United States: Cybersecurity 2018 – The Year In Preview: Federal Enforcement Trends

Last Updated: December 5 2017
Article by Rachel Hutchinson

Editors' Note: This is the third of a multi-part end-of-year series examining important trends in data privacy and cybersecurity during the coming year. Click here for our previous entry on HIPAA Compliance, and here for our entry on emerging security threats. Up next: trends in state enforcement.

This time last year, Donald Trump had just been elected, and we at Foley were predicting an uncertain future for federal cybersecurity enforcement. At the time, the Federal Trade Commission (FTC) had been steadily increasing its enforcement authority in the cybersecurity space, while other federal agencies like the Securities and Exchange Commission (SEC) and the Consumer Financial Protection Bureau (CFPB) had also begun to step into the arena. Given the deregulatory spirit of Trump's campaign, we questioned whether this trend would continue under his administration.

In truth, federal cybersecurity enforcement under Trump has been a mixed bag. On the one hand, there are signs that the FTC and other federal agencies have started to loosen their grip. On the other, clashes between Washington and technology companies over access to consumer data in the criminal context have increased. Will this trend—tough on crime, light on regulation—continue throughout the Trump presidency?

Loosening Regulatory Oversight?

In our 2017 Year in Preview, we remarked that Trump would have the opportunity to fill three commissioner sports on the FTC, and speculated that the new picks might signal a change in agency enforcement priorities. While Trump's picks indicate a predictable pro-business shift, the FTC's cybersecurity enforcement has continued largely unabated. However, other actions by the Trump administration, like the repeal of the FCC's internet privacy rules, signaled a sharper shift away from regulation. Here are the trends we see.

• FTC enforcement marches on.

The FTC is one of the key regulators in the cybersecurity area. Since the Third Circuit confirmed that its broad power to regulate unfair and deceptive trade practices extends to cybersecurity, the FTC has been uniquely positioned to police the data security practices of private actors.

In January 2017, Trump appointed Republican Maureen Ohlhausen as the FTC's acting chairwoman. At first it seemed like Ohlhausen was inclined to shrink the FTC's data privacy role—for example, she had expressed concern in the past about FTC overreach in privacy and security. At the IAPP Global Privacy Summit in April, she said that the FTC should focus its enforcement actions on cyber breaches that have caused or are likely to cause injury. She made similar comments in a speech to the American Bar Association's Consumer Protection Conference in February, arguing that the FTC should concentrate on cases with "objective, concrete harms such as monetary injury and unwarranted health and safety risks," not on those involving "speculative injury." She also hinted that she has broader concerns about the burden civil investigative demands, or CIDs, impose on companies. And when Trump directed all executive branch agencies to eliminate two regulations for every new one created, Ohlhausen said she welcomed the president's order, despite the fact that the FTC is independent agency not covered by the directive.

But despite Ohlhausen's comments, the FTC's data privacy enforcement practices did not change much in 2017. In August, the agency issued sweeping penalties against Uber for misusing its customers' data, reaching a settlement that requires Uber to submit to 20 years of privacy checkups (not unusual for and FTC settlement in this space). Recent FTC publications continue to refer to the agency as "America's top cop on the privacy beat." Finally, Ohlhausen herself testified before Congress that "the FTC is committed to protecting consumer privacy and promoting data security."

However, the FTC's personnel shakeups did not end with Ohlhausen. This past October, Trump announced his permanent pick for FTC chairman, Republican Joseph Simons. He also tapped Noah Phillips, chief counsel for Texas Sen. John Corny (R), and consumer advocate Rohit Chopra to round out the Commission's remaining seats. It remains unclear where the three fall on data privacy issues, making it frustratingly difficult to predict the FTC's future in cybersecurity enforcement.

Finally, we note that LabMD, Inc. v. Federal Trade Commission, a case that could potentially further define the scope of the FTC's cybersecurity power, is still pending in the Eleventh Circuit. We have blogged about LabMD in the past, but as a refresher, the case turns on what kind of harm is necessary for the FTC to maintain a cybersecurity enforcement action. When the Eleventh Circuit granted LabMD's stay against the FTC in November, it suggested that emotional harm and other low-level speculative harms may not be enough. You can listen to the oral arguments in the case here.

• The FTC aside, other actions by the Trump administration suggest a more dramatic shift away from regulation.

In April, Trump signed legislation that repeals the Federal Communication Commission's (FCC) privacy protections for internet users, a landmark policy of the Obama era. The rules, which would have gone into effect in late 2017, prevented internet providers from collecting, storing, or selling certain types of customer information without their consent. Their repeal leaves data privacy enforcement entirely in the hands of the FTC.

In another, bigger step away from regulation, the FCC announced its plans to repeal so-called "net neutrality." The net neutrality rules, which were passed in 2015 under Obama, are designed to ensure that all internet content is treated equally by providers. If repealed, providers like Comcast and AT&T will be able to charge customers for access to different websites. Trump's nominee for FCC chairman, Ajit Pai, led the push against net neutrality. If the repeal succeeds, it will be one of Republicans' biggest de-regulatory successes since Trump took office.

Doubling Down on Crime

On the law enforcement side of data privacy, 2017 was a year of ramping up. Given Trump's policy positions, this is not a surprise. During the campaign, he railed against Apple's refusal to give the government access to the San Bernardino shooters' iPhone, and he has always been vocal about the importance of the fight on terrorism. Increasing federal law enforcement's surveillance powers over computers and mobile devices is in line with those policy goals.

However, U.S. technology companies have begun to push back. Under pressure from foreign customers who are threatening to switch to local service providers beyond the DOJ's reach, companies like Apple and Google are increasingly refusing to cooperate with federal law enforcement. For example, in the case of the San Bernardino shooters, Apple refused to create a custom back-door into the shooter's iPhone so that federal investigations could bypass its encryption, citing privacy concerns.

As of October, one of those fights is headed to the Supreme Court. That case, United States v. Microsoft Corporation, arose when the Department of Justice obtained a search warrant to seize the email of a drug trafficking suspect from Microsoft's servers in Ireland. Microsoft argued that DOJ needed more than a search warrant to force Microsoft to give up the email. Both the district court judge and the Second Circuit Court of Appeals agreed.

The DOJ obtained the warrant based on a 1986 statute called the Electronic Communications Privacy Act (EPCA). The EPCA regulates law enforcement's ability to access electronic data stored by third-party service providers like Google and Microsoft during criminal investigations. However, the EPCA has remained largely unchanged since it was enacted. Currently, it offers varying levels of privacy protection depending on how long an electronic communication has been "stored" on a server. Under 180 days, and only a subpoena is necessary; more, and the government must obtain a warrant. In an age when consumers expect the same level of privacy in texting and email as they do from phone calls, the EPCA is woefully out of date.

The EPCA is also not designed to deal with our current era, when a significant amount of U.S.-based data is stored on foreign services. The Second Circuit held as much, citing a "longstanding principle of American law that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States."

If the Supreme Court agrees, Congress may finally have to update the EPCA to deal with today's technology. The privacy protections those changes do—or do not—create could take time to sort through. As always, watch this space.

To view Foley Hoag's Security, Privacy and The Law Blog please click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
14 Dec 2017, Seminar, Boston, United States

The trustees of The Foley Hoag Foundation invite you to the upcoming Speaker Series event with David Friedman, Senior Vice President, Legal & Government Affairs of the Boston Red Sox.

15 Dec 2017, Seminar, Boston, United States

The New England Electricity Restructuring Roundtable has been meeting bimonthly since 1995 to discuss current topics related to important changes in the electric power industry in Massachusetts and throughout New England.

 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions