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Tuesday, July 25, 2017, 4:08 PM

Does GDPR Apply to You?

Posted by: Bruce Buchanan
By Ted Claypoole


10 Months To Go


The EU’s General Data Protection Regulation goes into effect on May 25, 2018. GDPR replaces the EU Data Protection Directive. GDPR can apply to US-based businesses even if they do not have offices or employees in the EU. It can also reach activities conducted outside the EU.
The Directive did not regulate US businesses unless the collection or processing occurred within the EU (e.g., if a US-based company had a data center in the EU). Now GDPR clearly has stronger extraterritorial reach than its predecessor.

Businesses collecting and using personal data should know their GDPR obligations. Violators of GDPR face steep penalties. Regulators can fine a company up to 20,000,000 euros or 4% of worldwide annual turnover, whichever is higher.

Follow our three-question flowchart to see if GDPR applies to your company.

Thursday, July 6, 2017, 4:18 PM

Canadian Government Suspends Implementation of Private Right of Action Under CASL

Posted by: Bruce Buchanan
By Doug Bonner & Taylor Ey


Our previous alert regarding changes to Canada’s Anti-Spam Legislation (“CASL”) previewed two important changes that were to come into effect as of July 1, 2017:


  • The end of the transition period under CASL, during which companies could rely on implied consent for sending “commercial electronic messages” in certain instances; and
  • A private right of action for violations of CASL
On June 2, 2017, the Government of Canada suspended the implementation of the private right of action provision.  The private right of action will not come into effect unless and until the government takes further action to implement it.  According to its press release on June 7, 2017, the Canadian Government will ask a parliamentary committee to review the private right of action provision, and hopes to strike a balance between consumer protection and legitimate business marketing activity, that is, protecting Canadians from spam while allowing entities such as businesses, charities and non-profits to communicate with Canadians electronically. 


The government’s action does not impact the termination of the transition period, which will become effective on July 1, 2017. 

FCC Slams Serial Robocaller With $120 Million Proposed Fine for "Spoofing" Numbers

Posted by: Bruce Buchanan
By Rebecca Jacobs, Marty Stern & Doug Bonner

We all get them.  Repeated marketing calls to our mobile and home phones with the incoming phone number altered to make it appear that it’s a local call, when in fact, the call is from a robo-scammer using IP technology to “spoof” the phone number.  As it turns out, there’s a federal law that makes such spoofing illegal, the Truth in Caller ID Act of 2009 (“TICIDA”), and in its first enforcement action under TICIDA, the FCC hit an alleged serial robocaller, Adrian Abramovich and his companies (together, Abramovich) with a whopping $120 million Notice of Apparent Liability for allegedly originating nearly 100 million such calls.


The Commission also issued a Citation and Order  to Abramovich for alleged violations of the Telephone Consumer Protection Act (“TCPA”) for making unauthorized prerecorded telemarketing calls to emergency phone lines, wireless phones and residential phones without obtaining the required prior express written consent from the called party.  While TICIDA allows the Commission to directly fine first-time violators through its NAL authority, which it did here, in TCPA FCC enforcement actions involving entities and individuals that do not hold Commission authorizations, the Commission must first issue a citation, and then can only proceed with a fine if the recipient repeats the violation.  That still leaves Abramovich open to potentially monumental TCPA class action exposure.   The Citation and Order also notified Abromovich that he had violated the federal wire fraud statute by transmitting or causing to be transmitted, by means of wire, misleading or false statements with the intent to perpetrate a fraud.


According to the Commission, Abramovich ran a scheme where his spoofed calls appeared to originate from local numbers and offered, via a pre-recorded message, holiday vacations and cruises claiming to be associated with well-known American travel and hospitality companies.  The pre-recorded messages would prompt customers to “press 1” to secure their reservation.  Once a customer pressed “1”, the customer was transferred to a call center where live operators pushed vacation packages typically involving timeshare presentations, that were not affiliated with the well-known brands used in the recorded messages.  The Commission characterized Abramovich’s schemes as “one of the largest – and most dangerous – illegal robocalling campaigns the Commission has ever investigated.”  According to the Commission, in addition to defrauding consumers, the robocalling campaign also caused disruptions to an emergency medical paging service, which provides paging services for emergency room doctors, nurses, emergency medical technicians, and other first responders.


While significant in absolute terms, the $120 million proposed fine, according to the Commission, was significantly below the penalty that could have been proposed in the NAL.   Rather than fine the statutory maximum of $11,052 for each spoofing violation, or three times that amount for each day of a continuing violation, the Commission calculated the base forfeiture amount at $1,000 per unlawful spoofed call, since this was the first time the Commission used its TICIDA forfeiture authority.


Mr. Abromovitz now has an opportunity to respond to both the NAL and Citation.  Stopping illegal robocalling has been a key priority for Chairman Pai, and no doubt the Commission is expecting that the threat of huge monetary forfeiture penalties against the industry will provide a powerful incentive for roboscammers to look for other ways to make a buck.  Given the Commission’s struggle with fashioning tools to go after serial robocallers that do not have the effect of increasing TCPA exposure for established companies engaging in legitimate customer communications, we do not expect the Commission to back down from its proposed penalty, and expect this to be the start of a new enforcement initiative using TICIDA and its direct penalty provisions.

Monday, July 3, 2017, 5:57 PM

Second Circuit: You Agreed to be Called When They Loaned You the Money, So Now Live With It

Posted by: Rebecca Jacobs
By: Rebecca Jacobs, Marty Stern and Doug Bonner


In a case of first impression, the Second Circuit recently ruled that the TCPA does not permit a consumer to unilaterally revoke bargained-for consent to be contacted by autodialer and pre-recorded voice calls on a mobile number provided in an auto lease agreement. The court found that such bargained-for consent, was outside the scope of the FCC’s 2015 TCPA Declaratory Ruling, which required that consent can be revoked at any time by any reasonable means, finding that the ruling only applies to "gratuitous" consent provided by the consumer, not consent that is part of a bargained-for agreement. Click here to read the full alert.

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Wednesday, June 28, 2017, 10:06 AM

Nadia Aram Examines Updates to COPPA Guidance, New Developments in Children’s Privacy Law

Posted by: Bruce Buchanan

Many of today’s toys contain Internet-connected technology alongside of molded plastic and foam stuffing.  But while Internet-connected toys may increase the fun for kids, they create additional privacy risks for businesses.

With that in mind, the Federal Trade Commission just updated its guidance for complying with the Children’s Online Privacy Protection Act (COPPA). Womble Carlyle attorney Nadia Aram has written a client alert on the COPPA changes. Read the full alert at this link.


Monday, May 15, 2017, 3:17 PM

Important Steps to Prepare for the WannaCry Ransomware Attack

Posted by: Bruce Buchanan
By Ted Claypoole, Allen O'Rourke & Claire Rauscher


Your business may have been victim to the latest ransomware attack, or it may be caught in the next wave. Womble Carlyle can help manage the attack and can prepare you to beat the next one.


On May 12, 2017, the “WannaCry” ransomware attack compromised over 70,000 organizations in nearly 100 countries. The attack encrypted people’s computer files – making them inaccessible – and demanded a ransom of about $300 worth of Bitcoin to release them. The malicious software exploited a known vulnerability in Windows that Microsoft had patched two months ago. Microsoft has also issued emergency patches for unsupported, outdated versions of Windows.




If your organization runs Windows, it is important to make sure that all appropriate patches have been installed. Another important step is to create backups of your computer files that can be used in the event that your system becomes encrypted by ransomware.


Finally, if you do not have one already, this would be a good time to develop a cybersecurity incident response plan.




Womble Carlyle’s Cyber & Privacy Law attorneys are poised to help clients develop such incident response plans, implement cybersecurity preparedness measures, and respond to any incidents that may occur.



