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Strategies for Avoiding Big Privacy “Don’ts” With Personal Data Strata Conference Santa Clara, CA February 19, 2015 Alysa Z. Hutnik Lauri Mazzuchetti.

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Presentation on theme: "Strategies for Avoiding Big Privacy “Don’ts” With Personal Data Strata Conference Santa Clara, CA February 19, 2015 Alysa Z. Hutnik Lauri Mazzuchetti."— Presentation transcript:

1 Strategies for Avoiding Big Privacy “Don’ts” With Personal Data Strata Conference Santa Clara, CA February 19, 2015 Alysa Z. Hutnik Lauri Mazzuchetti

2 Topics of Discussion  Consumer Privacy Update (and what it means for 2015)  The Internet of Things  Federal and state regulators’ focus on privacy and Big Data  Enforcement trends  Risks with text/phone outreach to consumers  How to Avoid Big Privacy “Don’ts” 2

3 Big Data Snapshot  91% of Americans feel that consumers have lost control over how personal information is collected and used by companies  80% of respondents who use social networking expressed concern about third parties such as advertisers accessing their online data 3 Concerns are translating into consumer action... 86% of consumers have taken steps to remove or mask their digital footprints:  Clearing cookies  Encrypting  Avoiding use of real name  Adopting virtual networks to mask IP addresses

4 Recent Consumer Privacy Developments 4 “The FTC continually assesses new developments and emerging trends and threats in the privacy area.” - Jessica Rich, Director, FTC Bureau of Consumer Protection, June 2014 “[B]y law and practice, the FTC weighs market benefits and harms as part of its enforcement and policy work.” - Jessica Rich, January 2015

5 The Internet of Things  Objective: to help businesses “provide consumers the protections they want and allow the benefits of the Internet of Things to be fully realized.”  Focus: “smart home,” health and fitness devices/apps, and connected cars  Security risks identified  Enabling unauthorized access to and misuse of personal information  Facilitating attacks on other systems  Creating risks to personal safety 5

6 IoT Report Recommendations 6 Best Practices Data MinimizationSecurity By DesignNotice and Choice  Risk assessments  Encryption  Access control  Continued monitoring  Impose reasonable limits on collection and retention  Collect less sensitive/ de-identified data Offer flexible options - opt-in at purchase - privacy tutorials - icon/menu/dashboard

7 7 Federal Regulators’ Focus on Big Data

8 Using Big Data to Categorize Consumers Concern: categorizing consumers in ways that may affect them unfairly (or unlawfully) 8  Different prices/discounts to different consumers  Tailoring/limiting financial products (e.g., “gold level” to high earners)  “Aggregate scoring models” that assess credit risks based on aggregate credit characteristics of groups of consumers who shop at certain stores  Health-related determinations

9 Another Privacy Cop on the Beat? “Privacy and security concerns have been cited as reasons consumers do not use mobile banking and mobile financial management services.” -- CFPB, June 2014 Areas of Interest  Privacy and data security concerns for mobile devices  Mechanisms to disable lost/stolen mobile devices that provide financial services  Steps consumers should take to protect their data and identity when using mobile devices 9

10 States’ Focus on Risks re: Consumer Data Areas of Focus  Data breaches  Consumer risks from big data  Cybersecurity threats (e.g., cloud data, BYOD policies) FTC Areas of Collaboration  Protecting user-generated health information  Risks re: Internet of Things  Mobile payments/mobile security

11 States’ DNT Efforts California AG  CalOPPA: privacy policies must disclose how website operators respond to DNT signals that allow consumer choice re: data collection  Make policies “more effective and meaningful” to consumers:  Clear and conspicuous, plain straightforward language  Describe how and what PII is collected and used and shared with third parties  Provide a readily-identifiable section on DNT with a clear header (e.g., “Online Tracking”) 11

12 Enforcement Trends: Flawed Notice, Choice, and Security  Location: Privacy Policy— Snapchat does not ask for, track, or access location-specific information  Analytics tracking service collected location information  Snaps Disappear?: Widely publicized methods to save snaps  Address Book: Friend finder accessed phone address book without consent  Registration: Security issue that allowed user to create an account using another person’s phone number 12

13 Enforcement Trends: Bypassing Notice and Choice  Site allegedly harvested personal data from Facebook without user consent to create 73MM “Jerk” profiles, including children  Alleged deception under Section 5 13  Data broker allegedly purchased payday loan applications of financially at risk consumers and sold the application data to unscrupulous merchants  Alleged unfairness under Section 5

