Concerning the Adequacy of
Mechanisms for Protecting EU Data in the United States
 The U.S.-EU Safe Harbor regime has always been controversial with the more conservative
Data Protection Authorities in the EU, and criticism of it has reached new heights recently.
– Several negative reports and guidance documents from DPAs and the European Parliament.
– Proposals to sunset the Safe Harbor immediately or as part of the Data Protection Regulation.

 Though no formal changes have been made, conservative DPAs have made some headway
against the Safe Harbor in the context of service provider relationships. This already is having a
direct impact on FinTech companies that partner with companies in the EU.
– DPAs and others argue that the Safe Harbor cannot legitimize transfers from a “controller” in the
EU to a “processor” in the United States (and especially “onward transfers” from the processor).

 The U.S. Department of Commerce has vigorously resisted such attacks on the Safe Harbor.
– One helpful document is Dep’t Commerce, “Clarifications Regarding the U.S.-EU Safe Harbor
Framework and Cloud Computing.” (Apr. 2013). Though it focuses on cloud computing, it has
clear application to any controller-processor arrangement that a FinTech company might enter into.

 Many FinTech companies are also facing misconceptions about the PATRIOT Act.
Dispelling these (where possible) has been very important to these companies’ bottom lines.
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

18
New Guidance on the EU “Cookie Directive”
 Considerable divergence remains in countries’ interpretations. Some permit an optout approach, while others mandate an opt-in approach for certain types of cookies.
 A paper from the Article 29 Working Party puts more pressure on companies to use
robust forms of consent. It says consent mechanisms should have four elements:
– Working Document 02/2013 providing guidance on obtaining consent for cookies, WP 208,
1676/13/EN (Oct. 2, 2013)
– “Specific information” — Users must receive “clear, comprehensive, and visible notice” about
the cookies used and their purposes (including any third-party cookies or access to cookie data).
– “Timing” — Consent should be obtained before cookies “are set or read,” unless an exception
to consent applies.
– “Active behavior” — Consent must be unambiguous, shown through “an active indication of
the user’s wishes.” For example, clicking on a button or link, ticking a box, or “any other active
behavior from which a website operator can unambiguously conclude” the user has consented.
– “Real choice” — Consent can be valid only if the user has real choice. An operator should not
condition general access to sites on the acceptance of all cookies (e.g., e-commerce site). Users
should be given meaningful choice concerning cookies that are not needed for site functioning.
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

19
Status of the New Data Protection “Regulation”
 The already strict data protection laws in the EU are likely to become even
stricter under the Data Protection Regulation being negotiated.
 Procedural status of the Regulation:
– The regulation has been subject to thousands of amendments over the last few
months. Those amendments were voted on just this Monday by the
European Parliament’s Committee on Civil Liberties, Justice and Home Affairs.
– The draft will weave its way through the EU apparatus, potentially going to a
Conciliation Committee if agreement cannot be reached. Ultimately, the
Council of the European Union, European Parliament, and European
Commission must collaborate on a draft, which will be adopted and signed into
law.
– The Parliament is pushing to get an agreement before the May 2014 elections.
If they don’t meet that deadline, there will be significant delays, and the
adoption of any new Regulation could be in jeopardy.
– Even after the Regulation is enacted, it will not be effective for another two
years.
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

20
Status of the New Data Protection “Regulation”
 The substance of the Regulation remains much in flux. However, the following
provisions (and many more) are included at this time:
– Hefty fines. A company could face significant fines from EU regulators. Under the
current draft, fines for some violations could amount to 100 million euros or five
percent of a company’s annual worldwide turnover, whichever is greater.
– “Anti-FISA” provision. This element of the Regulation was added recently. It had been
included in an earlier draft of the Regulation, but was removed after heavy lobbying by the
United States. After the Snowden revelations, it was reinserted. This provision could put
U.S. companies in the position of choosing to violate either U.S. law or EU law.
– “Right to erasure.” This was originally the “right to be forgotten.” Though still under
debate, it would require erasure of data on request and communication of such requests to
third parties.
– “One-stop-shop” principle. This would allow organizations in the EU to report to just
one data protection authority (their home authority) rather than one (or more) in each EU
member state. That home DPA could issue decisions that are binding throughout the EU.
There is currently debate as to how much influence other DPAs should have with respect
to such decisions, and whether decisions should be reviewable by an independent panel.
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

21
Mobile Devices and Mobile Apps

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

22
Updates to the California Online Privacy Protection Act
There have been important developments concerning the California
Online Privacy Protection Act, which applies to mobile apps.
 The statute requires providers of websites and online services to disclose a
privacy policy to consumers. See Cal. Bus. & Prof. Code §§ 22575 et seq.
 The California AG’s CalOPPA litigation against Delta Airlines was dismissed
for non-privacy reasons. Such litigation could be brought against a new target.
 The legislature amended CalOPPA to require disclosure of more information:
– “whether other parties may collect personally identifiable information about an individual
consumer’s online activities over time and across different Web sites when a consumer
uses the operator’s Web site or service.” California A.B. 370 (Sept. 27, 2013).
– “how the operator responds to Web browser ‘do not track’ signals or other mechanisms
that provide consumers the ability to exercise choice regarding the collection of personally
identifiable information about an individual consumer’s online activities over time and
across third-party Web sites or online services, if the operator engages in that collection.”
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

23
NTIA Multi-Stakeholder Process
 After a year of meetings among industry, consumer advocates, and government
representatives, the NTIA multi-stakeholder negotiations on mobile app transparency yielded
a self-regulatory code of conduct.
 The outcome is controversial. Some industry groups (including the Direct Marketing
Association) and some consumer groups are unhappy with the result.
 The code is voluntary, but for those app developers that do adopt it, it requires short-form
notices that supplement more traditional, longer-form privacy policies. The notices must
(subject to limited exceptions):
– disclose the identity of the entity providing the app;
– explain whether the following data are collected: biometrics; contacts; financial, health, medical, or
therapy info; browser history; call or text logs; location; or user files on the device;
– disclose whether data are shared with ad networks, mobile carriers, data resellers, data analytics
providers, government entities, operating systems/platforms, other apps, or social networks;
– describe a means of accessing a long form privacy policy, if any exists; and
– where practicable, be provided prior to download or purchase of the app.

 Even though the code is voluntary, it could influence mandatory regimes.
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

24
Mobile Apps and Payments
 A number of issues arise in the mobile payments context due to the intersection of
the heavily regulated financial industry with the anything-goes mobile app culture.
 One key issue for mobile payments providers is the appropriate policies:
– Gramm-Leach-Bliley privacy statement
– Online privacy policy
– Short-form mobile app policy
– Other consumer notices required by financial statutes and regulations

 Another issue is E-SIGN Act compliance. Required notices can be provided
electronically so long as specific procedures are followed.
 Though similar in substance, the legal basis for security requirements varies
depending on the type of entity involved, as does the specificity of the guidance.
– Interagency Guidelines issued by the federal functional regulators
– FTC Safeguards Rule
– Federal Trade Commission Act
– State data security laws (e.g., Massachusetts)
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

25
Mobile Security
 Explosion of reliance on mobile devices

 25% of e-commerce Q1 of 2013 as compared to 2% just two years earlier
 Smartphone use average of 150 times/day

 Rise of B.Y.O.D.: Personally owned smart phones, tablets, other
mobile devices used in enterprises now outnumber company-issued
counterparts two to one?
 Some top threats:






Lost, stolen, decommissioned devices; Symantec Honey Stick Project
Information-stealing malware; especially Android apps
Data loss/leakage through poorly designed apps
Vulnerabilities within devices, including insufficient management tools
Unsecured WiFi, network access, rogue access points

 Increased FTC Scrutiny

 Mobile Security Forum, June 2013
 More enforcement activity: e.g., HTC America settlement, Feb. 2013
 Mobile App Developers: Start with Security (Feb. 2013)

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

26
Workplace and Corporate
Governance Developments

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

27
FFIEC Social Media Guidance
 Draft guidance issued January 2013 (78 Fed. Reg. 4848 (Jan. 23, 2013))
 FIs “should have a risk management program that allows [them] to identify,
measure, monitor and control the risks related to social media.”
 Legal risks: application of many laws and regulations to social media use
–
–
–
–
–
–

Truth in SavingsAct/Regulation DD and Part 707, Truth in Lending Act/Regulation Z
Equal Credit Opportunity Act, Fair Housing Act
Fair Debt Collection Practices Act
UDAP prohibition in Section 5 of the FTC Act, UDAAP prohibition in CFPB Act
Electronic Fund Transfer Act, Bank Secrecy Act, Community Reinvestment Act
Gramm-Leach-Bliley Act, the CAN-SPAM Act, TCPA, COPPA

–
–
–
–

on-line fraud and its possible effect on brand identity
reliance on third-party service providers and the need for adequate monitoring
transparency and privacy obligations in dealing with customers and clients
employee use of social media

 Reputational risks

 Operational risks: cf. FFIEC IT Exam Handbook
 Roughly 80 comments received

– Overregulation, lack of flexibility in face of rapid technological evolution
– Difficulties, costs of monitoring, influence third-party activity
– Uncertain applicability, costs of possible disclosure obligations

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

28
Corporate Governance
 SEC





October 2011 Guidance
Continued issuance of inquiry letters
Rockefeller letters to Fortune 500, September 2012
Exchange between Chair White and Senator Rockefeller, April/May 2013

 Management Oversight





Board responsibility
CISO?
Audits and active planning
Don’t wait for a major breach

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

29
Insurance


Market continues to grow – commercial premiums over $1 billion/year – but still
probably only 1/3 or so of U.S. public companies have cyber coverage



Fights in the courts over whether various kinds of cyber-related losses are covered
under more traditional policies are proliferating