Tuesday, April 25, 2017, 4:41 PM

Reading the Tea Leaves: What Lies Ahead for Broadband Privacy Regulation?

Posted by: Rebecca Jacobs

On April 3, 2017, President Trump signed into law a rare Joint Resolution of Congress under the Congressional Review Act (“CRA”), which disapproved the Broadband Privacy Rules adopted late last year by then-Chairman Wheeler’s Democratic-led Federal Communication Commission (“FCC”), making final the rollback of the controversial rules adopted during the last months of the Obama Administration.  Beyond nullifying the rules themselves, the Congressional disapproval provides little clarity and leaves many questions unanswered regarding the privacy framework that will remain applicable to providers of Broadband Internet Access Services, and with numerous moving parts still in play, the question of who will regulate those privacy practices and under what rubric, is very much an open question.
The FCC’s Broadband Privacy Order (the “Order”), which we discussed in detail following its release in October, applied a sweeping new privacy framework to be administered by the FCC upon not only traditional  telecommunications carriers and interconnected VoIP providers offering voice services, which had been subject to the Commission’s former Customer Proprietary Network Information (“CNPI”) rules, but also upon providers of Broadband Internet Access Services (“BIAS”), which the Commission previously had found were common carrier services under its 2015 Open Internet Order.  The reclassification, the Commission concluded, subjected BIAS providers to Section 222 of the Communications Act, a provision that prior to the Wheeler FCC, had been focused almost exclusively on the use of CPNI by voice providers, but in which the Commission now found far broader authority to more generally regulate the privacy and cybersecurity practices of broadband Internet access providers.
The Order implemented new protections for CPNI, and added specific protections for personally identifiable information (“PII”) and the content of communications under a provision of Section 222 which the Wheeler Commission found imposes an independent duty on carriers to protect the confidentiality of customer proprietary information, beyond Section 222’s CPNI requirements.  Web browsing and mobile application usage history were designated sensitive customer proprietary information (“customer PI”) subject to heightened protection, including customer opt-in for use of the data for third party marketing purposes, beyond what the Federal Trade Commission (“FTC”) has concluded is customer PI.  In addition to those new protections, the Order also eliminated certain CPNI regulations for common carriers, such as the annual CPNI certification and record-keeping requirements. 
It is clear that enactment of the CRA resolution means that these new broadband privacy rules will no longer be effective, and any aspects of the rules that had not yet become effective will never become so.  Congress’s CRA rejection of the broadband privacy rules also has continuing effect: it bars the FCC from reissuing any substantially similar new rules as the broadband privacy rules that Congress has disapproved, absent new Congressional authorization.  Less clear is the extent to which broadband providers will remain subject to Section 222 in the absence of implementing rules.  The Wheeler Enforcement Bureau had used Section 222 to bring several high profile and controversial enforcement actions against carriers for alleged data breaches when no specific rules were in place, and shortly after adoption of the Open Internet Order released an Enforcement Advisory on broadband provider privacy practices under Section 222, pending adoption of formal rules.  Both actions suggest that Section 222 could remain a residual source of authority for the FCC to regulate BIAS privacy practices, even in the absence of specific rules.

It is virtually certain, however, given prior statements by Chairman Pai and Commissioner O’Rielly critical of Chairman Wheeler’s expansive view of the FCC’s Section 222 authority, that the current FCC Republican majority will avoid allowing the FCC to replace the FTC as a general regulator of all personal data handled by broadband providers.  Moreover, there is significant question as to whether the new FCC, under Chairman Pai, has any intention of bringing enforcement actions against broadband provider privacy practices under Section 222, to which, as a Commissioner during the Wheeler regime, Chairman Pai vociferously objected.

