Privacy

Subscribe to Privacy via RSS

While Washington’s comprehensive data privacy bill (SB 6182) — inspired by California’s CCPA — died when legislators could not hammer out a compromise over enforcement mechanisms, the state legislature did reach agreement and Gov. Jay Inslee signed into law a facial recognition bill (SB 6280) that provides some important privacy and antidiscrimination provisions regarding state and local governmental use of the technology.

An interesting New York Times article last week posited that governments’ use of digital surveillance techniques for the COVID-19 response – such as the tracking of geolocation to gauge quarantine restrictions – would lead to more pervasive digital tracking in the future. On a related note, there have been reports of an increased use of facial recognition technologies as governments use digital tools to respond to the outbreak.

These developments bring to mind some interesting questions:

In the future, given our collective experience with this invisible foe, will there be a move away from contact-based security and access control systems to “germless” and “touchless” processes?

If so, what role will be played by facial recognition and other biometrics-based systems in that shift?

In continuing its push to enforce its terms and policies against developers that engage in unauthorized collection or scraping of user data, Facebook brought suit last month against mobile marketing and data analytics firm OneAudience LLC. (Facebook, Inc. v. OneAudience LLC, No. 20-01461 (N.D. Cal. Complaint filed Feb. 27, 2020)). Facebook alleges that OneAudience harvested Facebook users’ profile data and device data in contravention of Facebook’s terms and developer policies. OneAudience purportedly gathered this data by paying app developers to bundle OneAudience’s software development kit (SDK) into their apps and then harvesting data for those users that logged into those apps via Facebook credentials.

Last week, Democratic Senators Ron Wyden and Sherrod Brown and Congresswoman Anna Eshoo sent a letter to FTC Chairman Joseph J. Simons urging the agency to investigate whether analytics firm Envestnet, Inc. (which operates Yodlee) was violating the FTC Act.

According to the letter, Yodlee is the largest consumer financial data aggregator in the United States.  It aggregates financial information from banks, credit card companies and other financial services providers with consumer consent, and maintains a database of credit and debit card transactions of tens of millions of consumers. The letter asserts that Yodlee is used by over 1,200 companies to offer online personal finance tools to consumers.  Yodlee offers its software and platform to fintech providers, banks, financial apps, consumers and others to help process financial data from various sources.

The crux of the letter claims that Envestnet sells access to such consumer data without meaningful notice to consumers of such sale.  The members of Congress reject Envestment’s position that consumer privacy is protected because the data it sells is anonymized, and claim that Envestnet does not inform consumers that their personal financial data is being sold, but rather relies on its partners to make such disclosures in privacy policies or terms of service. The letter asserts that this is not sufficient, as Envestnet does not appear to take any steps to ensure that its partners give such notice, and even if they did, such practices place the burden on consumers to find such a notice “buried in small print” and then search for a way to opt out of such data sharing.

It is that time of year when we look back to see what tech-law issues took up most of our time this year and look ahead to see what the emerging issues are for 2020.

Data: The Issues of the Year

Data presented a wide variety of challenging legal issues in 2019. Data is solidly entrenched as a key asset in our economy, and as a result, the issues around it demanded a significant level of attention.