– Hartford Casualty Insurance Co. v. Corcino & Assocs., (C.D. Cal. Oct. 7, 2013): exclusion for violations of
statutory rights does not shield insurer for coverage of data breach involving medical information
– Retail Ventures, Inc. v. National Union Fire Insurance Co., 691 F.3d 821 (6th Cir. 2012): remediation costs in
first-party losses under computer fraud rider; exclusion for “proprietary information” not triggered



In selecting cybersecurity insurance, need to understand possible types of loss: not
just first-party versus third-party, but elements
•
•
•
•
•
•
•
•
•
•
•

Replacement or restoration of data
Damage to physical property, such as computers
Business interruption losses
Costs of compliance with consumer notification laws
Costs of internal investigation and response
Remediation costs, such as credit monitoring for affected individuals
Response to government investigations
Regulatory penalties and fines
Judgments, settlements, and defense costs
Public relations expenses
Cyber-extortion

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

30
Big Data
 Definitions

 Volume, Velocity, Variety
 Some sources:
– Social media
– Behavioral tracking
– Machine-generated

 Growing market for enterprise technologies
 IDC: $3.2 to $16.9 billion from 2010 to 2015

 Emerging Issues





Indiscriminate collection/over collection; genuine consent
De-identification
Retention, destruction
Catastrophic breaches: water in a glass vs. water behind a dam

 Increased Regulatory Interest

 FTC: Recent Brill, Vladeck speeches
 Congressional data broker investigations

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

31
The FTC’s New Rules
Concerning Children’s Privacy

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

32
Overview of the Children’s Online Privacy Protection Act
 In its simplest application, COPPA requires that operators of commercial
websites and online services that are “directed to children” must provide notice and
obtain parental consent before collecting or enabling disclosure of “personal
information” from a child online.
– “Online service” is defined broadly. The law applies not just to websites, but also
mobile apps, Internet-enabled gaming platforms, internet-enabled location-based
services, etc.
– There is a multi-factor test for whether a site or service is “directed to children.”
• A portion of a general-audience website can be directed to children (e.g., a “kids korner”).
• Even a general-audience service must comply with COPPA when it has “actual knowledge” that it has
collected personal information from a child or from users of a “child directed” site or service.

– The law requires two types of notice in most circumstances:
•

A COPPA-compliant online privacy policy that discloses certain info specified in the rules; and

•

A notice delivered directly to the child’s parent before collecting any information about the child.

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

33
Overview of the Children’s Online Privacy Protection Act
 In its simplest application, COPPA requires that operators of commercial
websites and online services that are “directed to children” must provide notice and
obtain parental consent before collecting or enabling disclosure of “personal information”
from a child online.
– In many circumstances, a site or service must get consent from the parent prior to
collecting (or disclosing) information from a child. There are a number of
exceptions to this requirement.
– The law governs not just collection of information from children, but also any
features that make it possible for children to disclose information about
themselves (e.g., chat rooms, comment fields).
– “Personal information” is defined extraordinarily broadly, and includes things that
are not considered personally identifiable information in other contexts, such as IP
addresses and cookies.
– A “child” under COPPA is one under the age of 13.
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

34
The FTC’s New COPPA Rules
 The Federal Trade Commission issued new rules interpreting COPPA that
went into effect on July 1st.
 The new rules expand the definition of “personal information”:
– Prior to the amendments, “personal information” included: full name, physical
address, online contact information, telephone number, social security number,
and other information combined with personal information.
– The FTC added four types of information to the definition:
•

Geolocation information sufficient to identify the street name and the name of the
city/town; the FTC clarified that this information is covered by the existing rule

•

Photos, videos, or audio files that contain a child’s image or voice

•

Screen or user names that function like “online contact information”

•

“Persistent identifiers” that can be used to recognize a user over time and across
different sites or services (e.g., cookies, device IDs, IP addresses). [But note: When an
operator collects a persistent identifier and no other personal information, there is no
notice or consent requirement when the identifier “is used for the sole purpose of
providing support for the internal operations of the Web site or online service.”]

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

35
Third-Party Liability and the “Actual Knowledge” Standard
 A general-audience website or service must comply with COPPA when the
operator has “actual knowledge” that it has collected personal information
from a child (e.g., through a customer service interaction or a post on a
monitored message board).
 A third-party plug-in, ad network, or other service that collects personal
information through another site or service must comply with COPPA if it
has “actual knowledge” that it is integrated into a child-directed site or
service.
 Although a strict-liability standard applies for “child-directed sites,” it does
not apply to general-audience services and plug-ins. Instead, a third party
has actual knowledge when:
– The child-directed website or service directly communicates the nature of its
content to the third-party provider; or
– A representative of the third party recognizes the child-directed nature of the site.
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

36
Additional Features of the FTC’s New Rules
 The new rules impose strict liability for child-directed websites and services. This

element is controversial and garnered a dissent from Commissioner Ohlhausen.
 The new rules contain guidance and restrictions for third-party social media plug-ins
(like Facebook share), ad networks, and analytics providers (like Google Analytics).
 Under the old rules, all child-directed sites were required to assume that all users
were under 13 and provide appropriate COPPA protections. The new rules allow a
subset of child-directed sites to age-screen users.
 The new rules permit the use of additional mechanisms for obtaining parental
consent, such as video conferencing.
 The FTC altered (and in some ways streamlined) the privacy policy and parental
notice requirements.
 The new rules strengthen existing security protections and add new obligations
concerning data retention and deletion.
© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

37
Thank You and Contact Information
Jonathan Cedarbaum
+1 202 663 6315
Jonathan.Cedarbaum@wilmerhale.com
Robert Finkel
+1 212 295 6555
Robert.Finkel@wilmerhale.com
Heather Zachary
+1 202 663 6794
Heather.Zachary@wilmerhale.com

Wilmer Cutler Pickering Hale and Dorr LLP is a Delaware limited liability partnership. WilmerHale principal law offices: 60 State Street, Boston, Massachusetts 02109, +1 617 526 6000;
1875 Pennsylvania Avenue, NW, Washington, DC 20006, +1 202 663 6000. Our United Kingdom offices are operated under a separate Delaware limited liability partnership of solicitors
and registered foreign lawyers authorized and regulated by the Solicitors Regulation Authority (SRA No. 287488). Our professional rules can be found at www.sra.org.uk/solicitors/codeof-conduct.page. A list of partners and their professional qualifications is available for inspection at our UK offices. In Beijing, we are registered to operate as a Foreign Law Firm
Representative Office. This material is for general informational purposes only and does not represent our advice as to any particular set of facts; nor does it represent any undertaking to
keep recipients advised of all legal developments. Prior results do not guarantee a similar outcome. © 2014 Wilmer Cutler Pickering Hale and Dorr LLP

© 2014 Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale

Contenu connexe

Tendances

Data Protection in India
Data Protection in IndiaData Protection in India
Data Protection in IndiaHome
 
Introduction to US Privacy and Data Security Regulations and Requirements (Se...
Introduction to US Privacy and Data Security Regulations and Requirements (Se...Introduction to US Privacy and Data Security Regulations and Requirements (Se...
Introduction to US Privacy and Data Security Regulations and Requirements (Se...Financial Poise
 
CYBER LIABILITY COVEREAGE | HB EMERGING COMPLEX CLAIMS
CYBER LIABILITY COVEREAGE | HB EMERGING COMPLEX CLAIMSCYBER LIABILITY COVEREAGE | HB EMERGING COMPLEX CLAIMS
CYBER LIABILITY COVEREAGE | HB EMERGING COMPLEX CLAIMSHB Litigation Conferences
 
Frukostseminarium om molntjänster
Frukostseminarium om molntjänsterFrukostseminarium om molntjänster
Frukostseminarium om molntjänsterTranscendent Group
 
Consumer Privacy
Consumer PrivacyConsumer Privacy
Consumer PrivacyAshish Jain
 
Cyber risk challenge and the role of insurance
Cyber risk challenge and the role of insuranceCyber risk challenge and the role of insurance
Cyber risk challenge and the role of insuranceMunich Re
 
Cloud security law cyber insurance issues phx 2015 06 19 v1
Cloud security law cyber insurance issues phx 2015 06 19 v1Cloud security law cyber insurance issues phx 2015 06 19 v1
Cloud security law cyber insurance issues phx 2015 06 19 v1Michael C. Keeling, Esq.
 
"Data Breaches & the Upcoming Data Protection Legal Framework: What’s the Buz...
"Data Breaches & the Upcoming Data Protection Legal Framework: What’s the Buz..."Data Breaches & the Upcoming Data Protection Legal Framework: What’s the Buz...
"Data Breaches & the Upcoming Data Protection Legal Framework: What’s the Buz...Cédric Laurant
 
Relationship between data protection and m&a (1)
Relationship between data protection and m&a (1)Relationship between data protection and m&a (1)
Relationship between data protection and m&a (1)Ashish vishal
 
Research on Legal Protection of Data Rights of E Commerce Platform Operators
Research on Legal Protection of Data Rights of E Commerce Platform OperatorsResearch on Legal Protection of Data Rights of E Commerce Platform Operators
Research on Legal Protection of Data Rights of E Commerce Platform OperatorsYogeshIJTSRD
 
SOCIAL MEDIA RISKS | HB EMERGING COMPLEX CLAIMS
SOCIAL MEDIA RISKS | HB EMERGING COMPLEX CLAIMSSOCIAL MEDIA RISKS | HB EMERGING COMPLEX CLAIMS
SOCIAL MEDIA RISKS | HB EMERGING COMPLEX CLAIMSHB Litigation Conferences
 
Securing data in the cloud: A challenge for UK Law Firms
Securing data in the cloud: A challenge for UK Law FirmsSecuring data in the cloud: A challenge for UK Law Firms
Securing data in the cloud: A challenge for UK Law FirmsCloudMask inc.
 
