Discerning Data

DOJ Settlement with Netcracker Technology Corporation Highlights Cybersecurity and Export Control Best Practices for Government Contractors and Information Technology Companies

This week the U.S. Department of Justice (DOJ) and Netcracker Technology Corporation (NTC) announced that they had settled charges that NTC had violated U.S. controls on foreign access to sensitive data. The settlement underscores many of the export control and related compliance risks surrounding the provision and use of cloud computing services and global networks. At the same time, the Enhanced Security Plan issued by NTC and DOJ as part of the settlement provides a helpful set of benchmarks and best practices for companies that may be considering the use of cloud services and network infrastructure to house and transmit their most sensitive data.

According to DOJ’s settlement announcement, NTC had worked as a subcontractor on two federal government contracts with the Defense Information Systems Agency (DISA), a combat support agency of the U.S. Department of Defense (DoD), and performed some product support work from locations outside the United States, including Russia. DOJ alleged that by failing to maintain adequate controls on the cloud and network infrastructure supporting these contracts, NTC had threatened the security of sensitive data about individuals, DoD projects, networks and critical U.S. domestic communications infrastructure. DOJ further asserted that uncleared NTC foreign national employees in Russia and Ukraine worked on the DISA projects and were aware of the sensitive nature of the projects and the data stored and transmitted through the network managed by DISA.

Continue reading “DOJ Settlement with Netcracker Technology Corporation Highlights Cybersecurity and Export Control Best Practices for Government Contractors and Information Technology Companies”

NAIC Adopts Insurance Data Security Model Law

The National Association of Insurance Commissioners (NAIC) adopted the Insurance Data Security Model Law (“Model Law”) in October 2017. The purpose of the Model Law is to establish standards for data security and the investigation of and notification to the Insurance Commissioner of a Cybersecurity Event[1], but is not intended to create a private right of action.

The Model Law is based largely on the New York Department of Financial Services’ Cybersecurity Regulations, 23 NYCRR 500 (“NYDFS Cyber Regulations”), which took effect on March 1, 2017. [2] In fact, a drafting note to the Model Law indicates that compliance with the NYDFS Cyber Regulations is intended to constitute compliance with the Model Law.

Continue reading “NAIC Adopts Insurance Data Security Model Law”

Protecting Students’ Online Privacy: An FTC & ED Joint Workshop on EdTech

On Friday, December 1, the Federal Trade Commission and the Department of Education hosted a workshop examining student privacy in the burgeoning field of “EdTech.” Both agencies regulate certain educational technology aimed at K-12 students. However, FTC rules implementing the Children’s Online Privacy Protection Act (“COPPA”) are not identical to ED regulations implementing the Family Educational Rights and Privacy Act (“FERPA”). To better understand how both rules interact in practice, the agencies solicited public comment and convened panels of experts and stakeholders – including vendors, schools, parents, and regulators.

The workshop explored several key issues, including when a school may provide consent on behalf of participating students; how record retention (and deletion) should be noticed and executed; and what limits to impose on vendors collecting personal student information. In closing, both agencies expressed a desire to provide clear, workable regulatory oversight while meaningfully protecting student privacy.

Continue reading “Protecting Students’ Online Privacy: An FTC & ED Joint Workshop on EdTech”

Another State-Lead Data Breach Action Results in High Fines and Strict Compliance Requirements

Massachusetts Attorney General Maura Healey and Multi-State Billing Services (MSB), a Medicaid billing company that provided processing services for 13 public schools, signed a no-fault consent judgment settling a 2014 data breach resulting from a stolen laptop that put 2,618 children at risk for identity theft and fraud. The MSB laptop contained unencrypted personal information, including names, social security numbers, Medicaid identification numbers and birth dates.

The settlement requires MSB to pay $100,000 and implement improved security practices after an investigation by the attorney general’s office determined it violated state consumer protection and data security laws. More specifically, the judgment requires MSB to continue to develop, implement and maintain a written and comprehensive information security program and review and update its existing policies and procedures for compliance with data security laws. It must also train its staff on how to protect personal information and regularly report on its compliance with such requirements to the state attorney general’s office.

Continue reading “Another State-Lead Data Breach Action Results in High Fines and Strict Compliance Requirements”

Smartwatch News: Privacy Edition

As smartwatches gain in popularity, innovative uses for the wearable technology, along with privacy concerns, continue to pop up. In this roundup, we look at a new app that can help in atrial fibrillation studies and privacy concerns regarding smartwatches for children.

New app identifies irregular heartbeats for medical study

Apple recently launched the Apple Heart Study App, described as a “first-of-its-kind research study using Apple Watch’s heart rate sensor to collect data on irregular heart rhythms and notify users who may be experiencing atrial fibrillation.” Atrial fibrillation is a leading cause of stroke and other heart conditions.

Apple Watch users will be able to enroll in a joint study with Stanford University School of Medicine, which will use the device’s heart rate monitor to check for an irregular heart rate. If an irregular heart rhythm is identified, the participant will receive a notification on his Apple Watch and iPhone, a free consultation with a study doctor, and an electrocardiogram patch for additional monitoring. This is the first study that Apple itself is sponsoring. Apple will run the study and submit data to the U.S. Food and Drug Administration for approval as a regulated software.

Continue reading “Smartwatch News: Privacy Edition”