Category: Consumer Issues, Privacy & Data Security

1
FTC Continues to Flex Its Enforcement Muscle With Regard to Social Media Promotional Activity
2
Court Dismisses Appeal Against FCC’s Net Neutrality Rules
3
Doing Business in Mexico? It’s Time to Revise Your Privacy Practices
4
High Court to AT&T: Don’t Take It Personally, But You Have No “Personal Privacy”
5
States Support Additional Federal Consumer Information Privacy Protections
6
The FCC’s Net Neutrality Order: Substance and Status for Mobile Wireless Broadband
7
K&L Gates Global Government Solutions Report Includes Articles on Key TMT, Privacy and Patent Developments
8
Wittow authors new article on Cloud Computing
9
FTC Proposes Broad New Privacy Framework, and Asks “How It Might Apply in the Real World”
10
New Disability Access Requirements for Advanced Communications and Video

FTC Continues to Flex Its Enforcement Muscle With Regard to Social Media Promotional Activity

by Ann M. Begley, Lawrence C. Lanpher and Carolina M. Heavner

The Federal Trade Commission’s (“FTC”) recent action against a company and its owner in connection with the allegedly deceptive promotion of music teaching tools signals FTC’s continued intention to keep social media promotional activity as an enforcement priority. In its third public investigation and second enforcement action since issuing its revised Guides Concerning the Use of Endorsements and Testimonials in Advertising[1] (hereafter, FTC Endorsement/Testimonial Guides) in December 2009, FTC continues to expand advertisers’ responsibility to monitor third party interactive media communications containing endorsements of advertisers’ products.

In finding the advertiser and its owner, an individual, responsible for assuring that endorsers adequately disclose any material connections with the advertiser, FTC states that an advertiser agreement that requires endorsers to comply with FTC guidelines and disclosures is insufficient in the absence of an advertiser monitoring program that ensures clear and prominent disclosure of the relationship with the advertiser.[2]

Thus, in addition to a $250,000 penalty against the company and its owner, FTC has required a far-reaching monitoring program – a potentially expensive and burdensome commitment for the future.

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Court Dismisses Appeal Against FCC’s Net Neutrality Rules

Today the FCC prevailed in the continuing skirmish over Net Neutrality in Washington. The U.S. Court of Appeals for the District of Columbia dismissed the lawsuits filed last January by Verizon and Metro PCS seeking to overturn the FCC’s Net Neutrality order adopted in December. The court found that the two wireless carriers filed their challenges too early and should have waited until the Net Neutrality order was published in the Federal Register. Both wireless carriers have indicated they will re-file their appeals.

Doing Business in Mexico? It’s Time to Revise Your Privacy Practices

By Holly K. Towle, Henry L. Judy, Samuel R. Castic

On July 6, 2010, Mexico’s “Law on the Protection of Personal Data Held by Private Parties” took effect, and some of the most stringent requirements are currently scheduled to take effect in July 2011.  Accordingly, the time for companies that are covered by the law to adjust their privacy policies and business practices is today, not mañana.[1]   In many ways, this law is more robust than approaches taken to data protection in the United States.  It brings Mexican privacy law far closer to, or goes beyond, the concepts and structure of the European Data Protection Directive (“EU Directive”)[2] or other approaches such as the Canadian Personal Information Protection and Electronic Documents Act.[3]   The law also seems to approximate the European Union approach of treating data protection as a basic right.[4]   This Alert discusses some of the key provisions of Mexico’s new law.

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High Court to AT&T: Don’t Take It Personally, But You Have No “Personal Privacy”

By Bruce Nielson.

The U.S. Supreme Court recently held that AT&T and other corporations do not have “personal privacy” for purposes of an exemption from the information disclosure requirements of the Freedom of Information Act (“FOIA”). In its unanimous opinion in FCC v. AT&T Inc., the court rejected “the argument that because ‘person’ is defined for purposes of FOIA to include a corporation, the phrase ‘personal privacy’ in [FOIA] Exemption 7(C) reaches corporations.” The court held: “The protection in FOIA against disclosure of law enforcement information on the ground that it would constitute an unwarranted invasion of personal privacy does not extend to corporations.”

The AT&T case arose in connection with an FCC investigation into whether AT&T overcharged the government for services rendered in connection with an FCC-administered program designed to enhance access to information and telecommunications services by schools and libraries. During the investigation, AT&T provided documents to the FCC that included information about employees involved in the program and invoices and emails with pricing and billing information. The FCC and AT&T resolved the matter in 2004.

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States Support Additional Federal Consumer Information Privacy Protections

By Bruce Nielson and Samuel Castic

Fifteen state attorneys general recently sent a letter to the FTC supporting its recent proposal for a federal regulatory framework to protect the privacy and security of consumer information. The letter also recommends additional consumer information privacy and security protections that go beyond the FTC’s proposal. The FTC’s proposal, in the form of a preliminary FTC Staff Report entitled “Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers” (the “Report”) was released on December 1, 2010 and is described in more detail in a prior blog entry.

The 15 state attorneys general – from Arizona, Illinois, Indiana, Iowa, Massachusetts, Montana, Nevada, New Mexico, New York, North Dakota, Rhode Island, Tennessee, Vermont, Virginia and Washington (the “States”) – make the following points in their February 18, 2011 letter to the FTC:

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The FCC’s Net Neutrality Order: Substance and Status for Mobile Wireless Broadband

On December 21, 2010, a divided Federal Communications Commission adopted its long-awaited, but highly controversial, Preserving the Open Internet order (“Order”), which requires broadband service providers to treat all web traffic equally and protect open access to the Internet for web consumers and other stakeholders. While Congressional and industry opposition continues to ferment, a closer look at the Order reveals that mobile wireless broadband providers will retain considerable flexibility in how they manage their networks when compared to their fixed provider counterparts.