India'a Proposed Privacy & Personal Data Protection Law
India'a Proposed Privacy & Personal Data Protection Law India'a Proposed Privacy & Personal Data Protection Law
India'a Proposed Privacy & Personal Data Protection Law Priyanka Aash
 
How to keep out of trouble with GDPR: The case of Facebook, Google and Experian
How to keep out of trouble with GDPR: The case of Facebook, Google and ExperianHow to keep out of trouble with GDPR: The case of Facebook, Google and Experian
How to keep out of trouble with GDPR: The case of Facebook, Google and ExperianPECB
 
Publish expo 2012 agility without damnation
Publish expo 2012 agility without damnationPublish expo 2012 agility without damnation
Publish expo 2012 agility without damnationAnne Caborn
 
LexisNexis Webinar: Mobile Privacy: An Overview of Legal and Legislative Deve...
LexisNexis Webinar: Mobile Privacy: An Overview of Legal and Legislative Deve...LexisNexis Webinar: Mobile Privacy: An Overview of Legal and Legislative Deve...
LexisNexis Webinar: Mobile Privacy: An Overview of Legal and Legislative Deve...VALLOYD
 
Bring Your Own Identity
Bring Your Own IdentityBring Your Own Identity
Bring Your Own IdentityNetIQ
 

Tendances (20)

Data Protection in India
Data Protection in IndiaData Protection in India
Data Protection in India
 
Introduction to US Privacy and Data Security Regulations and Requirements (Se...
Introduction to US Privacy and Data Security Regulations and Requirements (Se...Introduction to US Privacy and Data Security Regulations and Requirements (Se...
Introduction to US Privacy and Data Security Regulations and Requirements (Se...
 
Data Privacy
Data PrivacyData Privacy
Data Privacy
 
CYBER LIABILITY COVEREAGE | HB EMERGING COMPLEX CLAIMS
CYBER LIABILITY COVEREAGE | HB EMERGING COMPLEX CLAIMSCYBER LIABILITY COVEREAGE | HB EMERGING COMPLEX CLAIMS
CYBER LIABILITY COVEREAGE | HB EMERGING COMPLEX CLAIMS
 
Frukostseminarium om molntjänster
Frukostseminarium om molntjänsterFrukostseminarium om molntjänster
Frukostseminarium om molntjänster
 
Consumer Privacy
Consumer PrivacyConsumer Privacy
Consumer Privacy
 
Cyber risk challenge and the role of insurance
Cyber risk challenge and the role of insuranceCyber risk challenge and the role of insurance
Cyber risk challenge and the role of insurance
 
Cloud security law cyber insurance issues phx 2015 06 19 v1
Cloud security law cyber insurance issues phx 2015 06 19 v1Cloud security law cyber insurance issues phx 2015 06 19 v1
Cloud security law cyber insurance issues phx 2015 06 19 v1
 
"Data Breaches & the Upcoming Data Protection Legal Framework: What’s the Buz...
"Data Breaches & the Upcoming Data Protection Legal Framework: What’s the Buz..."Data Breaches & the Upcoming Data Protection Legal Framework: What’s the Buz...
"Data Breaches & the Upcoming Data Protection Legal Framework: What’s the Buz...
 
Relationship between data protection and m&a (1)
Relationship between data protection and m&a (1)Relationship between data protection and m&a (1)
Relationship between data protection and m&a (1)
 
Research on Legal Protection of Data Rights of E Commerce Platform Operators
Research on Legal Protection of Data Rights of E Commerce Platform OperatorsResearch on Legal Protection of Data Rights of E Commerce Platform Operators
Research on Legal Protection of Data Rights of E Commerce Platform Operators
 
SOCIAL MEDIA RISKS | HB EMERGING COMPLEX CLAIMS
SOCIAL MEDIA RISKS | HB EMERGING COMPLEX CLAIMSSOCIAL MEDIA RISKS | HB EMERGING COMPLEX CLAIMS
SOCIAL MEDIA RISKS | HB EMERGING COMPLEX CLAIMS
 
Securing data in the cloud: A challenge for UK Law Firms
Securing data in the cloud: A challenge for UK Law FirmsSecuring data in the cloud: A challenge for UK Law Firms
Securing data in the cloud: A challenge for UK Law Firms
 
India'a Proposed Privacy & Personal Data Protection Law
India'a Proposed Privacy & Personal Data Protection Law India'a Proposed Privacy & Personal Data Protection Law
India'a Proposed Privacy & Personal Data Protection Law
 
How to keep out of trouble with GDPR: The case of Facebook, Google and Experian
How to keep out of trouble with GDPR: The case of Facebook, Google and ExperianHow to keep out of trouble with GDPR: The case of Facebook, Google and Experian
How to keep out of trouble with GDPR: The case of Facebook, Google and Experian
 
Cloud primer
Cloud primerCloud primer
Cloud primer
 
GDPR - 5 Months On!
GDPR - 5 Months On!GDPR - 5 Months On!
GDPR - 5 Months On!
 
Publish expo 2012 agility without damnation
Publish expo 2012 agility without damnationPublish expo 2012 agility without damnation
Publish expo 2012 agility without damnation
 
LexisNexis Webinar: Mobile Privacy: An Overview of Legal and Legislative Deve...
LexisNexis Webinar: Mobile Privacy: An Overview of Legal and Legislative Deve...LexisNexis Webinar: Mobile Privacy: An Overview of Legal and Legislative Deve...
LexisNexis Webinar: Mobile Privacy: An Overview of Legal and Legislative Deve...
 
Bring Your Own Identity
Bring Your Own IdentityBring Your Own Identity
Bring Your Own Identity
 

En vedette

Harlem Biospace Seminar: Formation
Harlem Biospace Seminar: FormationHarlem Biospace Seminar: Formation
Harlem Biospace Seminar: FormationWilmerHale
 
Harlem Biospace Seminar: Protecting Your Assets
Harlem Biospace Seminar: Protecting Your AssetsHarlem Biospace Seminar: Protecting Your Assets
Harlem Biospace Seminar: Protecting Your AssetsWilmerHale
 
Terms and Trends in Venture Financings from across WilmerHale
Terms and Trends in Venture Financings from across WilmerHaleTerms and Trends in Venture Financings from across WilmerHale
Terms and Trends in Venture Financings from across WilmerHaleWilmerHale
 
Legal Issues for Startups
Legal Issues for StartupsLegal Issues for Startups
Legal Issues for StartupsWilmerHale
 
Protecing Your Assets
Protecing Your AssetsProtecing Your Assets
Protecing Your AssetsWilmerHale
 
Practical on Copyrights and Trademarks
Practical on Copyrights and TrademarksPractical on Copyrights and Trademarks
Practical on Copyrights and TrademarksWilmerHale
 
Georgetown Univ. Law Center Conference: Patent Law Developments in the Suprem...
Georgetown Univ. Law Center Conference: Patent Law Developments in the Suprem...Georgetown Univ. Law Center Conference: Patent Law Developments in the Suprem...
Georgetown Univ. Law Center Conference: Patent Law Developments in the Suprem...WilmerHale
 

En vedette (7)

Harlem Biospace Seminar: Formation
Harlem Biospace Seminar: FormationHarlem Biospace Seminar: Formation
Harlem Biospace Seminar: Formation
 
Harlem Biospace Seminar: Protecting Your Assets
Harlem Biospace Seminar: Protecting Your AssetsHarlem Biospace Seminar: Protecting Your Assets
Harlem Biospace Seminar: Protecting Your Assets
 
Terms and Trends in Venture Financings from across WilmerHale
Terms and Trends in Venture Financings from across WilmerHaleTerms and Trends in Venture Financings from across WilmerHale
Terms and Trends in Venture Financings from across WilmerHale
 
Legal Issues for Startups
Legal Issues for StartupsLegal Issues for Startups
Legal Issues for Startups
 
Protecing Your Assets
Protecing Your AssetsProtecing Your Assets
Protecing Your Assets
 
Practical on Copyrights and Trademarks
Practical on Copyrights and TrademarksPractical on Copyrights and Trademarks
Practical on Copyrights and Trademarks
 
Georgetown Univ. Law Center Conference: Patent Law Developments in the Suprem...
Georgetown Univ. Law Center Conference: Patent Law Developments in the Suprem...Georgetown Univ. Law Center Conference: Patent Law Developments in the Suprem...
Georgetown Univ. Law Center Conference: Patent Law Developments in the Suprem...
 

Similaire à Cybersecurity and Data Privacy Update

Sookman law society_6_min_business_law
Sookman law society_6_min_business_lawSookman law society_6_min_business_law
Sookman law society_6_min_business_lawbsookman
 
Contracting in the Cloud by Tammy Bortz
Contracting in the Cloud by Tammy BortzContracting in the Cloud by Tammy Bortz
Contracting in the Cloud by Tammy Bortzitnewsafrica
 
C:\Fakepath\Cloud Computing Mitigating Risk Fmb 0110
C:\Fakepath\Cloud Computing   Mitigating Risk   Fmb   0110C:\Fakepath\Cloud Computing   Mitigating Risk   Fmb   0110
C:\Fakepath\Cloud Computing Mitigating Risk Fmb 0110guestd7fc9c
 
Misa cloud computing workshop lhm final
Misa cloud computing workshop   lhm finalMisa cloud computing workshop   lhm final
Misa cloud computing workshop lhm finalLou Milrad
 
Legal Challenges in Contracting for Cloud Services
Legal Challenges in Contracting for Cloud ServicesLegal Challenges in Contracting for Cloud Services
Legal Challenges in Contracting for Cloud ServicesLou Milrad
 
Cutting To The Chase: Cloud From A Customers Perspective
Cutting To The Chase: Cloud From A Customers PerspectiveCutting To The Chase: Cloud From A Customers Perspective
Cutting To The Chase: Cloud From A Customers PerspectiveJanine Anthony Bowen, Esq.
 
