PRIVACY + SECURITY BLOG

News, Developments, and Insights

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Risk and Anxiety: A Theory of Data Breach Harms

Risk and Anxiety Theory of Data Breach Harms

My new article was just published: Risk and Anxiety: A Theory of Data Breach Harms,  96 Texas Law Review 737 (2018).  I co-authored the piece with Professor Danielle Keats Citron.  We argue that the issue of harm needs a serious rethinking. Courts are too quick to conclude that data breaches don’t create harm.  There are two key dimensions to data breach harm — risk and anxiety — both of which have been an area of struggle for courts.

Many courts find that anything involving risk is too difficult to measure and not concrete enough to constitute actual injury. Yet, outside of the world of the judiciary, other fields and industries have recognized risk as something concrete. Today, risk is readily quantified, addressed, and factored into countless decisions of great importance. As we note in the article: “Ironically, the very companies being sued for data breaches make high-stakes decisions about cyber security based upon an analysis of risk.” Despite the challenges of addressing risk, courts in other areas of law have done just that. These bodies of law are oddly ignored in data breach cases.

When it comes to anxiety — the emotional distress people might feel based upon a breach — courts often quickly dismiss it by noting that emotional distress alone is too vague and unsupportable in proof to be recognized as harm. Yet in other areas of law, emotional distress alone is sufficient to establish harm. In many cases, this fact is so well-settled that harm is rarely an issue in dispute.

We aim to provide greater coherence to this troubled body of law.   We work our way through a series of examples — various types of data breach — and discuss whether harm should be recognized. We don’t think harm should be recognized in all instances, but there are many situations where we would find harm where the majority of courts today would not.

The article can be downloaded for free on SSRN.

Here’s the abstract:

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The Funniest Hacker Stock Photos 4.0: The Future of Hacking

robot hacker working with computer notebook

It’s time for another installment of the funniest hacker stock photos.  Because I create information security awareness training (and HIPAA security training too), I’m always in the hunt for hacker photos.

For this round, I focus on the future of hacking, so I looked closely for hacker stock photos that depicted the most state-of-the-art hacking techniques as well as a glimpse into the future.

If you’re interested in the previous posts in this series see:
The Funniest Hacker Stock Photos 3.0
The Funniest Hacker Stock Photos 2.0
The Funniest Hacker Stock Photos 1.0

Here are this year’s pictures.  Enjoy!

 

Hacker Stock Photo #1

Hacker

This guy might be one of the creepiest hackers I’ve ever seen.

And, he’s part of a new Las Vegas musical act called “Hacker Man Group”

Hacker

 

Hacker Stock Photo #2

Hacker

I am quite confused about why this hacker needs a magnifying glass if he’s wearing a virtual reality headset.   How does he even see the magnifying glass?  I guess this is a twist on The Matrix, as he appears to have the powers to warp time and space.

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Cartoon: GDPR Right to Be Forgotten

Cartoon GDPR Right to Be Forgotten - TeachPrivacy GDPR Training

The GDPR Article 17 provides for a right to erasure — commonly known as the “right to be forgotten.”  Data subjects may request that an organization erase their personal data “without undue delay” under a number of circumstances.  These circumstances include when the data is no longer relevant to the purposes of collection, when consent is withdrawn and there is no other legal ground for processing, or when the data has been unlawfully processed, among other things.

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FTC v. AT&T Mobility

FTC v. ATT Mobility

In a very important decision, FTC v. AT&T Mobility (9th Cir. 2018 en banc),  the U.S. Court of Appeals for the 9th Circuit en banc reversed an earlier panel decision that severely limited the FTC’s jurisdiction to protect privacy and data security.  I strongly criticized the panel decision in an previous blog post.

The FTC has taken the lead role in protecting privacy and data security through the FTC Act Section 5, 15 U.S.C. § 45, which prohibits “unfair or deceptive acts” affecting commerce.  Section 5(a)(2) contains a list of industries that are carved out from FTC jurisdiction. This list includes banks, airlines, and common carriers.  A “common carrier” is defined in the Communications Act of 1934, 47 U.S.C. § 153: “The term ‘common carrier’ or ‘carrier’ means any person engaged as a common carrier for hire, in interstate or foreign communication by wire or radio or interstate or foreign radio transmission of energy.”  Common carriers are regulated by the Federal Communications Commission (FCC).

In FTC v. AT&T Mobility the FTC brought a Section 5 enforcement action against AT&T for a part of AT&T’s business that was not regulated by the FCC.  However, the 9th Circuit panel concluded that the common carrier exception to FTC jurisdiction was status-based — it applied to common carriers no matter what activities they were engaged in.  This means that if a company engages in a non-minor amount of common carrier activities, then everything that it does, including many activities beyond its functions as a common carrier, fall outside the FTC’s power to regulate under Section 5.  Because these are non-common-carrier activities, the FCC often can’t regulate them either.  This opens up an odd no man’s land where a company can engage in certain activities and escape regulatory enforcement while other companies engaging in the same activities cannot.

