The FTC has entered into a settlement with LightYear Dealer Technologies, doing business as DealerBuilt, a technology company that develops and sells dealer management system (DMS) software and data processing services to automotive dealerships nationwide. The settlement resolves allegations that DealerBuilt engaged in a number of unreasonable data security practices. The DealerBuilt’s DMS software tracks, manages, and stores information related to all aspects of a dealership’s business, including sales, finance, inventory, accounting, payroll, and parts and service and collects and maintains personal and competitively sensitive information about consumers and employees.
Touchstone Medical Imaging (Touchstone) and the Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) entered into a no-fault settlement and two-year corrective action plan (CAP) to settle potential violations of the Health Insurance Portability and Accountability Act (HIPAA).
Two of the Federal Trade Commission’s (FTC’s) most recent data security settlements include new requirements that go beyond previous data security settlements. The new provisions (1) require that a senior corporate officer provide to the FTC annual certifications of compliance and (2) specifically prohibit making misrepresentations to the third parties conducting required assessments. A statement accompanying these settlements noted that the FTC has instructed staff to examine whether its privacy and data security orders could be strengthened and improved.
When people talk about data privacy, or data collection, or tracking technology, or analytics, or click farms, or bots, or data brokers, or geolocation, or mobile apps, or social media, or influencers, in the end what they’re really talking about is digital advertising. Yet while we may feel comfortable using the phrase to broadly describe any online marketing efforts, the purpose of digital advertising is quite different from the goal of a 30 second radio spot, and shares little with its Mad Men-era ancestors beyond the name.
But today, faced with a variety of new laws and regulations designed to protect consumer privacy, lawyers and their clients are obliged to take a much deeper and more nuanced dive into modern methods of digital advertising. And many are surprised at what they find.
According to recent disclosures, the Trump Administration has been acting aggressively to control Chinese investment in companies that have access to Americans’ personal data. Last week, it was revealed that the Committee on Foreign Investment in the United States (CFIUS) has ordered Chinese company Beijing Kunlun Tech Co. Ltd. to sell its majority stake in on-line dating app Grindr over concerns that Chinese access to personal data held by Grindr could pose a threat to U.S. national security. Then, on April 4, 2019, it was announced that CFIUS had also ordered Chinese investor and digital healthcare company iCarbonX to sell its stake in the U.S. company PatientsLikeMe. PatientsLikeMe is an on-line service that links individuals suffering the same health issues in an effort to improve disease detection and treatment. Again, the concern reportedly prompting the CFIUS action is Chinese access to the personal data of Americans and the national security risk that could pose.
In an active week of FTC announcements, the agency on March 26, 2019, announced four major settlements with entities that were responsible for billions of illegal robocalls made to consumers nationwide. The entities targeted by the agency initiated illegal robocalls across a number of industries – they pitched auto warranties, debt-relief services, home security systems, fake charities, and Google search results services. These settlements resolved FTC allegations that the defendants had violated the FTC Act and the FTC’s Telemarketing Sales Rule.
In Veterans of America, the FTC’s complaint against Travis Deloy Peterson alleged that he “created and used a series of corporate entities and fictitious business names that sound like veterans’ charities to operate a telemarketing scheme that used robocalls to trick generous Americans into giving their vehicles or other valuable property to him” since at least 2012. The settlement includes a monetary judgment of $541,032.10 and would permanently ban defendant Peterson or his employees or contractors from soliciting charitable contributions, making misrepresentation in advertising or promoting any good or service, initiating robocalls, and engaging in deceptive and abusive telemarketing.