2015-0318 GAC Presentation - BCR - 05052015
2015-0318 GAC Presentation - BCR - 050520152015-0318 GAC Presentation - BCR - 05052015
2015-0318 GAC Presentation - BCR - 05052015Jan Dhont
 
Carla Pinheiro Presentation / CloudViews.Org - Cloud Computing Conference 2009
Carla Pinheiro Presentation / CloudViews.Org - Cloud Computing Conference 2009 Carla Pinheiro Presentation / CloudViews.Org - Cloud Computing Conference 2009
Carla Pinheiro Presentation / CloudViews.Org - Cloud Computing Conference 2009 EuroCloud
 
GDPR and NIS Compliance - How HyTrust Can Help
GDPR and NIS Compliance - How HyTrust Can HelpGDPR and NIS Compliance - How HyTrust Can Help
GDPR and NIS Compliance - How HyTrust Can HelpJason Lackey
 
Procurement Of Software And Information Technology Services
Procurement Of Software And Information Technology ServicesProcurement Of Software And Information Technology Services
Procurement Of Software And Information Technology ServicesPeister
 
Improving Cybersecurity and Resilience Through Acquisition Emile Monette GSA
Improving Cybersecurity and Resilience Through Acquisition   Emile Monette GSAImproving Cybersecurity and Resilience Through Acquisition   Emile Monette GSA
Improving Cybersecurity and Resilience Through Acquisition Emile Monette GSAGovCloud Network
 
Cloud computing security issues and challenges
Cloud computing security issues and challengesCloud computing security issues and challenges
Cloud computing security issues and challengesKresimir Popovic
 
How Secure Is Cloud
How Secure Is CloudHow Secure Is Cloud
How Secure Is CloudWilliam Lam
 
Master Class Cyber Compliance IE Law School IE Busines School
Master Class Cyber Compliance IE Law School IE Busines SchoolMaster Class Cyber Compliance IE Law School IE Busines School
Master Class Cyber Compliance IE Law School IE Busines SchoolHernan Huwyler, MBA CPA
 
Michael Josephs
Michael JosephsMichael Josephs
Michael JosephsdaveGBE
 

Similaire à Cybersecurity and Data Privacy Update (20)

Sookman law society_6_min_business_law
Sookman law society_6_min_business_lawSookman law society_6_min_business_law
Sookman law society_6_min_business_law
 
Is There Sun Behind Those Clouds
Is There Sun Behind Those CloudsIs There Sun Behind Those Clouds
Is There Sun Behind Those Clouds
 
Judicial Frameworks and Privacy Issues of Cloud Computing
Judicial Frameworks and Privacy Issues of Cloud ComputingJudicial Frameworks and Privacy Issues of Cloud Computing
Judicial Frameworks and Privacy Issues of Cloud Computing
 
Contracting in the Cloud by Tammy Bortz
Contracting in the Cloud by Tammy BortzContracting in the Cloud by Tammy Bortz
Contracting in the Cloud by Tammy Bortz
 
C:\Fakepath\Cloud Computing Mitigating Risk Fmb 0110
C:\Fakepath\Cloud Computing   Mitigating Risk   Fmb   0110C:\Fakepath\Cloud Computing   Mitigating Risk   Fmb   0110
C:\Fakepath\Cloud Computing Mitigating Risk Fmb 0110
 
GSA's Presentation on Improving Cyber Security Through Acquisition
GSA's Presentation on Improving Cyber Security Through AcquisitionGSA's Presentation on Improving Cyber Security Through Acquisition
GSA's Presentation on Improving Cyber Security Through Acquisition
 
Misa cloud computing workshop lhm final
Misa cloud computing workshop   lhm finalMisa cloud computing workshop   lhm final
Misa cloud computing workshop lhm final
 
Legal Challenges in Contracting for Cloud Services
Legal Challenges in Contracting for Cloud ServicesLegal Challenges in Contracting for Cloud Services
Legal Challenges in Contracting for Cloud Services
 
Cutting To The Chase: Cloud From A Customers Perspective
Cutting To The Chase: Cloud From A Customers PerspectiveCutting To The Chase: Cloud From A Customers Perspective
Cutting To The Chase: Cloud From A Customers Perspective
 
2015-0318 GAC Presentation - BCR - 05052015
2015-0318 GAC Presentation - BCR - 050520152015-0318 GAC Presentation - BCR - 05052015
2015-0318 GAC Presentation - BCR - 05052015
 
Carla Pinheiro Presentation / CloudViews.Org - Cloud Computing Conference 2009
Carla Pinheiro Presentation / CloudViews.Org - Cloud Computing Conference 2009 Carla Pinheiro Presentation / CloudViews.Org - Cloud Computing Conference 2009
Carla Pinheiro Presentation / CloudViews.Org - Cloud Computing Conference 2009
 
GDPR and NIS Compliance - How HyTrust Can Help
GDPR and NIS Compliance - How HyTrust Can HelpGDPR and NIS Compliance - How HyTrust Can Help
GDPR and NIS Compliance - How HyTrust Can Help
 
Procurement Of Software And Information Technology Services
Procurement Of Software And Information Technology ServicesProcurement Of Software And Information Technology Services
Procurement Of Software And Information Technology Services
 
Improving Cybersecurity and Resilience Through Acquisition Emile Monette GSA
Improving Cybersecurity and Resilience Through Acquisition   Emile Monette GSAImproving Cybersecurity and Resilience Through Acquisition   Emile Monette GSA
Improving Cybersecurity and Resilience Through Acquisition Emile Monette GSA
 
Cloud computing security issues and challenges
Cloud computing security issues and challengesCloud computing security issues and challenges
Cloud computing security issues and challenges
 
How Secure Is Cloud
How Secure Is CloudHow Secure Is Cloud
How Secure Is Cloud
 
NIST article I wrote
NIST article I wroteNIST article I wrote
NIST article I wrote
 
Master Class Cyber Compliance IE Law School IE Busines School
Master Class Cyber Compliance IE Law School IE Busines SchoolMaster Class Cyber Compliance IE Law School IE Busines School
Master Class Cyber Compliance IE Law School IE Busines School
 
Michael Josephs
Michael JosephsMichael Josephs
Michael Josephs
 
Master Class Cyber Compliance
Master Class Cyber Compliance Master Class Cyber Compliance
Master Class Cyber Compliance
 

Plus de WilmerHale

Georgetown Univ. Law Center Conference: Strategies for Worldwide Patent Litig...
Georgetown Univ. Law Center Conference: Strategies for Worldwide Patent Litig...Georgetown Univ. Law Center Conference: Strategies for Worldwide Patent Litig...
Georgetown Univ. Law Center Conference: Strategies for Worldwide Patent Litig...WilmerHale
 
Georgetown Univ. Law Center Conference: Post-Grant Patent Proceedings: Are th...
Georgetown Univ. Law Center Conference: Post-Grant Patent Proceedings: Are th...Georgetown Univ. Law Center Conference: Post-Grant Patent Proceedings: Are th...
Georgetown Univ. Law Center Conference: Post-Grant Patent Proceedings: Are th...WilmerHale
 
Session V. Estoppel and Privity in US PTO Post-Grant Proceedings
Session V. Estoppel and Privity in US PTO Post-Grant ProceedingsSession V. Estoppel and Privity in US PTO Post-Grant Proceedings
Session V. Estoppel and Privity in US PTO Post-Grant ProceedingsWilmerHale
 
Harlem Biospace Seminar: Raising Money by Convertible Debt
Harlem Biospace Seminar: Raising Money by Convertible DebtHarlem Biospace Seminar: Raising Money by Convertible Debt
Harlem Biospace Seminar: Raising Money by Convertible DebtWilmerHale
 
The FTC’s Revised COPPA Rules (Stanford Presentation)
The FTC’s Revised COPPA Rules (Stanford Presentation)The FTC’s Revised COPPA Rules (Stanford Presentation)
The FTC’s Revised COPPA Rules (Stanford Presentation)WilmerHale
 
WeWork Labs Seminar: Raising Money by Convertible Debt
WeWork Labs Seminar: Raising Money by Convertible DebtWeWork Labs Seminar: Raising Money by Convertible Debt
WeWork Labs Seminar: Raising Money by Convertible DebtWilmerHale
 
Executive Compensation: Life Sciences & HealthCare 2013 CompStudy Insights
Executive Compensation: Life Sciences & HealthCare 2013 CompStudy InsightsExecutive Compensation: Life Sciences & HealthCare 2013 CompStudy Insights
Executive Compensation: Life Sciences & HealthCare 2013 CompStudy InsightsWilmerHale
 
Introduction to Venture Capital Financing
Introduction to Venture Capital FinancingIntroduction to Venture Capital Financing
Introduction to Venture Capital FinancingWilmerHale
 
Formation of a Company
Formation of a CompanyFormation of a Company
Formation of a CompanyWilmerHale
 
Trademarks - The Basics
Trademarks - The BasicsTrademarks - The Basics
Trademarks - The BasicsWilmerHale
 
Alternative Structures for Life Sciences Companies: The LLC Holding Company
Alternative Structures for Life Sciences Companies: The LLC Holding CompanyAlternative Structures for Life Sciences Companies: The LLC Holding Company
Alternative Structures for Life Sciences Companies: The LLC Holding CompanyWilmerHale
 
Planning for Exit Events
Planning for Exit EventsPlanning for Exit Events
Planning for Exit EventsWilmerHale
 
Starting Up Right and Getting Funded
Starting Up Right and Getting FundedStarting Up Right and Getting Funded
Starting Up Right and Getting FundedWilmerHale
 
Privacy and Data Security
Privacy and Data SecurityPrivacy and Data Security
Privacy and Data SecurityWilmerHale
 
Intellectual Property and Your Start-Up Company
Intellectual Property and Your Start-Up CompanyIntellectual Property and Your Start-Up Company
Intellectual Property and Your Start-Up CompanyWilmerHale
 
Positioning Your Start-Up For Success: Advice to Entrepreneurs Forming a Company
Positioning Your Start-Up For Success: Advice to Entrepreneurs Forming a CompanyPositioning Your Start-Up For Success: Advice to Entrepreneurs Forming a Company
Positioning Your Start-Up For Success: Advice to Entrepreneurs Forming a CompanyWilmerHale
 
Doing an Equity Round - Negotiating Price
Doing an Equity Round - Negotiating PriceDoing an Equity Round - Negotiating Price
Doing an Equity Round - Negotiating PriceWilmerHale
 
Option Pool Shuffle
Option Pool ShuffleOption Pool Shuffle
Option Pool ShuffleWilmerHale
 

Plus de WilmerHale (20)

Georgetown Univ. Law Center Conference: Strategies for Worldwide Patent Litig...
Georgetown Univ. Law Center Conference: Strategies for Worldwide Patent Litig...Georgetown Univ. Law Center Conference: Strategies for Worldwide Patent Litig...
Georgetown Univ. Law Center Conference: Strategies for Worldwide Patent Litig...
 