Here’s what I wrote about why the earlier 9th Circuit panel decision was problematic:

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The International Privacy+Security Forum

International Privacy+Security Forum

The International Privacy+Security Forum (February 26-27, 2018 in Washington DC) is next week.

The International Forum is a new annual sister event to the Privacy+Security Forum, an annual event held in October at George Washington University in Washington, DC.  The regular Privacy+Security Forum will be in its 4th year in 2018.  This past year, we had 800 participants.

Paul Schwartz and I created the International Forum to recognize the profound importance of international privacy and security law, not just abroad, but here in the United States.

We have 100 speakers and 30+ sessions.

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Cartoon: GDPR’s Scope

Cartoon GDPR Scope

I turned my short GDPR vignette about GDPR’s territorial scope into a cartoon.  The GDPR applies not just to all EU organizations that process personal data.  The GDPR also applies to non-EU established organizations that offer goods and services to EU citizens or that monitor behavior within the EU.

The GDPR thus has quite a long arm in its reach.  Any organization, even those with no physical presence in the EU, can fall under the scope of the GDPR.

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Data Security Is Worsening: 2017 Was the Worst Year Yet

Every year, we hear about how climate change is worsening. It seems the same story is happening with data security. Last year was the worst year in recorded data breach history. More than 5,200 breaches were reported in 2017, with more than 7.8 billion records compromised. By comparison, there are 7.6 billion people on Earth, so 2017 saw the number of records compromised surpass the total world population. Previously, 2016 was the record-holder with 6.3 billion records compromised. Are there any records left that haven’t been compromised?

Major breaches and security incidents included the enormous Equifax breach of 145 million records, the Uber breach, and the NSA leaked tools, which spawned WannaCry and other niceties. Click here for a collection of summaries of some of the more notable breaches of 2017.

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Chart of FTC Commissioners and Chairpersons 1915-2018

The FTC released the above chart showing the history of Commissioners, Chairwomen and Chairman of the FTC from 1915 through the present day. According to the chart, The Federal Trade Commission is composed of five Commissioners, and their terms extend for seven years. The Commissioners are appointed by the President with the advice and consent of the Senate. At any given time, not more than three Commissioners may be members of the same political party. The President designates one Commissioner as Chairman, and the Chairman is given the responsibility for the administration of the Commission.

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HIPAA Enforcement Case – Filefax

HIPAA Enforcement

This week the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) announced an agreement to settle HIPAA violations with Filefax, located in Northbrook, Illinois. One aspect was different than their usual settlement process in that Filefax closed the business down during the OCR investigation and was no longer operating when the settlement was reached. OCR announced that Filefax could not avoid their obligations under HIPAA even though they were no longer running the company. The receiver that is liquidating the company’s assets agreed to pay $100,000 to settle the potential HIPAA violations made by the company while open.

Their HIPAA violations stemmed from an anonymous complaint stating that the medical records of approximately 2,150 patients, which contained protected health information (PHI), received by Filefax had been taken to a shredding/recycling facility and sold. The OCR investigation found over a period of several weeks the PHI had been left unsecured outside Filefox and had been removed from the facility by an unauthorized person.

The press release can be viewed here.  The Resolution Agreement can be viewed here.

Also of Interest

HIPAA Enforcement Guide

HIPAA Enforcement 2017: Another Big Year for HIPAA Enforcement

Why Is HIPAA Data Breach Enforcement Increasing? An Insurer’s View from Katherine Keefe

Lessons from 2016, the Biggest HIPAA Enforcement Year on Record

Is HIPAA Enforcement Too Lax?

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GDPR Cartoon: Lawful Processing

Cartoon GDPR Lawful Processing

This cartoon focuses on the lawful processing requirement.  Under the EU’s General Data Protection Regulation G(DPR), the collection and processing of personal data must be for “specified, explicit and legitimate purposes.”   This is in contrast to the United States where the processing of personal information is permitted unless a law forbids it.

Under the GDPR, data processing must be “lawful” – it must be justified by a legitimate purpose in order to be permissible.  Article 6 of the GDPR sets forth the grounds for the lawfulness of processing personal data.  These grounds include the consent of the data subject, when processing is necessary to perform a contract where the data subject is a party, when processing is necessary to comply with a legal obligation, when processing is necessary to protect a person’s vital interests, or when processing is necessary to perform a task carried out in the public interest.  The final ground for lawful processing is when processing is necessary for the “legitimate interests” of a data controller or third party.

It is far from clear that there are legitimate interests in the cartoon above.  Organizations often think that “legitimate interests” mean any interests that are important to their business, but that’s not the case.  This ground for lawful processing is much narrower.  And, legitimate interests must not be overridden by the data subject’s interests or rights.

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