14 Enforcement Trends: Platforms and Third- Party Liability 14 Merchants / App Developers Wireless Service Provider App storefront/platform

15 Timely Issue on Use of Consumer Contact Data – TCPA Compliance TCPA (federal law) prohibits:  Autodialed calls/texts to cell phones without appropriate consent  Prerecorded message calls to cell phones and landlines without appropriate consent and disclosures  Telemarketing calls to numbers on the National DNC Registry or company-specific DNC lists Liability can attach for…  Telemarketing calls/texts  Informational calls/texts  Debt collection calls/texts 15

16 Old Law; Why is TCPA a hot topic now?  Statutory damages  $500 per violation  $1,500 max per “willful” violation  Numbers can get very high, very quickly  Ex: $500,000 for 1000 texts; $5 million for 10,000 texts; $50 million for 100,000 texts, etc.  No requirement to show actual injury  Liability typically can go back 4 years 16

17 Why is TCPA a hot topic now? (cont’d…)  Law is in state of flux due to case law, FCC rulings, and pending petitions  An explosion of TCPA lawsuits  2010 – 272 lawsuits  2011 – 660 lawsuits  2012 – 1100 lawsuits  2013 – 1860 lawsuits  2014 – new lawsuits  2015 ‒ no sign of slowing down...  Exposure for service providers and name brands to be on the hook, even if others made the unlawful calls 17

18 Representative TCPA Class Settlements  Bank of America agreed to pay $32MM in cash into a settlement fund. Stephanie Rose v. Bank of America Corp., Case No. 5:11-cv (N.D. Cal.)  $24.1MM settlement based on auto-dialed debt collection calls to cell phones not listed on loan application. Arthur v. Sallie Mae, 2:10-cv (W.D. Wa.)  $6.25MM settlement for national text-message campaign. Kazemi v. Payless Shoesource, Inc., 3:09-cv (N.D. Cal.)  Capital One agrees to pay $73MM in cash into a settlement fund. (N.D. Ill) 18

19 Avoiding Big Privacy “Don’ts”  Online and Mobile Developers  Platform Providers  Ad Networks and Other Third Parties  Sellers and Marketers 19

20 20 Product/Device Developers  Think Privacy from the Start  Empower Consumer Choice  Reassess Your Data Drilling  Transparency is Paramount

21 21 Think Privacy from the Start Privacy and Security By Design  Incorporate privacy and data security protections  Limit/de-identify the data that you collect  Securely store the data that you retain  Limit third-party access “need-to-know”  Safely dispose of data that you no longer need

22 22 Empower Consumer Choice  Give Users Tools that Enable Choice  Privacy settings  Opt-outs  Mechanisms to control PII collection and sharing  Make it easy for people to find the tools you offer  Design the tools so they’re simple and easy to use  Honor users’ choices

23 Reassess Your Data Drilling Regularly Reassess Your Data Collection Practices  Does the data collection include name, contact details, or other PII on the user or their contacts?  Does your app collect location data or a unique ID per user or device?  Is there a valid purpose for this type of data collection and access?  Do you retain the data for a period of time consistent with the reason for collecting it?  Can third parties access and use the data to make a personally identifiable profile of your users? 23

24 24 Transparency is Paramount Clearly explain key terms  Collection and protection of data  Consumer control and access  Accessibility to third parties New or Additional Sharing  Disclosures  Consent Honor Your Promises

25 Platforms Providers  Enhance frequency and prominence of disclosures within API  Offer tools that allow consumers to report non-compliance with privacy policies and terms of service  Educate developers on obligations and enforce requirements as needed 25

26 Ad Networks and Other Third Parties  Ad Networks / Analytics Co.’s  Create and provide a privacy policy to the developers  Avoid device-specific identifiers or delivering ads outside the context of the app  Operating Systems  Develop global settings and overrides so that users can set privacy controls  Collaborate with device manufacturers on setting cross- platform privacy standards 26

27 Sellers and Marketers  Just phone? Text too?  Type of message (commercial/informational)  Autodial/prerecorded message?  Customer, former, prospect?  Length of campaign  Consent  Is it valid?  Do I need it in writing?  Vendor due diligence  Stay informed  Quickly evolving legal landscape  Potential significant liability 27 Carefully plan each consumer outreach campaign...

28 28 Questions? Alysa Z. Hutnik PARTNER Kelley Drye & Warren LLP Advertising, Privacy & Information Security Phone: (202) Connect with Kelley Drye web: blog: Lauri A. Mazzuchetti PARTNER Kelley Drye & Warren LLP Litigation Phone: (973)


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