Georgetown Univ. Law Center Conference: Post-Grant Patent Proceedings: Are th...
Georgetown Univ. Law Center Conference: Post-Grant Patent Proceedings: Are th...Georgetown Univ. Law Center Conference: Post-Grant Patent Proceedings: Are th...
Georgetown Univ. Law Center Conference: Post-Grant Patent Proceedings: Are th...
 
Session V. Estoppel and Privity in US PTO Post-Grant Proceedings
Session V. Estoppel and Privity in US PTO Post-Grant ProceedingsSession V. Estoppel and Privity in US PTO Post-Grant Proceedings
Session V. Estoppel and Privity in US PTO Post-Grant Proceedings
 
Harlem Biospace Seminar: Raising Money by Convertible Debt
Harlem Biospace Seminar: Raising Money by Convertible DebtHarlem Biospace Seminar: Raising Money by Convertible Debt
Harlem Biospace Seminar: Raising Money by Convertible Debt
 
The FTC’s Revised COPPA Rules (Stanford Presentation)
The FTC’s Revised COPPA Rules (Stanford Presentation)The FTC’s Revised COPPA Rules (Stanford Presentation)
The FTC’s Revised COPPA Rules (Stanford Presentation)
 
WeWork Labs Seminar: Raising Money by Convertible Debt
WeWork Labs Seminar: Raising Money by Convertible DebtWeWork Labs Seminar: Raising Money by Convertible Debt
WeWork Labs Seminar: Raising Money by Convertible Debt
 
Executive Compensation: Life Sciences & HealthCare 2013 CompStudy Insights
Executive Compensation: Life Sciences & HealthCare 2013 CompStudy InsightsExecutive Compensation: Life Sciences & HealthCare 2013 CompStudy Insights
Executive Compensation: Life Sciences & HealthCare 2013 CompStudy Insights
 
Introduction to Venture Capital Financing
Introduction to Venture Capital FinancingIntroduction to Venture Capital Financing
Introduction to Venture Capital Financing
 
Term Sheets
Term SheetsTerm Sheets
Term Sheets
 
Formation of a Company
Formation of a CompanyFormation of a Company
Formation of a Company
 
Trademarks - The Basics
Trademarks - The BasicsTrademarks - The Basics
Trademarks - The Basics
 
Alternative Structures for Life Sciences Companies: The LLC Holding Company
Alternative Structures for Life Sciences Companies: The LLC Holding CompanyAlternative Structures for Life Sciences Companies: The LLC Holding Company
Alternative Structures for Life Sciences Companies: The LLC Holding Company
 
Planning for Exit Events
Planning for Exit EventsPlanning for Exit Events
Planning for Exit Events
 
Starting Up Right and Getting Funded
Starting Up Right and Getting FundedStarting Up Right and Getting Funded
Starting Up Right and Getting Funded
 
Privacy and Data Security
Privacy and Data SecurityPrivacy and Data Security
Privacy and Data Security
 
Intellectual Property and Your Start-Up Company
Intellectual Property and Your Start-Up CompanyIntellectual Property and Your Start-Up Company
Intellectual Property and Your Start-Up Company
 
IPO Readiness
IPO ReadinessIPO Readiness
IPO Readiness
 
Positioning Your Start-Up For Success: Advice to Entrepreneurs Forming a Company
Positioning Your Start-Up For Success: Advice to Entrepreneurs Forming a CompanyPositioning Your Start-Up For Success: Advice to Entrepreneurs Forming a Company
Positioning Your Start-Up For Success: Advice to Entrepreneurs Forming a Company
 
Doing an Equity Round - Negotiating Price
Doing an Equity Round - Negotiating PriceDoing an Equity Round - Negotiating Price
Doing an Equity Round - Negotiating Price
 
Option Pool Shuffle
Option Pool ShuffleOption Pool Shuffle
Option Pool Shuffle
 

Dernier

Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...
Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...
Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...ShrutiBose4
 
Pitch Deck Teardown: Geodesic.Life's $500k Pre-seed deck
Pitch Deck Teardown: Geodesic.Life's $500k Pre-seed deckPitch Deck Teardown: Geodesic.Life's $500k Pre-seed deck
Pitch Deck Teardown: Geodesic.Life's $500k Pre-seed deckHajeJanKamps
 
Independent Call Girls Andheri Nightlaila 9967584737
Independent Call Girls Andheri Nightlaila 9967584737Independent Call Girls Andheri Nightlaila 9967584737
Independent Call Girls Andheri Nightlaila 9967584737Riya Pathan
 
8447779800, Low rate Call girls in Shivaji Enclave Delhi NCR
8447779800, Low rate Call girls in Shivaji Enclave Delhi NCR8447779800, Low rate Call girls in Shivaji Enclave Delhi NCR
8447779800, Low rate Call girls in Shivaji Enclave Delhi NCRashishs7044
 
2024 Numerator Consumer Study of Cannabis Usage
2024 Numerator Consumer Study of Cannabis Usage2024 Numerator Consumer Study of Cannabis Usage
2024 Numerator Consumer Study of Cannabis UsageNeil Kimberley
 
Global Scenario On Sustainable and Resilient Coconut Industry by Dr. Jelfina...
Global Scenario On Sustainable  and Resilient Coconut Industry by Dr. Jelfina...Global Scenario On Sustainable  and Resilient Coconut Industry by Dr. Jelfina...
Global Scenario On Sustainable and Resilient Coconut Industry by Dr. Jelfina...ictsugar
 
Cybersecurity Awareness Training Presentation v2024.03
Cybersecurity Awareness Training Presentation v2024.03Cybersecurity Awareness Training Presentation v2024.03
Cybersecurity Awareness Training Presentation v2024.03DallasHaselhorst
 
Buy gmail accounts.pdf Buy Old Gmail Accounts
Buy gmail accounts.pdf Buy Old Gmail AccountsBuy gmail accounts.pdf Buy Old Gmail Accounts
Buy gmail accounts.pdf Buy Old Gmail AccountsBuy Verified Accounts
 
NewBase 19 April 2024 Energy News issue - 1717 by Khaled Al Awadi.pdf
NewBase  19 April  2024  Energy News issue - 1717 by Khaled Al Awadi.pdfNewBase  19 April  2024  Energy News issue - 1717 by Khaled Al Awadi.pdf
NewBase 19 April 2024 Energy News issue - 1717 by Khaled Al Awadi.pdfKhaled Al Awadi
 
8447779800, Low rate Call girls in New Ashok Nagar Delhi NCR
8447779800, Low rate Call girls in New Ashok Nagar Delhi NCR8447779800, Low rate Call girls in New Ashok Nagar Delhi NCR
8447779800, Low rate Call girls in New Ashok Nagar Delhi NCRashishs7044
 
Kenya Coconut Production Presentation by Dr. Lalith Perera
Kenya Coconut Production Presentation by Dr. Lalith PereraKenya Coconut Production Presentation by Dr. Lalith Perera
Kenya Coconut Production Presentation by Dr. Lalith Pereraictsugar
 
Call Us 📲8800102216📞 Call Girls In DLF City Gurgaon
Call Us 📲8800102216📞 Call Girls In DLF City GurgaonCall Us 📲8800102216📞 Call Girls In DLF City Gurgaon
Call Us 📲8800102216📞 Call Girls In DLF City Gurgaoncallgirls2057
 
International Business Environments and Operations 16th Global Edition test b...
International Business Environments and Operations 16th Global Edition test b...International Business Environments and Operations 16th Global Edition test b...
International Business Environments and Operations 16th Global Edition test b...ssuserf63bd7
 
MAHA Global and IPR: Do Actions Speak Louder Than Words?
MAHA Global and IPR: Do Actions Speak Louder Than Words?MAHA Global and IPR: Do Actions Speak Louder Than Words?
MAHA Global and IPR: Do Actions Speak Louder Than Words?Olivia Kresic
 
Traction part 2 - EOS Model JAX Bridges.
Traction part 2 - EOS Model JAX Bridges.Traction part 2 - EOS Model JAX Bridges.
Traction part 2 - EOS Model JAX Bridges.Anamaria Contreras
 
8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCR
8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCR8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCR
8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCRashishs7044
 
Annual General Meeting Presentation Slides
Annual General Meeting Presentation SlidesAnnual General Meeting Presentation Slides
Annual General Meeting Presentation SlidesKeppelCorporation
 
Marketplace and Quality Assurance Presentation - Vincent Chirchir
Marketplace and Quality Assurance Presentation - Vincent ChirchirMarketplace and Quality Assurance Presentation - Vincent Chirchir
Marketplace and Quality Assurance Presentation - Vincent Chirchirictsugar
 
Intro to BCG's Carbon Emissions Benchmark_vF.pdf
Intro to BCG's Carbon Emissions Benchmark_vF.pdfIntro to BCG's Carbon Emissions Benchmark_vF.pdf
Intro to BCG's Carbon Emissions Benchmark_vF.pdfpollardmorgan
 
Investment in The Coconut Industry by Nancy Cheruiyot
Investment in The Coconut Industry by Nancy CheruiyotInvestment in The Coconut Industry by Nancy Cheruiyot
Investment in The Coconut Industry by Nancy Cheruiyotictsugar
 

Dernier (20)

Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...
Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...
Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...
 
