Last week, the US Court of Appeals for the DC Circuit issued a long-awaited decision on an omnibus challenge to the FCC’s interpretation of the TCPA. While the decision provides some relief for businesses, it does not eliminate the prospect of TCPA liability and leaves important TCPA interpretive questions unresolved. Businesses should continue to be vigilant regarding consent and opt-out procedures when sending automated text messages and automated or pre-recorded calls to consumers. Continue Reading
The validity of Model Clauses for EU personal data transfer to the United States is now in real doubt as a result of a new Irish High Court judgment stating that there are “well founded grounds” to find the Model Clauses invalid. The issue of Model Clauses as a legitimate data transfer mechanism will now be adjudicated by the European Court of Justice (ECJ), the same court that previously overturned the Safe Harbor arrangement. EU and US companies will need to consider various strategies in anticipation of this decision.
Farewell ‘Safe Harbor,’ Hello ‘Privacy Shield’: Europe and U.S. Agree on New Rules for Transatlantic Data Transfer
After intense negotiations, and after the official deadline had passed on Sunday, 31 January 2016, the United States and the European Union have finally agreed on a new set of rules—the “EU-U.S. Privacy Shield”—for data transfers across the Atlantic. The Privacy Shield replaces the old Safe Harbor agreement, which was struck down by the European Court of Justice (ECJ) in October 2015. Critics already comment that the Privacy Shield will share Safe Harbor’s fate and will be declared invalid by the ECJ; nevertheless, until such a decision exists, the Privacy Shield should give companies legal security when transferring data to the United States.
While a text of the new agreement is not yet published, European Commissioner Věra Jourvá stated that the Privacy Shield should be in place in the next few weeks. According to a press release from the European Commission, the new arrangement
…will provide stronger obligations on companies in the U.S. to protect the personal data of Europeans and stronger monitoring and enforcement by the U.S. Department of Commerce and Federal Trade Commission (FTC), including through increased cooperation with European Data Protection Authorities. The new arrangement includes commitments by the U.S. that possibilities under U.S. law for public authorities to access personal data transferred under the new arrangement will be subject to clear conditions, limitations and oversight, preventing generalized access. Europeans will have the possibility to raise any enquiry or complaint in this context with a dedicated new Ombudsperson.
One of the most known critics of the U.S. data processing practices and initiator of the ECJ Safe Harbor decision, Austrian Max Schrems, already reacted to the news. Schrems stated on social media that the ECJ Safe Harbor decision explicitly says that “generalized access to content of communications” by intelligence agencies violates the fundamental right to respect for privacy. Commissioner Jourová, referring to the Privacy Shield, stated that “generalized access … may happen in very rare cases”—which could be viewed as contradictory to the ECJ decision. Critics also argue that an informal commitment by the United States during negotiations with the European Union is not something on which European citizens could base lawsuits in the United States if their data is transferred or used illegally.
The European Commission will now prepare a draft text for the Privacy Shield, which still must be ratified by the Member States. The EU Parliament will also review the draft text. In the meantime, the United States will make the necessary preparations to put in place the new framework, monitoring mechanisms and new ombudsperson.
Data privacy and security made the headlines practically daily in 2013. Our second annual Privacy and Data Protection 2013 Year in Review topped 65 pages!
What privacy, advertising and digital media trends will make headlines in 2014? Here are predictions from Of Digital Interest’s U.S. editorial team:
User Tracking Law Enforcement in California: “Amendments to the California Online Privacy Protection Act (CalOPPA) took effect on January 1, 2014 that require every website that is available to California residents to disclose how it responds to Do Not Track signals from web browsers and what third party data collection is occurring on the website. I predict that we will see enforcement activity from the California Attorney General about whether website owners/operators have made disclosures to consumers that not only meet the new CalOPPA requirements but also accurately reflect tracking activities by the website and by third parties.” – Heather Egan Sussman, Partner
No Kid-ding: “January 1 marked the six-month anniversary of the effective date of the amended “COPPA Rule,” which requires businesses to have parental consent before personal information is collected from kids under age 13. Having just approved a parental consent method (in December), I predict that the Federal Trade Commission (FTC) will initiate COPPA enforcement actions related to social media (now that photos and videos are personal information under COPPA) and in mobile apps (now that COPPA covers geo-location data). Perhaps the FTC will start by investigating the app developers to which the FTC sent letters explaining their new COPPA compliance responsibilities last May.” – Julia Jacobson, Partner
Safe Harbor Will Stay Safe: “Last year’s government surveillance accusations made the U.S. Safe Harbor Program a flash point for debate between EU and U.S. data protection regulators. Nevertheless, very few on either side of the Atlantic believe that companies properly certified under the Safe Harbor Program should disrupt data transfers necessary to meet credible business objectives. I predict that the rhetoric will continue, but so will the U.S. Safe Harbor Program, albeit perhaps tweaked in response to the European Commission’s recently-issued recommendations to improve the Progam’s effectiveness. More debate to come in 2014, but, meanwhile, many U.S. companies will continue to view Safe Harbor certification as their preferred approach to E.U. data protection compliance and will continue to implement data protection policies and programs intended to comply with the Safe Harbor Principles.” – Ann Killilea, Counsel
Cloudy Forecast: “The year of 2014 is quickly becoming the year of the mega-sized data breach, with the Target and Neiman Marcus incidents leading the way. Corporate customers have long been aware that cloud offerings present data security concerns, but may not have been as laser-focused on the data breach aspects as they should. I predict that in 2014, as the cloud service market becomes a commercial fact of life, data breach concerns will dominate how customers select and contract with their cloud service providers, and how they implement their incident response plans by including cloud service providers in their preparations.” – [...]
More than 4,000 U.S.-based multinational companies have selected the U.S. – E.U. Safe Harbor Program as the preferred compliance mechanism for international data transfers from the E.U. to the U.S. Recent transatlantic surveillance politics between the European Union and the United States have, however, focused a controversial spotlight on the Safe Harbor Program. In the world of international personal data transfer regulation, the Safe Harbor Program has become a cause célèbre in the E.U.-U.S. trade discussions and in political commentary by E.U. data protection regulators. Despite the political wrangling, European data protection officials are unlikely to eliminate the benefits of the Safe Harbor Program without offering an alternative program that recognizes the work of companies in implementing E.U.-compliant data protection programs.
For more information on this subject, see “EU Privacy Safe Harbor Still Alive and Well, With Implications for Enterprise Risk Management,” written by Ann Killilea and published by Thomson Reuters Practical International Corporate Finance Strategies, November 15, 2013.