Key Point: The FTC’s fine is the largest for any COPPA-related incident; however, two issues of first impression alleged in the Complaint could have a more significant impact over the long term.

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We previously reported that the Federal Trade Commission (“FTC”) entered into a settlement agreement with Facebook, Inc., which included a record-breaking $5 billion fine for repeat violations of consumers’ privacy rights. The FTC recently announced that it had entered into a settlement with Google, LLC (“Google”) and its subsidiary YouTube, LLC (“YouTube”), in which those entities will pay a $170 million fine for violating the Children’s Online Privacy Protection Act (“COPPA”) Rule. The $170 million fine is the largest the FTC has issued in a COPPA case since Congress enacted the law in 1998.


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St. Louis was named after Louis IX (born in 1214!), hosted a World Fair (technically, the 1904 Louisiana Purchase Exposition), the fleur-de-lis is ubiquitous, and we love soccer and football, although we have neither major league football nor soccer teams (St. Louis FC, our USL minor league soccer team, has a crest which features, you guessed it, a fleur-de-lis). However, St. Louis is known as the “Gateway to the West” – directionally away from Europe. Every once in a while, St. Louisans, like the rest of America, need to heed to what is going on over the pond, particularly when it comes to privacy and data security developments. Below is a brief update on a few foreign issues to begin the New Year.

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Talking with bestie on social media!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.
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ocean_skyline178637162Posting a terms of use document on your website or mobile application defines the terms that govern your customers’ use of your website or mobile application and greatly reduces your exposure to liability when providing goods or services through a web-based application. A privacy policy describes to your consumers what information you collect, how you

dangerTechnology has changed the way businesses market themselves to consumers. Businesses now have the ability to identify shifting consumer preferences, launch highly targeted advertising campaigns, and communicate instantly with potential customers. One thing this new marketing has in common? Consumer data. As marketing technologies evolve, companies should be aware that the myriad of data security regulations don’t just apply to how companies conduct their business, but how they market it as well.
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sherrifiStock_000005376033_LargeFor the first time in its enforcement history, the Consumer Financial Protection Bureau (“CFPB”) took action against a company for deceiving consumers about the company’s data security practices. The CFPB found that Dwolla, Inc. (“Dwolla”), an online payment system, made numerous false promises about the strength and extent of its data security practices. The CFPB’s action is also notable because the agency acted preemptively — Dwolla had never detected a data breach and no consumer data had been reported stolen.

The CFPB found that Dwolla claimed on its website and in direct communications with consumers that its data security practices “exceed” or “surpass” industry security standards; but, in reality, Dwolla failed to employ reasonable security measures to protect consumer data. In addition, Dwolla claimed that “all information is securely encrypted and stored” and that its mobile applications were safe and secure. However, the CFPB found that Dwolla did not encrypt certain sensitive consumer information and released applications to the public before testing that they were secure. The agency found several other examples of statements Dwolla made that could not be established as true.
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city-namesiStock_000049719310_LargeYour business is an international company selling products to U.S. consumers. In the last few years, you may have heard a lot about high-profile information privacy and security cases brought by the U.S. government. Should you be concerned? Most definitely.

On Feb. 23, 2016, the FTC announced that Taiwan-based computer hardware maker ASUSTeK Computers, Inc. (“ASUS”) agreed to a 20-year consent order, resolving claims that it engaged in unfair and deceptive practices in connection with routers it sold to U.S. consumers. According to the FTC’s complaint, ASUS failed to take reasonable steps to secure the software for its routers, which it offered to consumers specifically for protecting their local networks and accessing their sensitive personal information. The FTC alleged that ASUS’s router firmware and admin console were susceptible to a number of “well-known and reasonably foreseeable vulnerabilities”; that its cloud applications included multiple vulnerabilities that would allow cyber attackers to gain easy, unauthorized access to consumers’ files and router login credentials; and that the application encouraged consumers to choose weak login credentials. By failing to take reasonable actions to remedy these issues, ASUS subjected its customers to a significant risk that their sensitive personal information and local networks would be subject to unauthorized access.
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Little Girl Crying with TearsToday the FTC announced a $100-million settlement of its most recent data security lawsuit against LifeLock, the ubiquitous B2C provider of credit monitoring and identity theft protection to consumers.  Despite years of litigation with the FTC and 35 states’ attorneys general, LifeLock has continued with a business model that taps into consumers’ visceral fear of identity theft, and also consumers’ persistent belief that such exposure can magically disappear… all for “less than $10/ month.” But while “Nobody can conceive or imagine all the wonders there are unseen and unseeable in the world,” LifeLock’s settlement with the FTC is a reminder that there is no perfect protection against identity theft.
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checking-iniStock_000015745218_LargeYesterday the FTC announced it has settled its claims against Wyndham for inadequate data security, with Wyndham signing on to essentially the same consent order used by the FTC in most of its more than 50 concluded data security enforcement matters. The settlement marks the end of a three-year legal battle in which Wyndham attempted, unsuccessfully, to restrict the FTC’s authority to pursue companies for inadequate data security as an ”unfair” business practice under Section 5 of the FTC Act.
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