Pitch Deck Teardown: Geodesic.Life's $500k Pre-seed deck
Pitch Deck Teardown: Geodesic.Life's $500k Pre-seed deckPitch Deck Teardown: Geodesic.Life's $500k Pre-seed deck
Pitch Deck Teardown: Geodesic.Life's $500k Pre-seed deck
 
Independent Call Girls Andheri Nightlaila 9967584737
Independent Call Girls Andheri Nightlaila 9967584737Independent Call Girls Andheri Nightlaila 9967584737
Independent Call Girls Andheri Nightlaila 9967584737
 
8447779800, Low rate Call girls in Shivaji Enclave Delhi NCR
8447779800, Low rate Call girls in Shivaji Enclave Delhi NCR8447779800, Low rate Call girls in Shivaji Enclave Delhi NCR
8447779800, Low rate Call girls in Shivaji Enclave Delhi NCR
 
2024 Numerator Consumer Study of Cannabis Usage
2024 Numerator Consumer Study of Cannabis Usage2024 Numerator Consumer Study of Cannabis Usage
2024 Numerator Consumer Study of Cannabis Usage
 
Global Scenario On Sustainable and Resilient Coconut Industry by Dr. Jelfina...
Global Scenario On Sustainable  and Resilient Coconut Industry by Dr. Jelfina...Global Scenario On Sustainable  and Resilient Coconut Industry by Dr. Jelfina...
Global Scenario On Sustainable and Resilient Coconut Industry by Dr. Jelfina...
 
Cybersecurity Awareness Training Presentation v2024.03
Cybersecurity Awareness Training Presentation v2024.03Cybersecurity Awareness Training Presentation v2024.03
Cybersecurity Awareness Training Presentation v2024.03
 
Buy gmail accounts.pdf Buy Old Gmail Accounts
Buy gmail accounts.pdf Buy Old Gmail AccountsBuy gmail accounts.pdf Buy Old Gmail Accounts
Buy gmail accounts.pdf Buy Old Gmail Accounts
 
NewBase 19 April 2024 Energy News issue - 1717 by Khaled Al Awadi.pdf
NewBase  19 April  2024  Energy News issue - 1717 by Khaled Al Awadi.pdfNewBase  19 April  2024  Energy News issue - 1717 by Khaled Al Awadi.pdf
NewBase 19 April 2024 Energy News issue - 1717 by Khaled Al Awadi.pdf
 
8447779800, Low rate Call girls in New Ashok Nagar Delhi NCR
8447779800, Low rate Call girls in New Ashok Nagar Delhi NCR8447779800, Low rate Call girls in New Ashok Nagar Delhi NCR
8447779800, Low rate Call girls in New Ashok Nagar Delhi NCR
 
Kenya Coconut Production Presentation by Dr. Lalith Perera
Kenya Coconut Production Presentation by Dr. Lalith PereraKenya Coconut Production Presentation by Dr. Lalith Perera
Kenya Coconut Production Presentation by Dr. Lalith Perera
 
Call Us 📲8800102216📞 Call Girls In DLF City Gurgaon
Call Us 📲8800102216📞 Call Girls In DLF City GurgaonCall Us 📲8800102216📞 Call Girls In DLF City Gurgaon
Call Us 📲8800102216📞 Call Girls In DLF City Gurgaon
 
International Business Environments and Operations 16th Global Edition test b...
International Business Environments and Operations 16th Global Edition test b...International Business Environments and Operations 16th Global Edition test b...
International Business Environments and Operations 16th Global Edition test b...
 
MAHA Global and IPR: Do Actions Speak Louder Than Words?
MAHA Global and IPR: Do Actions Speak Louder Than Words?MAHA Global and IPR: Do Actions Speak Louder Than Words?
MAHA Global and IPR: Do Actions Speak Louder Than Words?
 
Traction part 2 - EOS Model JAX Bridges.
Traction part 2 - EOS Model JAX Bridges.Traction part 2 - EOS Model JAX Bridges.
Traction part 2 - EOS Model JAX Bridges.
 
8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCR
8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCR8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCR
8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCR
 
Annual General Meeting Presentation Slides
Annual General Meeting Presentation SlidesAnnual General Meeting Presentation Slides
Annual General Meeting Presentation Slides
 
Marketplace and Quality Assurance Presentation - Vincent Chirchir
Marketplace and Quality Assurance Presentation - Vincent ChirchirMarketplace and Quality Assurance Presentation - Vincent Chirchir
Marketplace and Quality Assurance Presentation - Vincent Chirchir
 
Intro to BCG's Carbon Emissions Benchmark_vF.pdf
Intro to BCG's Carbon Emissions Benchmark_vF.pdfIntro to BCG's Carbon Emissions Benchmark_vF.pdf
Intro to BCG's Carbon Emissions Benchmark_vF.pdf
 
Investment in The Coconut Industry by Nancy Cheruiyot
Investment in The Coconut Industry by Nancy CheruiyotInvestment in The Coconut Industry by Nancy Cheruiyot
Investment in The Coconut Industry by Nancy Cheruiyot
 

