Introduction

Throughout 2022, cybersecurity lawyers have kept their eyes firmly fixed on two pieces of EU cybersecurity legislation: the NIS2 Directive (“NIS2”) and the Cyber Resilience Act (the “CRA”). With NIS2 having been formally enacted by the EU and the draft text of the CRA being published by the European Commission in September 2022, businesses should take time in 2023 to digest the implications of NIS2 and the CRA on their cybersecurity compliance programmes, both in terms of organisational measures and product compliance.

Continue Reading 2023 – A Year for Reflection on EU Cybersecurity

Ropes & Gray data, privacy & cybersecurity practice co-lead Ed McNicholas was recently featured on the R&G Tech Studio podcast, a Ropes & Gray podcast focused on showcasing the interesting and exciting work our attorneys are doing in the world of tech. In the interview, McNicholas sits down with Ed Black, technology, media &

2023 will bring with it updates and reforms in relation to data protection and cybersecurity in the UK. The proposed changes are expected to place tighter restrictions on digital content; increase protection around the internet of things and connected products; and, to the delight of some, lighten compliance burdens with respect to personal data. A few highlights to watch out for are set out below:

Continue Reading Incoming Privacy and Cybersecurity Developments in the UK

On November 9, 2022, the New York Department of Financial Services (“NYDFS”) announced proposed amendments to its Part 500 Cybersecurity Rules (“Proposed Amendments”), revising an initial set of draft amendments released in July 2022. While NYDFS may have relatively limited jurisdiction, its emphasis on rapid breach reporting and data governance have had considerable influence on other U.S. financial services regulators. The current Cybersecurity Rules impose a 72-hour reporting requirement for cybersecurity events, and the Proposed Amendments go farther, creating an additional 24-hour notification obligation in the event a ransomware payment is made. Additionally, the Proposed Amendments create new requirements for larger “Class A” companies, including a risk assessment by an external expert every three years and an independent audit of cybersecurity programs annually.

Continue Reading NYDFS Proposes Significant Amendments to its Cybersecurity Rules

As smartphone capabilities and the ubiquity of their usage increases, an increasing number of functions that were previously performed by standalone devices have now moved into the app ecosystem – but doing so raises the risks of personal data misuse, and consequently regulatory scrutiny under data privacy laws. Recent advice and comments provided by EU data protection regulators regarding Qatar FIFA World Cup apps highlight this risk.

Continue Reading EU Regulators’ Comments on World Cup Apps Highlight Data Protection Risks

Data, privacy & cybersecurity partner Ed McNicholas and counsel Kevin Angle authored the USA chapter in Cybersecurity Laws and Regulations 2023. The chapter provides an overview of common issues in cybersecurity laws and regulations, including cybercrime, applicable statutes, prevention of cyber-attacks, sector-specific guidance, corporate governance, litigation, insurance, and investigatory and police powers.

Click here to

Security may not be the first word that comes to mind when thinking about GDPR and UK GDPR compliance, but recent matters indicate it should certainly be near the top of any compliance checklist.

Security of personal data is fundamental to every organization, and its significance scales depending on the type of data processing that takes place. Of the penalties issued for data protection infractions across the EU and UK in 2022 so far, over 70 include security, which is almost 20% of the total fines issued. Specifically, these fines were issued due to a breach of Article 32 of the GDPR/UK GDPR: failing to have appropriate technical and organizational measures in place to protect personal data. A breach of Article 32 of the GDPR or UK GDPR technically only attracts the “standard maximum” fine of €10/£8.7 million or 2% of global annual turnover, however the offence is often coupled with other transgressions, which has led to fines over €20 million.

Continue Reading Data Protection: The Increasing GDPR/ UK GDPR Focus on Security

On October 26, 2022, in a divided 3-2 vote, the Securities and Exchange Commission (“SEC”) proposed a new rule, 206(4)-11, under the Investment Advisers Act of 1940 and related amendments (the “Proposed Rule”) requiring SEC-registered investment advisers to exercise effective and sufficient oversight over their service providers so as to fulfill the adviser’s fiduciary duty, comply with the federal securities laws and protect investors from potential harm.  Notably, the Proposed Rule prohibits advisers from outsourcing certain services or functions to service providers without meeting minimum diligence and monitoring requirements. 

The Proposed Rule is meant to add an additional layer of comprehensive oversight by advisers for investor protection and is consistent with the SEC’s continued focus on protecting investors from third-party risk, including cyber risk, in the start of what is expected to be an active season of rule making.

Continue Reading The SEC’s Proposed Outsourcing Oversight Requirements for Investment Advisers

If 2022 has been any indication, the innovations of Web3—the developing, largely decentralized, autonomous internet, enabled by technologies such as blockchain, smart contracts, decentralized autonomous organizations (DAOs), and digital assets—will lead to an era of rethinking the ways that privacy, cybersecurity, and consumer protection are regulated for these technologies. Proponents of Web3 argue that Web3 will promote individual data ownership, transparency, and freedom, but over the last few years, lawmakers have struggled to keep up with the rapidly changing nature of the Web3 space and force the new technology to fit within the existing legal framework.

This year, however, authorities have called for a more harmonized approach to Web3 regulation. Several recent developments—including Executive Orders from President Biden and California Governor Gavin Newsom, invocation of a long-dormant statutory provision by the Consumer Financial Protection Bureau (CFPB), and proposed amendments to the Cybersecurity Information Sharing Act—have signaled that lawmakers and regulators are prioritizing new approaches to privacy, cybersecurity, and consumer protection in an attempt to regulate Web3.

Continue Reading Privacy, Cybersecurity, and Consumer Protection Are Set To Be Key Focus Areas For Regulators As Web3 Innovation Continues

On October 5, 2022, Joe Sullivan, Uber’s former Chief Security Officer, was convicted of “obstruction of the proceedings of the Federal Trade Commission and misprision of felony in connection with the attempted cover-up of a 2016 hack at Uber.” He faces up to eight years in prison. The conviction marks the first time that an individual company executive has faced criminal charges related to an information security breach.

While this conviction could be viewed as a slippery slope toward more cases—both civil and criminal—where Chief Security Officers or Chief Information Security Officers are found personally liable for company data breaches that happen on their watch, Sullivan’s actions went beyond simple failure to stop a breach or even failure to report it. As the prosecutor in the case, US Attorney Stephanie Hinds explained, “Sullivan affirmatively worked to hide the data breach from the Federal Trade Commission (FTC) and took steps to prevent the hackers from being caught. We will not tolerate the concealment of important information from the public by corporate executives more interested in protecting their reputation and that of their employers than in protecting users. Where such conduct violates the federal law, it will be prosecuted.” By bringing these charges the government was sending a message that it views companies as responsible for the data they collect from consumers and expects those companies to be transparent and honest when dealing with a known data breach.

Continue Reading Former Chief Security Officer of Uber Convicted for Mishandling 2016 Data Breach