The Order focused on three primary goals underpinning the Commission’s net neutrality policy: 1) transparency 2) no blocking and 3) no unreasonable discrimination. For “transparency,” both fixed and mobile providers must publicly disclose the network management practices, performance, and commercial terms of their broadband services. By contrast, the application of the “no blocking” condition differs depending on the type of provider. Fixed providers are subject to a broad obligation to not block lawful content, applications, services, or non-harmful devices. Mobile wireless providers are subject to a narrower obligation to not block lawful websites and applications that compete with the provider’s voice or video telephony services. Most importantly, the Order’s “no unreasonable discrimination” provision applies solely to fixed providers, leaving mobile operators free to favor or disfavor certain types of network traffic. According to the Commission, these new rules for mobile wireless providers will not harm customers because most consumers have more choices for mobile wireless service than for fixed broadband. The Commission also noted favorably the mobile industry’s recent moves towards openness, including the introduction of open operating systems like Android. As a result, when the rules finally go into effect, mobile wireless broadband providers will be exempt from the obligation to manage network traffic in a nondiscriminatory manner.

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K&L Gates Global Government Solutions Report Includes Articles on Key TMT, Privacy and Patent Developments

K&L Gates recently published its Global Government Solutions 2011 Annual Outlook, which contains articles from around the firm on key governmental developments expected in 2011.

The Annual Outlook includes an article addressing developments affecting the Telecom, Media and Technology sector in 2011 by DC partners Marc Martin and Marty Stern, noting that the TMT sector enters 2011 with significant regulatory uncertainty and the FCC facing an uphill battle on many signature regulatory initiatives.

The article reviews the FCC’s net neutrality order and the challenges it faces in court and on Capitol Hill, discusses the recent FCC and Department of Justice approvals of the Comcast/NBCU transaction, and a number of additional issues getting significant focus in 2011. These include retransmission consent battles between broadcasters and cable/DBS providers and the FCC’s expected rulemaking proceeding on this issue, the Commission’s implementation of new communications accessibility requirements under the new 21st Century Communications and Video Accessibility Act, and continued efforts to reform the Universal Service Fund and make it broadband-centric.

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Wittow authors new article on Cloud Computing

Seattle partner Mark Wittow recently authored an article on cloud computing legal issues, specifically examining recent cases involving cloud computing issues and describing new types of claims that likely will arise as a result of the increased importance of internet-based connectivity (in contrast to desktop or local network-based resources) to provide all types of computing needs and related services. The article “Cloud Computing: Recent Cases and Anticipating New Types of Claims”  appears in the January 2011 issue of The Computer and Internet Lawyer.

Mark’s article explains how cloud computing, as a leading means of digital distribution, has created new types of business models, which in turn have led to unique legal issues. Cases relevant to cloud computing arise in a variety of areas of law, including contracts, copyrights and privacy.

FTC Proposes Broad New Privacy Framework, and Asks “How It Might Apply in the Real World”

by Henry L. Judy (Washington D.C.), Holly K. Towle (Seattle), Samuel R. Castic (Seattle), Jonathan D. Jaffe (San Francisco).

On December 1, 2010, the FTC released a preliminary staff report entitled “Protecting Consumer Privacy in an Era of Rapid Change” that has the potential to materially change the privacy obligations of all businesses in the United States. The staff report poses important policy choices regarding who controls data and what information will freely flow in the United States. It proposes a broad privacy framework and articulates a number of new and strengthened data privacy obligations that are almost certain to increase business compliance costs and potential litigation.

While the staff report is only a preliminary recommendation, the final privacy proposal that emerges from the FTC will likely serve as both a guide for future enforcement actions, and as a basis for future legislation. The FTC is accepting comments on its proposed framework until the end of January 2011, and it is strongly recommended that businesses do so if they want to register their concerns before the FTC issues its final privacy framework.

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New Disability Access Requirements for Advanced Communications and Video

By Marty Stern (Washington, DC), Carol Lumpkin (Miami) and Stephanie N. Moot (Miami).

The President signed the 21st Century Communications and Video Accessibility Act of 2010 on October 8, 2010 (the “ComVid Accessibility Act” or “Act”). The ComVid Accessibility Act expands various disability access requirements to VoIP phones, browser-enabled smart phones, text messaging, Internet-enabled video devices, on-line video of TV programming, TV navigation devices, and programming guides and menus, among other things.

Karen Peltz Strauss, who has the lead at the Federal Communications Commission (“FCC” or “Commission”) on implementing the ComVid Accessibility Act, appeared on a recent live program on Internet TV channel Broadband US TV and discussed the FCC’s “enormous mandate” to implement the new Act.  Click here for a clip of Ms. Peltz Strauss’ comments on the program.  (with permission from TV Worldwide).[1]  According to Ms. Peltz Strauss, “Every segment of the industry that has anything to do with broadband, television, including cable, satellite or broadcast, Internet-based television, as well as . . . Internet-based providers, traditionally regulated [telephone] companies, wireless companies” needs to be paying attention to the new Act.   “Virtually every segment that has anything to do with communications or video programming is covered.”

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