While Section 222 continues to apply (at least in theory) to broadband providers, since they remain currently regulated under Title II, the absence of implementing regulations makes ongoing regulatory obligations of broadband providers unclear.  For the time being, enforcement of broadband privacy protections of consumers will have limited and unclear authority and virtually no clear boundaries.   FCC enforcement activities, if any, will likely be limited to literal CPNI violations, as statutorily defined under Section 222(c), with the Republican-led FCC refusing to enforce any breaches of data security under Section 222(a), as the FCC had done in high profile Enforcement Bureau actions brought under Chairman Wheeler.

The elephant in the room, however, is that if the current FCC leadership does decline to police broadband privacy practices under Section 222 – either because Section 222 does not provide such authority (particularly after the CRA rejection of the FCC’s broadband privacy rules) or simply as a discretionary matter it declines to apply what authority it does have – then the privacy practices of broadband providers, at least at present, will be subject to no federal oversight.  This is because post-reclassification, broadband Internet access services are outside the scope of the FTC’s unfair and deceptive practices oversight authority, under the communications common carrier exemption to Section 5 of the FTC Act.  To further complicate matters, the FCC’s reclassification of broadband Internet access services as a common carrier service, while initially sustained by the D.C. Circuit, remains unsettled, pending resolution of petitions for an en banc rehearing of the DC Circuit order, and any subsequent petitions for certiorari to, or review by, the Supreme Court.  Moreover, a decision en banc overturning the broadband common carrier classification would only clarify matters for providers that are not otherwise providers of common carrier services, such as some cable operators and stand-alone providers of mass market high-speed Internet access services.  These providers would, once again, become subject to the FTC’s Section 5 jurisdiction.

But for wireless carriers and phone companies that provide broadband services, even if broadband Internet access services are reclassified as a non-common carrier offering, the FTC’s hands will continue to be tied with regard to common carriers.  This is because its jurisdiction to regulate common carriers for even non-common carrier activities remains in question pending resolution of the 9th Circuit’s ruling in FTC v. AT&T Mobility LLC that the common carrier exemption in Section 5 of the FTC Act is a status-based exemption barring any FTC oversight of common carriers.  The FTC has a pending petition for rehearing en banc of the 9th Circuit decision.

Regardless, the talk in Washington is of ways to fill this regulatory void.  Acting FTC Chairman Ohlhausen has urged Congress to give back the FTC’s power to actively police broadband providers’ privacy practices by rescinding the reclassification of broadband Internet access or lifting the FTC’s common carrier exemption.   Moreover, a group of Democratic Senators, led by Senator Markey (D-Mass.) recently introduced a bill that would give the FCC explicit authority to adopt broadband privacy and cybersecurity regulations.  In addition, Senator Blumenthal (D-Conn.) separately introduced a bill, the pointedly named “Managing Your Data Against Telecom Abuses (MY DATA) Act,” to restore FTC jurisdiction over broadband provider privacy practices.  So far, however, there is no indication of bipartisan support to fill the gap, and, in the absence of Republican support, the odds are long that either of these measures will pass in a Republican-controlled Congress, or be signed into law by President Trump.  At the same time, according to a recent report of the National Council of State Legislatures, states may be stepping in to fill the gap:  at least 12 states are considering legislation to adopt broadband privacy protections for consumers following the CRA disapproval of the FCC’s broadband privacy rules  and in the absence of clarification at the federal level, state broadband privacy regimes may take on increased significance as the only game in town.
For those keeping score, the CRA is obviously a big win for broadband providers (Verizon, AT&T, and other large broadband providers, especially those with edge provider affiliates), which argued strongly that such privacy rules should be adopted uniformly across the Internet ecosystem, not advantaging one set of providers (edge providers) over another (broadband providers), by imposing opt-in requirements for use of consumer PI for digital advertising for some but not for others.  These providers are now free from the FCC’s broadband privacy regulations and, at least in the short term, from FTC regulation until the FTC common carrier exemption is conclusively addressed by the courts or Congress.  On the other hand, the CRA may be considered something of a loss for the leading edge providers such as Google and Amazon, since the decision will likely mean more formidable competition from broadband providers for a piece of the profitable online advertising revenue pie.

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