The Secure Times

An online forum of the ABA Section of Antitrust Law's Privacy and Information Security Committee


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Does Free E-mail Threaten the Attorney Client Privilege and Other Ethical Duties to the Client?

An interesting article by Chris Castle:

http://www.christiancastle.com/articles/2014/10/11/free-email-and-attorney-client-privilege-from-texas-lawyer-22-october-13-2014


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Canada’s Anti-Spam Law (CASL) in force July 1

Canada’s Anti-Spam Law (CASL) enters into force on Canada Day, July 1.  It was passed in 2010 as a “made-in-Canada” solution to “drive spammers out of Canada“. 

Are you outside Canada?  It’s important to know that this law reaches beyond Canada’s borders.  CASL is already affecting businesses in the United States, Europe and elsewhere as they change their communications practices to send emails and other “commercial electronic messages” into Canada. 

As we have described in our presentation Comparing CASL to CAN-SPAM, the new law applies to messages that are accessed by a computer system in Canada.  That means that messages sent by a person, business or organization outside of Canada, to a person in Canada, are subject to the law.

CASL expressly provides for sharing information among the Government of Canada, the Canadian CASL enforcement agencies, and “the government of a foreign state” or international organization, for the purposes of administering CASL’s anti-spam (and other) provisions.  The MOU among the Canadian CASL enforcement agencies similarly references processes to share and disseminate information received from and provided to their foreign counterpart agencies. 

In a speech on June 26, the Chair of the Canadian Radio-television and Telecommunications Commission, Jean-Pierre Blais, emphasized the CRTC’s cooperation with its international counterparts to combat unlawful telemarketers, hackers and spammers that “often operate outside our borders“.  The Chairman specifically named “the Federal Trade Commission in the U.S., the Office of Communication (OFCOM) in the U.K., the Authority for Consumers and Markets in the Netherlands, the Australian Communications and Media Authority and others”, and noted that the CRTC has led or participated in many international networks on unlawful telecommunications.

Companies should also take note that a violation of CASL might also result in the CRTC exercising its so-called “name and shame” power, by posting the name of the offender and the violation on its online compliance and enforcement list.  The CRTC has for years published notices of violation with respect to its “Do Not Call List”, and is expected to take a similar approach for CASL notices of violation as well. 

The CRTC recently published a Compliance and Enforcement Bulletin on its Unsolicited Telecommunications Rules and on CASL, available here.  The CRTC recommends implementing a corporate compliance program as part of a due diligence defence: 

Commission staff may take into consideration the existence and implementation of an effective corporate compliance program if the business presents the program as part of a due diligence defence in response to an alleged violation of the Rules or CASL. Although the pre-existence of a corporate compliance program may not be sufficient as a  complete defence to allegations of violations under the Rules or CASL, a credible and effective documented program may enable a business to demonstrate that it took  reasonable steps to avoid contravening the law.


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Google Spain Decision – July 2 Discussion

On Wednesday, July 2, PRIS and the Media and Technology committees will host a dial-in to discuss the recent Google Spain “right to be forgotten” case.  Please join an expert EU-based panel to learn more about this landmark case and its implications for internet platforms going forward.

When: July 2 at noon ET.

Who: Mark Stephens, UK media law barrister; Professor Judith Rauhofer, privacy scholar; Professor Steve Peers, EU law scholar.

Link to Register: http://www.americanbar.org/content/dam/aba/marketing/20140702_at140702.authcheckdam.pdf

Please feel free to direct any questions – before, during, or after the call – to Gail Slater at lgslater@comcast.net.  Thanks.

 


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Senate ‘Malvertising’ Hearing

The Permanent Subcommittee of the Senate Committee on Homeland Security & Governmental Affairs held a hearing last week on the findings of its ‘Online Advertising and Hidden Hazards to Consumer Security and Data Privacy’ report.
In his introductory remark, Senator John McCain (R-AZ) noted that online advertising is now more profitable than broadcast television advertising. Indeed online advertising revenue was $42.8 billion in 2013, almost $3 billion more than television advertising.

At the same time, ‘malvertising’ increased over 200 % in 2013 to over 209,000 incidents generating over 12.4 billion malicious ad impressions (Testimony of Craig D. Spiezle Executive Director & Founder of Online Trust Alliance).

Online advertisements may be used as a vehicle to install malicious software on users’ computers. The software then steal personal information or attack other computers, most of the time without the user even knowing that his computer has been infected.

Online advertisements is a serious security threat for consumers, yet most consumers are not aware of this issue. During the questions sessions, Mr. Spiezle noted that that issue has been kept quiet from several years. Senator McCaskill (D-MI) reminded panelists that online advertising is the backbone of the Internet economy, yet consumers have not been sufficiently informed that their data is what fuels this economy. Maneesha Mithal, Associate Director, Division of Privacy and Identity Protection at the FTC, stated that the FTC informs consumers about online privacy on its OnGuard online site.

Who is Responsible?

What should be the responsibility of online advertising companies such as Google and Yahoo! ? Senator McCain believes that they “have a responsibility to help protect consumers from the potentially harmful effects of the advertisements they deliver.” They do not directly control the advertisements however, and as many as five or six companies can be involved in the process of publishing an ad, which makes finding which companies are responsible for having let the malware being installed quite difficult.

Also, Senator McCain noted that “commercial actors have limited incentives to develop and institute security measures for fear of becoming the liable party if something goes wrong.” However, the representatives of Google and Yahoo! emphasized that their companies have an incentive to fight malvertising in order to retain their customers’ trust.
Senator McCain asked Alex Stamos, Chief Information Security Officer at Yahoo!, if the site was responsible for malware, to which Mr. Stamos answered that Yahoo! takes responsibility for its users’ safety. Pushing further, Senator McCain then asked Mr. Stamos if Yahoo! would reimburse a user whose bank account has been depleted through a malware encountered on a Yahoo! site, but Mr. Stamos did not believe that Yahoo! has such responsibility.

Possible Solutions

George F. Salem, Senior Product Manager at Google, testified that his company has a two-pronged approach to fighting malware: preventing users from even visiting sites invested with malware and disabling ads which have malware. He also noted that consumers should be careful about downloads, always use the latest version of their browser and also install up-to-date antivirus software, a view shared by Ms. Mithal.

Senator Mc Cain also noted that “another problem in the current online advertising industry is the lack of meaningful standards for security” and expressed frustration that Google and Yahoo!, similar companies as they are, could not have the same best practice standards and implement them the same way, as they face the same problems.

Senator Mc Cain asked Ms. Mithal what could be the solutions to malvertising. She answered that increasing consumer education, having more robust industry self-regulations and also more enforcement would be key. Indeed, the FTC has already brought some enforcement actions against companies involved in online advertising for deceptive practices. Ms. Mithal stressed that there should be enforcement against the purveyor of malware but also against third parties which let the purveyor go by.

What’s Next?

Several online advertising companies, including Google and Yahoo, announced a new initiative called Trust in Ads that has as its goal the protection of consumers from malicious online advertisements and deceptive practices.

New legislation may be ahead. Senator Mc Cain asked Ms. Mithal if the FTC would need additional tools to protect consumer’s online privacy and Ms. Mithal mentioned that the FTC has advocated in the past to be given the authority to fine companies that do not maintain reasonable security practices. In her written testimony, Ms. Mithal wrote that the FTC “continues to reiterate its longstanding, bipartisan call for enactment of a strong federal data security and breach notification law.”


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Snapchat Settles FTC Charges That Promises of Disappearing Messages Were False

“Before u send any photo, msg or video, consider how u would feel if it reached a broader audience than you intend”, the FTC tweeted today after announcing a settlement with Snapchat, a popular messaging app that promised its users that their messages disappeared once expired.  Users are able to take photos, record videos, add text and drawings, known as snaps, and send them to a controlled list of recipients. Users also set a time limit for how long recipients can view their snaps (up to 10 seconds), and Snapchat claimed that after the time limit expired, the snaps would “disappear”.  However, the Commission alleged the snaps can be saved in several ways, such as using a third-party app or taking screenshots of snaps, without detection.

The FTC also alleged that Snapchat misled consumers about how much personal information was collected and the security measures in place to protect such information through its Find Friends feature.  For example, the app transmitted users’ location information and collected data like address book contacts, despite stating that it did not collect such information.  Further, the Commission charged that Snapchat’s failure to secure this feature resulted in a security breach that allowed hackers to compile a database of 4.6 million Snapchat usernames and phone numbers.

According to the New York Times, in response to the announcement the company stated “While we were focused on building, some things didn’t get the attention they could have,” and added: “Even before today’s consent decree was announced, we had resolved most of those concerns over the past year by improving the wording of our privacy policy, app description, and in-app just-in-time notifications. And we continue to invest heavily in security and countermeasures to prevent abuse.”

The settlement prohibits Snapchat from misrepresenting the extent to which it maintains the privacy, security, or confidentiality of users’ information.  Snapchat is also required to implement and maintain a comprehensive privacy program for the next 20 years.  The Commission stated that the settlement with Snapchat is part of the FTC’s ongoing effort to ensure that companies market their apps truthfully and keep their privacy promises to consumers.


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Windows XP End of Life Poses Risks to the Significant Percentage of Companies Still Tied to the Platform

On April 8, Microsoft officially ended all support and ceased providing updates for their Windows XP operating system. This “end of life” (EOL) announcement is not uncommon with software platforms, where continued support of aging software (XP is over 12 1/2 years old) becomes too expensive or too impractical, and the user is thus encouraged to upgrade to a newer version of that software. This all makes sense on the surface. As we’ve seen time and time again, software–especially large, complex pieces of software like operating systems–tends not to age well. Due to the sheer complexity of systems like XP, retrofitting patches to fix errors and vulnerabilities can be quite difficult, and may even lead to unintended consequences (i.e., more bugs). Thus, over time, software companies may urge their customers to migrate to the (relatively) clean slate provided by upgraded versions of their software.

The XP EOL announcement came as no surprise. Microsoft has been urging customers to start planning for upgrades since it terminated all retail sales of the operating system in 2008. But according to recent statistics provided by Net Applications, nearly 28% of Internet users are still running some version of Windows XP. Even worse, this number does not include those computers running XP that aren’t use for web browsing, e.g., servers, point-of-sale (POS) systems, medical systems, industrial systems, security systems, and ATMs. This number includes large organizations such as banks and governments which, due mainly to their size and conservative technology adoption policies, take more time to migrate away from software platforms, especially those that provide core services, such as operating systems. This has led to multi-million dollar agreements between these organizations and Microsoft in order to provide continued support for the short term.

But what about those companies and organizations who don’t necessarily have the wherewithal to negotiate individual support contracts with Microsoft? In addition, these smaller companies too often don’t have the depth of IT support required to keep up with these updates, and some organizations may not even be aware they’re still running XP within their network. For these companies, the fact that Microsoft will no longer be providing public patches for future vulnerabilities could prove to be a serious problem.

The first example of this problem showed up this week. On Monday, a new “zero-day” vulnerability in Microsoft’s Internet Explorer (IE) web browser was announced. This vulnerability is quite serious, as it could allow for remote code execution on a user’s computer, and had already been detected as an attack being used in the wild. Technology news sources were referring to this bug as the first sign of the “XPocalypse,” where users and organizations still running the unsupported platform would be left to the wolves, so to speak.

Yesterday, Microsoft took the unusual step of issuing a patch for this IE vulnerability for all of its platforms, including the “unsupported” Windows XP. While this step may have averted disaster for XP users–at least for the time being–many technology experts are warning that providing retroactive support for EOL platforms will not solve the larger problem of a significant number of users running aging, vulnerable software. This should concern not only the companies still running XP, but the entire Internet ecosystem, since compromised computer systems are often repurposed as platforms for further attacks.

It’s still too early to tell whether any of the dire predictions presented by the so-called XPocalypse will come to pass. Some cynics have pointed out that we are not likely to see a sudden surge of attacks on XP, since XP has been quite vulnerable to attack for some time, even when it was supported. Either way, companies would do well to make software security a priority, from the C-Suite on down. Companies are coming to realize that many (or most) of them are actually in the software business, as so much of their operation depends on the software that sits behind the scenes. There may come a time that the FTC views the unsupported use of XP as failing to take reasonable security measures. Adopting a wait-and-see approach to software security is bound to make a potentially bad situation even worse.


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White House releases Big Data Report

The White House released its report on big data, “Big Data: Seizing Opportunities, Preserving Values,” on Thursday, May 1, 2014, which looks at the ways that businesses and the government are able to perform analytics on massive data sets culled from a wide variety of sources to develop new observations and measurements about individual consumers.   The Report offers findings and recommendations, based on 90 day review of big data and privacy led by White House counselor John Podesta and an executive branch working group, including the Secretaries of Commerce and Energy, the President’s Science and Economic Advisors and other administration officials at the request of President Obama. The working group sought public input from academic researchers, privacy advocates, advertisers, civil rights groups and the public during its review in an effort to evaluate the opportunities and challenges presented by big data.

The Report recognizes the inherent value big data has added to society, citing as examples the ability of big data analysis to enhance and improve medical treatment of premature infants, increase efficiencies across transportation networks and utility providers, and identify fraud and abuse in Medicare and Medicaid reimbursements. However, the Report also acknowledges serious privacy concerns, noting that big data may reveal intimate personal details of an individual user, and that big data tools may lead to discriminatory outcomes, particularly with regard to housing, employment and credit.

The Report offered several policy recommendations:

  • Move forward with the Consumer Bill of Rights.  In 2012, the President announced the concept of a Consumer Bill of Rights, which establishes certain baseline consumer privacy principles such as offering transparency about data privacy and security practices, providing consumers control over data practices, respecting the context in which the data was collected, increasing the accuracy of data files, and providing the opportunity for consumers to access collected data. This Report reiterates the importance of passing legislation to enforce the Bill of Rights principles, but also questions whether the principles are well-suited to the world of big data.  Perhaps, the Report suggests, there should be a greater emphasis placed on how the data is used and reused rather than an emphasis on establishing notice and consent for the initial data collection.
  • Pass National Data Breach Legislation.  The Report notes that the amalgamation of so much information about consumers results in much greater harm to the consumer in the event of a data breach, and finds an even greater need for Congress to pass national data breach legislation to preempt the 47 different state laws currently in effect.
  • Extend privacy protections to non-US persons.  The Report urges government departments and agencies to apply the Privacy Act of 1974 and other privacy protections to all individuals, regardless of nationality.
  • Ensure data collected on students in schools is used for educational purposes.  Acknowledging the growing and valuable use of educational technologies in schools, the Report calls for protections to ensure that student data is not used inappropriately when it is collected in an educational setting.  The Report suggests modernizing COPPA and FERPA to protect student data in the digital age, while still encouraging innovation in the educational technology industry.
  • Expand technical expertise to stop discrimination.  Businesses decisions affecting consumers’ access to healthcare, education, employment, credit and goods and services are increasingly made on the basis of big data algorithms. The Report calls on the DOJ, the FTC, the CFPB and the EEOC to develop their technical expertise to be able to detect whether these automated decision-making processes have discriminatory effects on protected classes of people, and to develop tools to redress such discrimination.
  • Amend the Electronic Communications Privacy Act (ECPA).  The Stored Communications Act, which is part of the ECPA, articulates the rules for obtaining the content of stored communications including email and cloud servers, but was written well before personal computing, email, texting, cloud storage, and smart phones were used as the primary means of communication.  The Report calls on Congress to amend the ECPA to ensure the standards of protection for digital online content is consistent with the protections afforded in the physical world.

While the Report provides a useful overview of the big data phenomenon, its benefits and its challenges, it remains to be seen what impact this Report will have on the industry.  By and large, the Recommendations do not contain wholly new ideas.  The ECPA is widely considered to be antiquated and there have been repeated calls for reform.  There have been many attempts to offer national data breach notification legislation, but no bill has made it through Congress to date.  The White House first offered its support for a Consumer Bill of Rights in 2012, but spent the last 2 years involved in multi-stakeholder meetings without producing draft legislation. This recent Recommendation shows little evidence of advancing the ball significantly on that front, as calls for additional “stakeholder and public comment” before crafting the legislative proposal.  However, the call for greater protections for student data is well-timed, as one of the largest school technology providers, inBloom, was forced to shut down over privacy concerns just a few weeks prior to the Report’s release.

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