February was a busy month for those monitoring the latest developments with the California Consumer Privacy Act (CCPA). After the month kicked off with a series of California Attorney General Informational Sessions, the California State Assembly’s Privacy and Consumer Protection Committee conducted a hearing with testimony from interested parties, including Alastair Mactaggart (the architect of the initiative that led to the enactment of the CCPA), representatives from the California Attorney General’s Office, public interest groups, and industry groups. This hearing also coincided with the introduction of new proposed amendments to the CCPA that would, among other things, require businesses to disclose an estimate of what they paid or received for the sale of consumer data. The month culminated with the introduction of a Senate Bill that would greatly expand the reach of the CCPA by, among other things, granting consumers a private right of action for all CCPA violations and not just data breach violations. 
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On Friday, January 25, 2019, California Attorney General Xavier Becerra’s Office held the fourth of its six public forums in connection with its rulemaking process for the California Consumer Privacy Act (“CCPA”). The purpose of the open forum, which was held in Los Angeles at the Ronald Reagan State Building, was to provide an initial opportunity for the public to participate in the CCPA rulemaking process. The formal rulemaking process is scheduled to begin later this year.

As noted in a prior Firewall blog post, the recently-enacted CCPA grants California consumers the right to know what information companies collect about them, the right to “opt out” from allowing companies to sell their personal information, the right to demand that companies delete collected information, and the right to receive equal service even if consumers exercise their “opt out” right. As required by the CCPA, the Attorney General must adopt its regulations on or before July 1, 2020. Businesses, however, must comply with the CCPA even before then, starting on January 1, 2020. 
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Last Friday, the Illinois Supreme Court delivered the highly anticipated Rosenbach v. Six Flags Entertainment Corp., 2019 IL 123186, opinion. Businesses and consumers alike watched for the Court’s opinion regarding whether mere technical violations of the Illinois Biometric Information Privacy Act (“BIPA”) gave plaintiffs the requisite standing to seek damages under the statute. The Court heard the case after the Second District Appellate Court of Illinois ruled that an individual was not a “person aggrieved” by a technical violation and several other courts, both state and federal were split over the issue.  Rosenbach v. Six Flags Entertainment, 2017 IL App (2d) 170317.  In a fairly short opinion, focusing on statutory construction and the common meaning of the word “aggrieved,” the Illinois Supreme Court reversed the Appellate Court.  2019 IL 123186, ¶ 1. The Illinois Supreme Court held that an individual was in fact an “aggrieved person” under the statute where they are unable to show actual damage, but there has been a violation of the statute. The Court held, where there is no actual harm, the individual is entitled to statutory relief for each violation. In short, a technical violation is a violation.  The Illinois Supreme Court took a strong stance in that individuals should not have to wait for actual harm with respect to their biometric information and that businesses would lack the requisite motivation to comply with statutes like BIPA without such an interpretation. 
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Over the last several years, the emphasis on privacy and data protection has grown significantly. With the amount of data collected by companies and technology skyrocketing, the need to protect personal information has been at the forefront of states’ legislative agendas. While all 50 states now have breach notification statutes, states are now taking a closer look at issues such as tracking online behavior and the use of biometric data. What used to be futuristic props in sci-fi media, face and fingerprint scanners, are now part of everyday life and consumer transactions. Despite the increase in the use of biometric data, only three states, Washington, Texas and Illinois have passed legislation addressing biometric data.
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In February of this year, the Securities Exchange Commission issued its updated Statement and Guidance on Public Company Cybersecurity Disclosures.  In April, the SEC issued an Order that, among other things, levied a $35 million fine against Yahoo! Inc. for failing to properly report a 2014 data breach.  These actions support the view that the SEC is consciously committing attention and resources to cybersecurity issues affecting public companies.

Here are some key takeaways from both the Guidance and from the Yahoo! Order: 
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Not long ago, financial technology (FinTech) startups were all seeking to disrupt the market for financial services and compete directly with financial institutions (FIs) for customers. But as these startups have grown into more mature companies, cooperation with FIs has come to replace disruption for many FinTech firms. These companies have realized that FIs can help scale their technology to larger bases of potential users, and can also help FinTechs raise capital by showing strong partnerships and FI distribution channels.

In turn, FIs now recognize that FinTech firms offer more than competition, representing potentially valuable partnerships with better technology and an improved user experience. By collaborating with FinTechs, FIs can improve product offerings and increase efficiency, all without the FIs committing significant resources to create new solutions themselves. 
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While U.S. companies focused on the imposition of burdensome data protection laws being implemented overseas, California was hard at work on revamping its own laws. As of June 25, 2018, the home of big technology, Silicon Valley, Facebook, and Google, was prepared to consider the California Consumer Personal Information Disclosure and Sale Initiative (“Initiative”) on the November 2018 ballot. The Initiative sought to enact a version of the California Consumer Privacy Act of 2018, requiring businesses to disclose, on a consumer’s demand, the personal information a business collects, the purpose for which it is used, and to whom it is sold or shared with. The Act also allows individuals to restrict the sharing of their information. Finally, the Act provides a simple path to recovery for violations. Although companies like Facebook and Google dropped their opposition to the Initiative, concerns remained among the business community, so California lawmakers stepped in.
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Congress’ 2,000-page Omnibus Spending Bill slipped in a trap for the unwary: a radical expansion of the reach of the Stored Communications Act, 18 USC §§ 2701-2712. The “Clarifying Overseas Use of Data Act,” aptly shorthanded as the CLOUD Act, successfully mooted the issue presented in the United States v. Microsoft Corp. case recently dismissed by the United States Supreme Court by instituting a new framework for cross-border discovery in criminal actions. Under the previous version of the Stored Communications Act (SCA), it was necessary to have a Mutual Legal Assistance Treaty (MLAT), essentially a treaty negotiated by a foreign nation and ratified by the Senate. The CLOUD Act, passed on March 23, 2018, allows authorities to bypass MLATs and gives law enforcement the ability to directly compel production of materials by a party storing its data abroad, as well as allowing foreign governments to access data stored in the U.S. 
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In 2017, the Cayman Islands passed the Data Protection Law (“DPL”), which reads much like the upcoming European Union General Data Protection Regulation (“GDPR”) that goes into effect Mary 25, 2018. The DPL applies to entities falling within the definition of “data controller” who are established in the Islands or who process data in the Islands. The DPL divides data into two categories, personal data and sensitive data. Certain information is exempt from the application of the DPL, such as data processed in connection with a corporate finance service.[1] The DPL gives individuals the right to access their information, object to processing, and the right to request their information be corrected or erased.


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