Cybersecurity and Data Privacy Update

  • 1. FinTech Webinar Series: CYBERSECURITY AND DATA PRIVACY UPDATE Jonathan Cedarbaum, Robert Finkel, and Heather Zachary October 23, 2013 Attorney Advertising
  • 2. Speakers Jonathan G. Cedarbaum Partner WilmerHale © 2014 Wilmer Cutler Pickering Hale and Dorr LLP Robert Finkel Partner WilmerHale Heather Zachary Partner WilmerHale WilmerHale 2
  • 3. Overview 1. Recent Federal Cybersecurity Developments: Executive Order, NIST Standards, Information-Sharing, Legislation 2. Privacy and Security Issues in Cloud Computing Contracts 3. International Privacy and Transferring Data Across Borders 4. Mobile Devices and Mobile Apps 5. Workplace and Corporate Governance Developments 6. The FTC’s New Rules Concerning Children’s Privacy © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 3
  • 4. Recent Federal Cybersecurity Developments © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 4
  • 5. Executive Order 13636 (Feb. 12, 2013)  Directs the National Institute of Standards and Technology (“NIST”), through a consultative process with other agencies and CI owners and operators, to develop cybersecurity performance standards and methods to reduce risks to CI (“Cybersecurity Framework”)  Directs DHS and agencies responsible for CI sectors to create a program to encourage CI owners and operators to voluntarily adopt the Cybersecurity Framework established by NIST  Directs agencies that have statutory authority to regulate CI to determine whether they have “clear authority” to establish mandatory standards based on the Cybersecurity Framework and, if current regulatory requirements are deemed insufficient, to impose such standards through rulemaking  Expands to all CI sectors the Enhanced Cybersecurity Services Program and requires key federal agencies to provide more cybersecurity threat information to CI owners  Instructs GSA and DoD to look into incorporating cybersecurity standards into federal acquisition and procurement policies  Requires an annual report to the President about the extent to which CI owners and operators are participating in the voluntary program. © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 5
  • 6. Preliminary NIST Cybersecurity Framework  Preliminary version released October 22, 2013: http://www.nist.gov/itl/upload/preliminary-cybersecurity-framework.pdf – 45-day comment period coming – Final version to be released in February 2014  Emphasizes risk-management approach to cybersecurity efforts  Divides Framework into three parts: Core, Profile, Implementation Tiers  Core: five functions – – – – – Identify Protect Detect Respond Recover  For each, categories, e.g., Asset Management, and subcategories, e.g., inventorying of software platforms and applications  Profile: establishing an organizational road map to get from here to there, i.e., substantially reduced cyber risks  Implementation Tiers: (i) partial; (ii) risk-informed; (iii) risk-informed and repeatable; (iv) adaptive © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 6
  • 7. Preliminary NIST Cybersecurity Framework  Six-step process for establishing or improving a cybersecurity program  Appendix B: Methodology to Protect Privacy and Civil Liberties for a Cybersecurity Progam – Quite detailed outline of best practices for handling PII – Legal basis, effects not always clear  Issues for further development: (i) authentication; (ii) automated indicator sharing; (iii)conformity assessment; (iv)data analytics; (v) international aspects, impacts, and alignment; (vi)privacy; and (vii)supply chains and interdependencies  Fifth public workshop, Nov. 14-15, N.C. State, Raleigh © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 7
  • 8. Voluntary Program Development  Incentives Reports by DHS, Commerce, Treasury:     Better information-sharing Liability protection, conditioned on adequate insurance coverage? Technical assistance and training Grants or, for regulated industries, rate recovery  Stakeholder meetings led by DHS:   September 23, October 21?, November 18? Efforts to clarify what is involved in implementation/adoption – – Guidance for sector-specific agencies Guidance for companies and trade associations or other private-sector collaborations © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 8
  • 9. Information-Sharing  Enhanced Cybersecurity Services (“ECS”) Program  From 2010 Defense Industrial Base (“DIB”) Pilot  New, All-Sector ECS:  Companies must apply to be approved by DHS or SSA as a “critical infrastructure entity”  Approved commercial service providers (“CSPs) receive threat information from DHS, which they can use to protect their customers  If customer agrees, CSP may also share anonymized threat information back with the Government  Other Efforts o Treasury Cyber Intelligence Group o E.O. directive that DOJ, ODNI, DHS issue instructions for timely production of unclassified reports on cyber threats to targets of the threats o FS-ISAC o Regional Exchanges  Liability concerns from monitoring and information-sharing:  Legislative responses? © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 9
  • 10. Privacy and Security Issues in Cloud Computing Contracts © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 10
  • 11. Privacy and Security Issues in Cloud Contracts  General Regulatory Guidance – Functions may be outsourced, accountability remains with management and Board  Recent FFIEC Heightened Interest – Cloud Computing Statement (July 10, 2012): Cloud as just another form of outsourcing, but more robust controls may be necessary given Cloud’s nature – Revisions to IT Exam Handbook; further revisions expected shortly from Cybersecurity and Critical Infrastructure Committee – Issuance of Administrative Guidelines on Implementation of Interagency Programs for the Supervision of Technology Service Providers (October 2012)  Possible Tensions Between Cloud Model and Regulatory Approach? – Guidance is technology agnostic: rules apply regardless of the form of outsourcing – Industry vendors often approach cloud services as non-customized, uniform service offerings, different in kind than traditional outsourcing models © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 11
  • 12. Privacy and Security Issues in Cloud Contracts  Financial Institution Must Conduct Proper Due Diligence – Sensitivity of Data and Protective Controls – Data Segregation , including controls on Integrity and Confidentiality of Data – Recoverability, including how vendor will respond to disasters  Information Security – Continuous Monitoring if high-risk situation – Cloud Services increase need for encryption and access controls – Incident Response Methodologies – Strategies for investigation and forensic collection. © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 12
  • 13. Privacy and Security Issues in Cloud Contracts  Robust Termination Rights – Removal or Deletion of Data at the end of the Contract, regardless of location; Risk may be higher than in traditional outsourcing – Right to assign contract to acquirer or in a workout situation  Other Key Contract Terms – Prompt Reporting and Remediation of Security Breaches – Liability caps and disclaimers of certain types of liability – Vendor monitoring of legislative and regulatory changes – Costs associated with complying with changes in the law © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 13
  • 14. Contracting Considerations for EU Data  Though the EU Data Protection Authorities have differing views, increasingly they have been adopting the position of the Article 29 Working Party. – Opinion 05/2012 on Cloud Computing, WP 196, 01037/12/EN (July 1, 2012).  The Opinion mandates transparency in cloud computing contracts. Specifically, it states that the cloud provider should disclose to clients: – all locations where data will be stored; and – the identities of the cloud provider’s subcontractors.  The Opinion requires the client to control its data. The contract should: – bar the cloud provider from processing data for its own purposes; – give the client power to approve all subcontractors or terminate the contract; – enable the client to seek a remedy for subcontractors’ privacy violations; and – require the cloud provider to notify the client of any requests by government entities for data, unless such notification is prohibited by law. © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 14
  • 15. Contracting Considerations for EU Data  If the cloud provider will transfer data from the EU to elsewhere, the parties must ensure that some mechanism is in place to legitimize the initial transfer and all onward transfers of the data. – Examples include the Safe Harbor (controversial), or “model” contractual clauses.  The contract should require the cloud provider to implement adequate technical and organizational measures to protect any personal data. – This is required under Article 17 of the Data Protection Directive as well.  There should be adequate safeguards to ensure that the cloud provider does not retain any data that the cloud client decides to delete.  The cloud provider must cooperate with the client to ensure that individuals’ access, correction, and deletion rights are protected.  Some EU financial regulators insist on even greater contractual safeguards, such as audit rights for the client or an examination right for the regulator. © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 15
  • 16. National Financial Regulators  Increased interest by financial regulatory authorities in many countries  Statements on Cloud use: Netherlands, Belgium, Canada, France  Statements/guidance in the works?: France, Luxembourg, Japan, China, South Korea  Some trends:  Some jurisdictions, like the U.S., approach as risk-management issue to be incorporated in larger risk-management, outsourcing guidance  But even among some of those, as in U.S., heightened concern, possibility of regulatory expectations inconsistent with particular data handling practices  Recent regulatory steps to investigate: – – – – Regulatory approval or notification, at least for important operational functions Audit rights, by regulator or financial institution Specified contract clauses, e.g., re information access, Customer consent  Some jurisdictions more hostile, esp. concerned about data containing customer personal financial information being held outside national boundaries: South Korea, Singapore?, Luxembourg?, Switzerland?  Crucial to investigate particular regulatory requirements country by country © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 16
  • 17. International Privacy and Transferring Data Across Borders © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 17
  • 18. Post-Snowden Controversies Concerning the Adequacy of Mechanisms for Protecting EU Data in the United States  The U.S.-EU Safe Harbor regime has always been controversial with the more conservative Data Protection Authorities in the EU, and criticism of it has reached new heights recently. – Several negative reports and guidance documents from DPAs and the European Parliament. – Proposals to sunset the Safe Harbor immediately or as part of the Data Protection Regulation.  Though no formal changes have been made, conservative DPAs have made some headway against the Safe Harbor in the context of service provider relationships. This already is having a direct impact on FinTech companies that partner with companies in the EU. – DPAs and others argue that the Safe Harbor cannot legitimize transfers from a “controller” in the EU to a “processor” in the United States (and especially “onward transfers” from the processor).  The U.S. Department of Commerce has vigorously resisted such attacks on the Safe Harbor. – One helpful document is Dep’t Commerce, “Clarifications Regarding the U.S.-EU Safe Harbor Framework and Cloud Computing.” (Apr. 2013). Though it focuses on cloud computing, it has clear application to any controller-processor arrangement that a FinTech company might enter into.  Many FinTech companies are also facing misconceptions about the PATRIOT Act. Dispelling these (where possible) has been very important to these companies’ bottom lines. © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 18
  • 19. New Guidance on the EU “Cookie Directive”  Considerable divergence remains in countries’ interpretations. Some permit an optout approach, while others mandate an opt-in approach for certain types of cookies.  A paper from the Article 29 Working Party puts more pressure on companies to use robust forms of consent. It says consent mechanisms should have four elements: – Working Document 02/2013 providing guidance on obtaining consent for cookies, WP 208, 1676/13/EN (Oct. 2, 2013) – “Specific information” — Users must receive “clear, comprehensive, and visible notice” about the cookies used and their purposes (including any third-party cookies or access to cookie data). – “Timing” — Consent should be obtained before cookies “are set or read,” unless an exception to consent applies. – “Active behavior” — Consent must be unambiguous, shown through “an active indication of the user’s wishes.” For example, clicking on a button or link, ticking a box, or “any other active behavior from which a website operator can unambiguously conclude” the user has consented. – “Real choice” — Consent can be valid only if the user has real choice. An operator should not condition general access to sites on the acceptance of all cookies (e.g., e-commerce site). Users should be given meaningful choice concerning cookies that are not needed for site functioning. © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 19
  • 20. Status of the New Data Protection “Regulation”  The already strict data protection laws in the EU are likely to become even stricter under the Data Protection Regulation being negotiated.  Procedural status of the Regulation: – The regulation has been subject to thousands of amendments over the last few months. Those amendments were voted on just this Monday by the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs. – The draft will weave its way through the EU apparatus, potentially going to a Conciliation Committee if agreement cannot be reached. Ultimately, the Council of the European Union, European Parliament, and European Commission must collaborate on a draft, which will be adopted and signed into law. – The Parliament is pushing to get an agreement before the May 2014 elections. If they don’t meet that deadline, there will be significant delays, and the adoption of any new Regulation could be in jeopardy. – Even after the Regulation is enacted, it will not be effective for another two years. © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 20
  • 21. Status of the New Data Protection “Regulation”  The substance of the Regulation remains much in flux. However, the following provisions (and many more) are included at this time: – Hefty fines. A company could face significant fines from EU regulators. Under the current draft, fines for some violations could amount to 100 million euros or five percent of a company’s annual worldwide turnover, whichever is greater. – “Anti-FISA” provision. This element of the Regulation was added recently. It had been included in an earlier draft of the Regulation, but was removed after heavy lobbying by the United States. After the Snowden revelations, it was reinserted. This provision could put U.S. companies in the position of choosing to violate either U.S. law or EU law. – “Right to erasure.” This was originally the “right to be forgotten.” Though still under debate, it would require erasure of data on request and communication of such requests to third parties. – “One-stop-shop” principle. This would allow organizations in the EU to report to just one data protection authority (their home authority) rather than one (or more) in each EU member state. That home DPA could issue decisions that are binding throughout the EU. There is currently debate as to how much influence other DPAs should have with respect to such decisions, and whether decisions should be reviewable by an independent panel. © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 21
