Global Privacy & Security Compliance Law Blog

New Cyber Incident Reporting Requirements on the Horizon in the US

Posted in Security

Companies should take steps now to prepare for the new rules and expectations.

By Jennifer C. Archie, Tony Kim, Serrin Turner, Alexander L. Stout, Ryan J. Malo, and James A. Smith

The US government continues to expand regulatory requirements around notification and disclosure of major cyberattacks or incidents. New measures are arriving on the heels of high-profile ransomware attacks on US companies and critical infrastructure, such as the Colonial Pipeline hack that caused gas shortages in the eastern United States last summer.

Announced shared cybersecurity priorities across the Executive Branch include:

  • Cyber hygiene in the public and private sector, especially where critical infrastructure is involved
  • Operational collaboration between the public and private sector for tier one events
  • Disruption of the flow of cryptocurrency or other consideration to attackers
  • Fulsome, accurate, timely disclosure to investors and other stakeholders
  • Comprehensive reporting of incidents

Continue Reading

Utah Consumer Privacy Act: Fourth US State Enacts Comprehensive Data Privacy Legislation

Posted in Privacy, Security

Utah enacts data privacy legislation in the mold of California, Colorado, and Virginia, but with less onerous requirements for businesses, in what is expected to be a model for more states going forward.

By Jennifer Archie, Michael Rubin, Joseph Hansen, and Wesley Tiu

On March 24, 2022, Utah Governor Spencer Cox signed the Utah Consumer Privacy Act (UCPA), making Utah the fourth US state to enact comprehensive data privacy legislation. The UCPA was introduced on February 17, 2022, and sped through the state legislature, receiving final passage on March 3, 2022.

The UCPA, which is set to take effect on December 31, 2023, builds off existing and forthcoming privacy legislation in California, Colorado, and Virginia, but lightens some of the compliance burdens on businesses. The UCPA does not impose any new privacy obligations on businesses that are not already required in California, and businesses will be familiar with the UCPA’s requirements — all of which have appeared in existing and forthcoming state data privacy laws. In a welcome change for businesses, however, the UCPA is narrower in certain respects as compared to its analogues in California (CCPA/CPRA), Colorado (CPA), and Virginia (VCDPA). (See, e.g., Virginia Consumer Data Protection Act: Second US State Passes Comprehensive Data Privacy Legislation.)

The UCPA represents the latest in a string of state privacy laws that seek to fill a nationwide gap while Congress continues to debate the merits of a federal data privacy law. The UCPA marks a slightly different variation, as it appears to have been more directly informed by industry groups such as TechNet and the State Privacy Security Coalition. These industry groups are working toward a uniform set of privacy laws in the United States, and Utah could set an example for additional states.

This blog post discusses some of the UCPA’s key provisions. Continue Reading

China Issues New Rules on Cybersecurity Review for Network Platform Operators Listing Abroad

Posted in Legislative & Regulatory Developments

Under the new rules Chinese NPOs holding more than 1 million individuals’ personal information must apply for a cybersecurity review prior to listing abroad.

By Hui Xu, Kieran Donovan, and Bianca Lee

On February 15, 2022, the Cybersecurity Review Measures (2021) (CRM 2021, unofficial English text available here) took effect. CRM 2021 was promulgated on December 28, 2021, by the Cyberspace Administration of China (CAC) and 12 other Chinese central authorities, including the Ministry of State Security, the Ministry of Industry and Information Technology (MIIT), and the China Securities Regulatory Commission (CSRC). The CAC published the first draft of CRM 2021 on July 10, 2021, for public comments, and published the final version on January 4, 2022. The CAC cites the Data Security Law (DSL) as the legal basis for the authority of CRM 2021.

The promulgation of CRM 2021 marks a step forward in China’s strict regulation of Chinese companies’ overseas listing and adds another hurdle to companies’ listing process. However, as the CSRC has repeatedly emphasized to the media, the Chinese government has no intention of banning Chinese companies from listing overseas, but rather wants to strengthen regulation from a national security and data security perspective.

See Latham’s Client Alert for a detailed discussion of CRM 2021, the new requirements that it introduces, and what Chinese companies will need to focus on when considering an overseas listing.

UAE Publishes First Federal Data Protection Law

Posted in Legislative & Regulatory Developments

Organisations subject to the law should carry out a gap analysis of their current compliance position against the new requirements.

By Brian A. Meenagh, Alexander Hendry, and Lucy Tucker

The United Arab Emirates (UAE) has issued its first federal data protection law (Federal Decree Law No. 45/2021 on the Protection of Personal Data) (the Data Protection Law), alongside a law establishing the new UAE Data Office (Federal Decree Law No. 44/2021 on Establishing the UAE Data Office).

