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 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

On March 15, 2022, President Biden signed into law significant new federal data breach reporting legislation that could vastly expand data breach notice requirements far beyond regulated entities or entities processing personal data. Unceremoniously tucked as Division Y into the H.R. 2471 Consolidated Appropriations Act, 2022, the Cyber Incident Reporting for Critical Infrastructure Act of

On March 1, 2022, the Senate passed a data breach and cybersecurity bill that could vastly expand data breach notice requirements. The Strengthening American Cybersecurity Act (the “Senate Bill”), which now shifts to the House of Representatives, would require organizations in certain critical infrastructure sectors to report substantial cybersecurity incidents to the Department of Homeland Security within 72 hours after the organization reasonably believes the cyberincident has occurred, among other measures intended to enhance the nation’s cybersecurity posture. Covered organizations would also be required to report ransom payments within 24 hours of making a payment in response to a ransomware attack. These provisions are not limited to data breaches affecting personal data and would significantly expand the breadth of data breach reporting requirements to many commercial enterprises that have not focused on consumer privacy issues.

While the bill was criticized by FBI Director Christopher Wray and Deputy Attorney General Lisa Monaco for shifting cyber-focus from the DOJ/FBI to DHS/CISA, it remains likely to pass the House, where similar legislation was supported last year as part of the annual defense authorization package. In addition to its breach reporting provisions, the Senate Bill would also require or encourage new cybersecurity measures for federal agencies, clarify the roles of certain cybersecurity officials and authorize the federal contractor cybersecurity FedRAMP program for five years.

Continue Reading Senate Approves Breach Reporting Legislation; Likely to Pass House

Attorneys for Blackbaud and the putative class action plaintiffs allegedly impacted by the publicly-traded software company’s data breach last year were scheduled to meet last month to discuss a possible resolution of the remaining claims in the multi-district litigation. But the only filings in the case since then concern a contemplated amended complaint, suggesting the MDL is entering a new phase rather than nearing a conclusion.

The planned mediation and order regarding the expected new pleading came several days after Blackbaud announced, along with strong third-quarter financial results, that it has nearly exhausted its $50 million in relevant insurance coverage.

“Based on our review of expenses incurred to date, and upon consideration of the number of matters outstanding,” the company reported, referring to hundreds of customer requests for reimbursement in addition to the putative consumer class actions in the U.S. and Canada, “we believe that total costs related to the Security Incident will exceed the limits of our insurance coverage during the fourth quarter of 2021.” The company, whose fundraising and constituent-relationship software is widely used by nonprofits, noted that breach-related costs would “negatively impact our [Generally Accepted Accounting Principles] profitability and cash flow for the foreseeable future.”

Continue Reading Blackbaud Ransomware Litigation Update

Preeminent privacy scholar and George Washington University Law School professor, Daniel Solove joined Ropes & Gray’s virtual conference on “The Future of Global Data Protection,” for a wide-ranging discussion with Edward McNicholas, co-leader of the Ropes & Gray data, privacy & cybersecurity practice, in which the pair explored:

  • The state of complexity and inconsistency in the international privacy law landscape
  • The inherent flaws in the models on which privacy laws are currently based
  • The risks of moving toward a regulatory model
  • Theories of harm in data breach cases
  • The role of the courts in adjudicating privacy laws

Please see below for an overview of some of these topics, or to access a recording of the session please visit our blog: RopesDataPhiles.

Continue Reading How Data Breaches Are Shaping the Global Data Protection Debate

Modern smartphones, wearables and internet-enabled devices are capable of monitoring heart rate, blood oxygen levels, steps taken, prescription adherence, and other vital health-related activities. Contrary to popular belief, HIPAA does not cover many of these applications and devices. On September 15, 2021, the Federal Trade Commission issued a Policy Statement attempting to assert authority to police that gap.  The Policy Statement explains the FTC’s view that the Health Breach Notification Rule applies to mobile health applications. This Policy Statement signals increasing FTC scrutiny designed to safeguard sensitive health data on a variety of modern technologies that consumers use to monitor and improve their health.

Continue Reading FTC Warns Health Apps and Connected Device Companies to Comply With Health Breach Notification Rule

There were 887 million reasons why one GDPR story was dominating the press on Friday. But sneaking under the radar was a decision from the English High Court that I reckon should be more interesting to businesses in the UK.

In a nutshell, the High Court rejected a £5,000 claim for distress-related damages brought by an individual whose personal data were involved in a cyber-attack suffered by DSG, a British retailer that operates the Currys PC Worlds and Dixons Travel brands. The claim relied on breach of confidence, misuse of private information, breach of the DPA 1998 and common law negligence, and the judgment is short and easy to digest, so it’s well worth a read.
Continue Reading De-stressing Distress Disputes

Article29Data security notification requirements could become much stricter under a proposed rulemaking from the Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation. The proposal, published January 12, 2021, would impose new security incident notification requirements on federally regulated “banking organizations” and, notably, their service providers. If adopted, the proposed rule would expand upon existing notification requirements—adding a 36-hour notice window—and would, for the first time, impose direct notification obligations on service providers.
Continue Reading New Security Incident Notification Requirements for Federally Regulated Banks

On January 12, 2021, the U.S. District Court for the District of Columbia granted a motion to compel production of allegedly privileged cybersecurity documents in Guo Wengui v. Clark Hill, PLC, 1:19-cv-03195.  In doing so, the Court determined that the Defendant’s cybersecurity assessment was neither covered by work product protection nor attorney client privilege because the Defendant law firm would have investigated the breach in the same way as a business function.

Continue Reading DC District Court Requires Production of Cybersecurity Assessment Prepared at Direction of Outside Counsel