  • 22. Mobile Devices and Mobile Apps © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 22
  • 23. Updates to the California Online Privacy Protection Act There have been important developments concerning the California Online Privacy Protection Act, which applies to mobile apps.  The statute requires providers of websites and online services to disclose a privacy policy to consumers. See Cal. Bus. & Prof. Code §§ 22575 et seq.  The California AG’s CalOPPA litigation against Delta Airlines was dismissed for non-privacy reasons. Such litigation could be brought against a new target.  The legislature amended CalOPPA to require disclosure of more information: – “whether other parties may collect personally identifiable information about an individual consumer’s online activities over time and across different Web sites when a consumer uses the operator’s Web site or service.” California A.B. 370 (Sept. 27, 2013). – “how the operator responds to Web browser ‘do not track’ signals or other mechanisms that provide consumers the ability to exercise choice regarding the collection of personally identifiable information about an individual consumer’s online activities over time and across third-party Web sites or online services, if the operator engages in that collection.” © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 23
  • 24. NTIA Multi-Stakeholder Process  After a year of meetings among industry, consumer advocates, and government representatives, the NTIA multi-stakeholder negotiations on mobile app transparency yielded a self-regulatory code of conduct.  The outcome is controversial. Some industry groups (including the Direct Marketing Association) and some consumer groups are unhappy with the result.  The code is voluntary, but for those app developers that do adopt it, it requires short-form notices that supplement more traditional, longer-form privacy policies. The notices must (subject to limited exceptions): – disclose the identity of the entity providing the app; – explain whether the following data are collected: biometrics; contacts; financial, health, medical, or therapy info; browser history; call or text logs; location; or user files on the device; – disclose whether data are shared with ad networks, mobile carriers, data resellers, data analytics providers, government entities, operating systems/platforms, other apps, or social networks; – describe a means of accessing a long form privacy policy, if any exists; and – where practicable, be provided prior to download or purchase of the app.  Even though the code is voluntary, it could influence mandatory regimes. © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 24
  • 25. Mobile Apps and Payments  A number of issues arise in the mobile payments context due to the intersection of the heavily regulated financial industry with the anything-goes mobile app culture.  One key issue for mobile payments providers is the appropriate policies: – Gramm-Leach-Bliley privacy statement – Online privacy policy – Short-form mobile app policy – Other consumer notices required by financial statutes and regulations  Another issue is E-SIGN Act compliance. Required notices can be provided electronically so long as specific procedures are followed.  Though similar in substance, the legal basis for security requirements varies depending on the type of entity involved, as does the specificity of the guidance. – Interagency Guidelines issued by the federal functional regulators – FTC Safeguards Rule – Federal Trade Commission Act – State data security laws (e.g., Massachusetts) © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 25
  • 26. Mobile Security  Explosion of reliance on mobile devices  25% of e-commerce Q1 of 2013 as compared to 2% just two years earlier  Smartphone use average of 150 times/day  Rise of B.Y.O.D.: Personally owned smart phones, tablets, other mobile devices used in enterprises now outnumber company-issued counterparts two to one?  Some top threats:      Lost, stolen, decommissioned devices; Symantec Honey Stick Project Information-stealing malware; especially Android apps Data loss/leakage through poorly designed apps Vulnerabilities within devices, including insufficient management tools Unsecured WiFi, network access, rogue access points  Increased FTC Scrutiny  Mobile Security Forum, June 2013  More enforcement activity: e.g., HTC America settlement, Feb. 2013  Mobile App Developers: Start with Security (Feb. 2013) © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 26
  • 27. Workplace and Corporate Governance Developments © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 27
  • 28. FFIEC Social Media Guidance  Draft guidance issued January 2013 (78 Fed. Reg. 4848 (Jan. 23, 2013))  FIs “should have a risk management program that allows [them] to identify, measure, monitor and control the risks related to social media.”  Legal risks: application of many laws and regulations to social media use – – – – – – Truth in SavingsAct/Regulation DD and Part 707, Truth in Lending Act/Regulation Z Equal Credit Opportunity Act, Fair Housing Act Fair Debt Collection Practices Act UDAP prohibition in Section 5 of the FTC Act, UDAAP prohibition in CFPB Act Electronic Fund Transfer Act, Bank Secrecy Act, Community Reinvestment Act Gramm-Leach-Bliley Act, the CAN-SPAM Act, TCPA, COPPA – – – – on-line fraud and its possible effect on brand identity reliance on third-party service providers and the need for adequate monitoring transparency and privacy obligations in dealing with customers and clients employee use of social media  Reputational risks  Operational risks: cf. FFIEC IT Exam Handbook  Roughly 80 comments received – Overregulation, lack of flexibility in face of rapid technological evolution – Difficulties, costs of monitoring, influence third-party activity – Uncertain applicability, costs of possible disclosure obligations © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 28
  • 29. Corporate Governance  SEC     October 2011 Guidance Continued issuance of inquiry letters Rockefeller letters to Fortune 500, September 2012 Exchange between Chair White and Senator Rockefeller, April/May 2013  Management Oversight     Board responsibility CISO? Audits and active planning Don’t wait for a major breach © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 29
  • 30. Insurance  Market continues to grow – commercial premiums over $1 billion/year – but still probably only 1/3 or so of U.S. public companies have cyber coverage  Fights in the courts over whether various kinds of cyber-related losses are covered under more traditional policies are proliferating – Hartford Casualty Insurance Co. v. Corcino & Assocs., (C.D. Cal. Oct. 7, 2013): exclusion for violations of statutory rights does not shield insurer for coverage of data breach involving medical information – Retail Ventures, Inc. v. National Union Fire Insurance Co., 691 F.3d 821 (6th Cir. 2012): remediation costs in first-party losses under computer fraud rider; exclusion for “proprietary information” not triggered  In selecting cybersecurity insurance, need to understand possible types of loss: not just first-party versus third-party, but elements • • • • • • • • • • • Replacement or restoration of data Damage to physical property, such as computers Business interruption losses Costs of compliance with consumer notification laws Costs of internal investigation and response Remediation costs, such as credit monitoring for affected individuals Response to government investigations Regulatory penalties and fines Judgments, settlements, and defense costs Public relations expenses Cyber-extortion © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 30
  • 31. Big Data  Definitions  Volume, Velocity, Variety  Some sources: – Social media – Behavioral tracking – Machine-generated  Growing market for enterprise technologies  IDC: $3.2 to $16.9 billion from 2010 to 2015  Emerging Issues     Indiscriminate collection/over collection; genuine consent De-identification Retention, destruction Catastrophic breaches: water in a glass vs. water behind a dam  Increased Regulatory Interest  FTC: Recent Brill, Vladeck speeches  Congressional data broker investigations © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 31
  • 32. The FTC’s New Rules Concerning Children’s Privacy © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 32
  • 33. Overview of the Children’s Online Privacy Protection Act  In its simplest application, COPPA requires that operators of commercial websites and online services that are “directed to children” must provide notice and obtain parental consent before collecting or enabling disclosure of “personal information” from a child online. – “Online service” is defined broadly. The law applies not just to websites, but also mobile apps, Internet-enabled gaming platforms, internet-enabled location-based services, etc. – There is a multi-factor test for whether a site or service is “directed to children.” • A portion of a general-audience website can be directed to children (e.g., a “kids korner”). • Even a general-audience service must comply with COPPA when it has “actual knowledge” that it has collected personal information from a child or from users of a “child directed” site or service. – The law requires two types of notice in most circumstances: • A COPPA-compliant online privacy policy that discloses certain info specified in the rules; and • A notice delivered directly to the child’s parent before collecting any information about the child. © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 33
  • 34. Overview of the Children’s Online Privacy Protection Act  In its simplest application, COPPA requires that operators of commercial websites and online services that are “directed to children” must provide notice and obtain parental consent before collecting or enabling disclosure of “personal information” from a child online. – In many circumstances, a site or service must get consent from the parent prior to collecting (or disclosing) information from a child. There are a number of exceptions to this requirement. – The law governs not just collection of information from children, but also any features that make it possible for children to disclose information about themselves (e.g., chat rooms, comment fields). – “Personal information” is defined extraordinarily broadly, and includes things that are not considered personally identifiable information in other contexts, such as IP addresses and cookies. – A “child” under COPPA is one under the age of 13. © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 34
  • 35. The FTC’s New COPPA Rules  The Federal Trade Commission issued new rules interpreting COPPA that went into effect on July 1st.  The new rules expand the definition of “personal information”: – Prior to the amendments, “personal information” included: full name, physical address, online contact information, telephone number, social security number, and other information combined with personal information. – The FTC added four types of information to the definition: • Geolocation information sufficient to identify the street name and the name of the city/town; the FTC clarified that this information is covered by the existing rule • Photos, videos, or audio files that contain a child’s image or voice • Screen or user names that function like “online contact information” • “Persistent identifiers” that can be used to recognize a user over time and across different sites or services (e.g., cookies, device IDs, IP addresses). [But note: When an operator collects a persistent identifier and no other personal information, there is no notice or consent requirement when the identifier “is used for the sole purpose of providing support for the internal operations of the Web site or online service.”] © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 35
  • 36. Third-Party Liability and the “Actual Knowledge” Standard  A general-audience website or service must comply with COPPA when the operator has “actual knowledge” that it has collected personal information from a child (e.g., through a customer service interaction or a post on a monitored message board).  A third-party plug-in, ad network, or other service that collects personal information through another site or service must comply with COPPA if it has “actual knowledge” that it is integrated into a child-directed site or service.  Although a strict-liability standard applies for “child-directed sites,” it does not apply to general-audience services and plug-ins. Instead, a third party has actual knowledge when: – The child-directed website or service directly communicates the nature of its content to the third-party provider; or – A representative of the third party recognizes the child-directed nature of the site. © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 36
  • 37. Additional Features of the FTC’s New Rules  The new rules impose strict liability for child-directed websites and services. This element is controversial and garnered a dissent from Commissioner Ohlhausen.  The new rules contain guidance and restrictions for third-party social media plug-ins (like Facebook share), ad networks, and analytics providers (like Google Analytics).  Under the old rules, all child-directed sites were required to assume that all users were under 13 and provide appropriate COPPA protections. The new rules allow a subset of child-directed sites to age-screen users.  The new rules permit the use of additional mechanisms for obtaining parental consent, such as video conferencing.  The FTC altered (and in some ways streamlined) the privacy policy and parental notice requirements.  The new rules strengthen existing security protections and add new obligations concerning data retention and deletion. © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale 37
  • 38. Thank You and Contact Information Jonathan Cedarbaum +1 202 663 6315 Jonathan.Cedarbaum@wilmerhale.com Robert Finkel +1 212 295 6555 Robert.Finkel@wilmerhale.com Heather Zachary +1 202 663 6794 Heather.Zachary@wilmerhale.com Wilmer Cutler Pickering Hale and Dorr LLP is a Delaware limited liability partnership. WilmerHale principal law offices: 60 State Street, Boston, Massachusetts 02109, +1 617 526 6000; 1875 Pennsylvania Avenue, NW, Washington, DC 20006, +1 202 663 6000. Our United Kingdom offices are operated under a separate Delaware limited liability partnership of solicitors and registered foreign lawyers authorized and regulated by the Solicitors Regulation Authority (SRA No. 287488). Our professional rules can be found at www.sra.org.uk/solicitors/codeof-conduct.page. A list of partners and their professional qualifications is available for inspection at our UK offices. In Beijing, we are registered to operate as a Foreign Law Firm Representative Office. This material is for general informational purposes only and does not represent our advice as to any particular set of facts; nor does it represent any undertaking to keep recipients advised of all legal developments. Prior results do not guarantee a similar outcome. © 2014 Wilmer Cutler Pickering Hale and Dorr LLP © 2014 Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale