Over at Lawfare, I have an essay co-authored by Chris Hoofnagle and Woodrow Hartzog called The FTC Can Rise to the Privacy Challenge, but Not Without Help From Congress. This piece is also posted at the Brooking Institution’s TechTank. The essay begins:
Facebook’s recent settlement with the Federal Trade Commission (FTC) has reignited debate over whether the agency is up to the task of protecting privacy. Many people, including some skeptics of the FTC’s ability to rein in Silicon Valley, lauded the settlement, or at least parts of it.
Others, however, saw the five-billion-dollar fine, oversight reforms, and compliance certification measures as a drop in the bucket compared to Facebook’s profits. Two dissenting FTC commissioners and other critics pointed out that the FTC did not change Facebook’s fundamental business model nor hold Mark Zuckerberg personally liable, despite hints that the company fell out of compliance with its original 2010 FTC consent order soon after that agreement was inked. Some privacy advocates and lawmakers even argued that the limits of the settlement are evidence that the FTC, the leading privacy regulator in the U.S. since the late 1990s, is no longer the right agency to protect our personal information from Big Tech. They support creating a new, consumer privacy-focused federal agency.
We think the FTC is still the right agency to lead the US privacy regulatory effort. In this essay, we explain the FTC’s structural and cultural strengths for this task, and then turn to reforms that could help the FTC rise to modern information privacy challenges. Fundamentally, the FTC has the structure and the legal powers necessary to enforce reasonable privacy rules. But it does need to evolve to meet the challenge of regulating modern information platforms.
You can read the rest of the essay over at Lawfare.
It is sad to say goodbye to Concurring Opinions, a law professor blog I co-founded in 2005. The blog began when a group of us (Dave Hoffman, Kaimi Wenger, Nate Oman, and me) who were blogging at PrawfsBlawg decided we wanted more autonomy in blog governance, so we founded Concurring Opinions. Over the years, we added many great permabloggers: Danielle Citron, Deven Desai, Frank Pasquale, Gerard Magliocca, Ronald K.L. Collins, Larry Cunningham, Naomi Cahn, Sarah Waldeck, Solangel Maldonado, Corey Yung, Jaya Ramji-Nogales, and others.
I have a few final thoughts about Concurring Opinions below, as well as a small piece of good news — I’ve archived most of my posts here on this special archive page. More on the archive later.
Cybersecurity litigation is currently at a crossroads. Courts have struggled in these cases, coming out in wildly inconsistent ways about whether a data breach causes harm. Although the litigation landscape is uncertain, there are some near certainties about cybersecurity generally: There will be many data breaches, and they will be terrible and costly. We thus have seen the rise of cybersecurity insurance to address this emergent and troublesome risk vector.
I am delighted to be interviewing Kimberly Horn, who is the Global Focus Group Leader for Cyber Claims at Beazley. Kim has significant experience in data privacy and cyber security matters, including guiding insureds through immediate and comprehensive responses to data breaches and network intrusions. She also has extensive experience managing class action litigation, regulatory investigations, and PCI negotiations arising out of privacy breaches.
One of the biggest challenges for organizations is locating all the personal data they have. This task must be done, however, to comply with the General Data Protection Regulation (GDPR) and other privacy laws. Moreover, the GDPR and the new California Consumer Privacy Act provide that individuals have rights regarding their data. These rights often require that organizations must keep records of individual privacy preferences regarding their data.
I had the opportunity to interview Dimitri Sirota about these issues. Dimitri is the CEO and co-founder of one of the first enterprise privacy management platforms, BigID, and a privacy and identity expert.
In the period of just a week, California passed a bold new privacy law — the California Consumer Privacy Act of 2018. This law was hurried through the legislative process to avoid a proposed ballot initiative with the same name. The ballot initiative was the creation of Alastair Mactaggart, a real estate developer who spent millions to bring the initiative to the ballot. Mactaggart indicated that he would withdraw the initiative if the legislature were to pass a similar law, and this is what prompted the rush to pass the new Act, as the deadline to withdraw the initiative was looming.
The text of the California Consumer Privacy Act is here. The law becomes effective on January 1, 2020.
There are others who summarize the law extensively, so I will avoid duplicating those efforts. Instead, I will highlight a few aspects of the law that I find to be notable:
(1) The Act creates greater transparency about the personal information businesses collect, use, and share.
(2) The Act provides consumers with a right to opt out of the sale of personal information to third parties and it attempts to restrict penalizing people who exercise this right. Businesses can’t deny goods or services or charge different prices by discounting those who don’t opt out or provide a “different level or quality of goods or services to the consumer.” However, businesses can do these things if they are “reasonably related to the value provided to the consumer by the consumer’s data.” This is a potentially large exception depending upon how it is interpreted.
(3) The Act allows businesses to “offer financial incentives, including payments to consumers as compensation,” for collecting and selling their personal information. Financial incentive practices cannot be “unjust, unreasonable, coercive, or usurious in nature.” I wonder whether this provision will undercut the restriction on offering different pricing or levels of service in exchange for people allowing for the collection and sale of their information. Through some clever adjustments, businesses that were enticing consumers to allow the collection and sale of their personal data through different prices or discounts can now restructure these into “financial incentives.”