Data Security

Europe’s data protection rules will undergo their biggest change in two decades when the new General Data Protection Regulation (“GDPR”) goes into effect on May 25, 2018. The GDPR replaces the current Data Protection Directive and imposes uniform data security requirements on all EU members. While the GDPR is “an evolution, not a revolution” for data protection, there are several significant changes for which companies should be prepared.

The advice we always give to clients regarding privacy policies is: “say what you do and do what you say.” It seems simple, but simplicity can be deceiving. Companies want to reassure consumers that their personal data is safe and secure; however, in today’s world, no one can make fail-safe representations of security. Uber’s recent settlement with the FTC illustrates this problem.

With the rise of innovations like cloud technology and software-as-a-service, clients are increasingly finding that it makes business sense to outsource computerized services, from payroll processing to the storage of electronic medical records. While doing so often cuts costs, routing (frequently confidential) data through third-party service providers also implicates serious cybersecurity concerns and, in some cases, may increase potential liability. Further, one of the pillars of a commercially reasonable information security program is selecting and retaining service providers capable of maintaining appropriate safeguards. To address these concerns, and to keep data safe, clients should require service providers to furnish them with Service Organization Control (“SOC”) Reports, particularly SOC 2 Reports.

SOC Reports were developed by the American Institute of CPAs (AICPA) to provide information about the robustness and quality of a service provider’s internal controls over certain types of data. There are three types of SOC Reports, each serving separate functions.

On April 24, 2017, the Office of Civil Rights (“OCR”) announced the first HIPAA settlement based on the impermissible disclosure of unsecured electronic protected health information by a wireless service provider. CardioNet, an ambulatory cardiac monitoring service, provides remote mobile monitoring of and rapid response to patients at risk for cardiac arrhythmias, agreed to pay $2.5 million, and to implement a corrective action plan.

As reported by the OCR, in 2012 CardioNet reported to the OCR the theft of a workforce member’s unencrypted laptop containing electronic PHI (“ePHI”) of 1,391 individuals. OCR’s investigation revealed that CardioNet had an insufficient risk analysis and risk management processes in place at the time of the theft.   Additionally, CardioNet’s provided the OCR draft policies and procedures implementing the HIPAA Security standards, and was unable to produce final policies or procedures implementing the security safeguards for ePHI, including mobile devices.

Ransomware. It is the word every corporate board and IT team fears. Ransomware is a type of malicious software that can quickly shut down an entire network of computers and compromise an enormous amount of critical data. Often, when a ransomware attack occurs, all connected systems are locked down and a message appears on the…

As technology advances, the advertising world is keeping pace. Companies can now advertise more easily and effectively across the Internet. However, the risks associated with that convenience are becoming more and more apparent.

Many companies employ third-party advertising services that use online consumer data and automated software to place advertisements across millions of websites, thousands of apps, and different user-generated video services. Unfortunately, because of this wide-reaching marketing tool, organizations employing targeted ads risk having their advertisement and brand displayed alongside offensive content. (Some types and uses of targeted ads have even faced legal challenges.)

Internet search giant Yahoo!Inc. (“Yahoo”) revealed last year that it was the victim of two massive data breaches back in 2013 and 2014 that potentially affected more than 1.5 billion users. Investigations into the incidents continue to reveal potentially damning information regarding what the company knew and when, how the company responded to the breaches, and the status of Yahoo’s information security at the time of the breaches. The details that have emerged paint the picture of a company that failed to adhere to basic data security requirements. Unfortunately, the technology company will likely become a case-study in what happens when an organization fails to follow security best practices.

Remember when Edward Snowden showed the world how easy it is for your cell phone to record everything you say? Initial gut reaction for many was something along the lines of disbelief to shock. As time went by, many people took comfort in the idea that the government could not care less about their day-to-day activities. After all—for most of us—our day consists of the daily routine of workout, work, and daily errands. Yet, spying is not limited to the intelligence community. As we have seen again and again, health information is particularly valuable. Devices such as Internet cameras (think security cameras) or perhaps even web cams (the little lens that stares from the top of your laptop) pose risks to health data. Many health entities have not considered the unique risks posed by such devices, but it is a risk the Federal Trade Commission is not ignoring.

Colleges and universities frequently hire third-party vendors to provide services that involve student data—cloud storage, online education delivery, and online grade books to name a few. Although the arrangements are common, they can run afoul of the Family Educational Rights and Privacy Act (20 U.S.C. § 1232g; 34 CFR Part 99) (FERPA) and other data privacy best practices. Colleges and universities should contemplate privacy and security issues when contracting with third-party vendors and include language in the service agreement that identifies exactly what information is being shared and protects how the information can be used in the future.