  • Clearly, privacy and data security-related data issues were dominant in 2019. The GDPR, CCPA and other privacy regulations garnered much consideration and resources, and with GDPR enforcement ongoing and CCPA enforcement right around the corner, the coming year will be an important one to watch. As data generation and collection technologies continued to evolve, privacy issues evolved as well.  In 2019, we saw many novel issues involving mobile, biometric and connected cars. Facial recognition technology generated a fair amount of litigation, and presented concerns regarding the possibility of intrusive governmental surveillance (prompting some municipalities, such as San Francisco, to ban its use by government agencies).
  • Because data has proven to be so valuable, innovators continue to develop new and sometimes controversial technological approaches to collecting data. The legal issues abound.  For example, in the past year, we have been advising on the implications of an ongoing dispute between the City Attorney of Los Angeles and an app operator over geolocation data collection, as well as a settlement between the FTC and a personal email management service over access to “e-receipt” data.  We have entertained multiple questions from clients about the unsettled legal terrain surrounding web scraping and have been closely following developments in this area, including the blockbuster hiQ Ninth Circuit ruling from earlier this year. As usual, the pace of technological innovation has outpaced the ability for the law to keep up.
  • Data security is now regularly a boardroom and courtroom issue, with data breaches, phishing, ransomware attacks and identity theft (and cyberinsurance) the norm. Meanwhile, consumers are experiencing deeper and deeper “breach fatigue” with every breach notice they receive. While the U.S. government has not yet been able to put into place general national data security legislation, states and certain regulators are acting to compel data collectors to take reasonable measures to protect consumer information (e.g., New York’s newly-enacted SHIELD Act) and IoT device manufacturers to equip connected devices with certain security features appropriate to the nature and function of the devices secure (e.g., California’s IoT security law, which becomes effective January 1, 2020). Class actions over data breaches and security lapses are filed regularly, with mixed results.
  • Many organizations have focused on the opportunistic issues associated with new and emerging sources of data. They seek to use “big data” – either sourced externally or generated internally – to advance their operations.  They are focused on understanding the sources of the data and their lawful rights to use such data.  They are examining new revenue opportunities offered by the data, including the expansion of existing lines, the identification of customer trends or the creation of new businesses (including licensing anonymized data to others).
  • Moreover, data was a key asset in many corporate transactions in 2019. Across the board in M&A, private equity, capital markets, finance and some real estate transactions, data was the subject of key deal points, sometimes intensive diligence, and often difficult negotiations. Consumer data has even become a national security issue, as the Committee on Foreign Investment in the United States (CFIUS), expanded under a 2018 law, began to scrutinize more and more technology deals involving foreign investment, including those involving sensitive personal data.
  • For more information about developments over the past year on data-related issues, and to keep abreast on new developments in the future, you may want to subscribe to Proskauer’s privacy blog, privacylaw.proskauer.com. You may also want to review our Practical Law article “Trends in Privacy and Data Security:2018” and get a hold of our update that will publish in winter 2020.

I am not going out on a limb in saying that 2020 and beyond promise many interesting developments in “big data,” privacy and data security.

The Georgia Supreme Court ruled that the retrieval of electronic automobile data from an electronic data recording device (e.g., airbag control modules) without a warrant at the scene of a fatal collision was a search and seizure that implicates the Fourth Amendment, regardless of any reasonable expectations of privacy. (…

This week, the FTC entered into a proposed settlement with Unrollme Inc. (“Unrollme”), a free personal email management service that offers to assist consumers in managing the flood of subscription emails in their inboxes. The FTC alleged that Unrollme made certain deceptive statements to consumers, who may have had privacy concerns, to persuade them to grant the company access to their email accounts. (In re Unrolllme Inc., File No 172 3139 (FTC proposed settlement announced Aug. 8, 2019).

This settlement touches many relevant issues, including the delicate nature of online providers’ privacy practices relating to consumer data collection, the importance for consumers to comprehend the extent of data collection when signing up for and consenting to a new online service or app, and the need for downstream recipients of anonymized market data to understand how such data is collected and processed.  (See also our prior post covering an enforcement action involving user geolocation data collected from a mobile weather app).

In an important opinion, the Ninth Circuit affirmed a lower court’s ruling that plaintiffs in the ongoing Facebook biometric privacy class action have alleged a concrete injury-in-fact to confer Article III standing and that the class was properly certified. (Patel v. Facebook, Inc., No. 18-15982 (9th Cir. Aug. 8, 2019)). Given the California district court’s prior rulings which denied Facebook’s numerous motions to dismiss on procedural and substantive grounds, and the Illinois Supreme Court’s January 2019 blockbuster ruling in Rosenbach, which held that a person “aggrieved” by a violation of the Illinois Biometric Information Privacy Act (“BIPA”) need not allege some actual injury or harm beyond a procedural violation to have standing to bring an action under the statute, the Ninth Circuit’s decision was not entirely surprising. Still, the ruling is significant as a federal appeals court has ruled on important procedural issues in a BIPA action and found standing. The case will be sent back to the lower court with the prospect of a trial looming, and given BIPA’s statutory damage provisions, Facebook may be looking at a potential staggering damage award or substantial settlement.     

Today, the Georgia Supreme Court is set to hear oral argument in an appeal brought by a defendant convicted of vehicular homicide and other charges related to a fatal car crash. (Mobley v. State, No. S18C1546).  The defendant is appealing the lower court’s order that denied his motion to suppress evidence that was downloaded and obtained from the car’s airbag control module by the police without a search warrant at the scene of the accident (note: a search warrant was obtained for the physical device the next day). Thus, the principal issue in the appeal is whether a search warrant was required to retrieve the data from the vehicle’s airbag control module.