The issuance of the Data Protection Law follows a trend of new data protection laws in the Middle East, including a data protection law in Saudi Arabia that will come into force on 23 March 2022. Continue Reading

CNIL Publishes White Paper on Digital Payments and Data Privacy

Posted in Legislative & Regulatory Developments, Privacy, Security

The French Data Protection Authority’s white paper discusses how companies can comply with data privacy and security obligations.

By Christian F. McDermott, Myria Saarinen, Calum Docherty, Charlotte Guerin, Jiou (Alex) Park, and Amy Smyth

The use of card, contactless, and innovative digital payment solutions has significantly increased in recent years, fueled by the immediate impacts of the ongoing COVID-19 pandemic and the longer-term growth of e-commerce and open banking. In this context, the legal and regulatory environment around payment data is no longer limited to traditional actors in the banking sector or the long-established ambit of banking secrecy rules. As such, stakeholders from fintech startups to established technology giants face an increasing patchwork of compliance obligations. Continue Reading

FTC Serves Notice of Enforcement Approach on Endorsements and Testimonials

Posted in Legislative & Regulatory Developments

Following recent setbacks, the FTC seeks a foothold for monetary remedies in the online advertising space.

By Jennifer C. Archie, Antony “Tony” Kim, Michael H. Rubin, and Marissa R. Boynton

On October 13, 2021, the Federal Trade Commission (FTC) sent a Notice of Penalty Offenses Concerning Endorsements and Testimonials to more than 700 businesses (the Notice). The Notice does not identify any alleged violations of law. Rather, it reminds recipients that fake online reviews and misleading endorsements are unlawful and highlights that the FTC intends to seek monetary relief if any of those 700 companies engages in conduct outlined in the Notice.

In citing past administrative cases, several of which date back to the 1940s and 1950s, the FTC warns brands and advertising agencies that using endorsements or testimonials in ways that run counter to these cases may expose them to civil penalties of up to US$43,792 per violation. The Notice follows on the heels of a similar warning regarding deceptive or unfair practices that was issued earlier in October to 70 for-profit higher education institutions.

Read the full Client Alert.

China Introduces First Comprehensive Legislation on Personal Information Protection

Posted in Privacy, Security

The Personal Information Protection Law, or PIPL, imposes stringent obligations of a similar standard to the GDPR and will take effect on November 1, 2021.

By Hui Xu, Kieran Donovan, and Bianca Lee

On August 20, 2021, the Standing Committee of the National People’s Congress adopted the Personal Information Protection Law of the People’s Republic of China (PIPL), the first legislation dedicated to protecting personal information in China. PIPL will take effect on November 1, 2021. PIPL previously underwent two revisions: the First Draft in October 2020 and the Second Draft in April 2021. Prior to PIPL, personal information in China was protected largely by the Network Security Law (which took effect in June 2017), the Civil Code (which took effect in January 2021), various provisions in other laws, and the Data Security Law, which was adopted in June 2021 and took effect on September 1, 2021. Collectively, these legislative sources will provide a comprehensive legal framework for protecting personal information in China.

Key Points:

  • Extraterritorial effect: PIPL applies to those who process personal information about Chinese individuals inside China as well as those who process personal information about Chinese individuals outside China.
  • Legal basis: PIPL expands the legal bases for processing personal information to seven, including where it is necessary for the performance of a contract with the individual.
  • Data transfer restrictions and localization requirements: Critical information infrastructure operators (CIIOs) and those who exceed the threshold of personal information processed set by the Cyberspace Administration of China (CAC) must store personal information in China unless they pass a CAC security assessment. PIPL also imposes more stringent requirements on cross-border data transfers, e.g., consent of the individual is always required.
  • Fines: Those who violate PIPL may face fines of up to 5% of annual revenue of the previous year or CNY50 million.

Read the full Client Alert.

China Issues New Regulations to Protect the Critical Information Infrastructure

Posted in Privacy, Security

The regulations aim to protect the security of the CII and impose more compliance obligations in support of the Network Security Law.

By Hui Xu and Kieran Donovan

On July 30, 2021, the State Council of the People’s Republic of China (PRC) published the Security Protection Regulations on the Critical Information Infrastructure (the Regulations), which was adopted by the State Council on April 27, 2021. The Regulations took effect on September 1, 2021, along with the recently passed Data Security Law. The Regulations are the first set of administrative regulations promulgated by the State Counsel on the critical information infrastructure (the CII) after the concept of the CII was initially introduced in the Network Security Law in 2016.

The Regulations are designed to provide clarification and guidance on:

  • Scope and designation of the CII. The Regulations offer a more detailed definition of the CII than that in the Network Security Law, and add “national defense and technology industries” to the scope of the important industries and sectors. For a more specific identification of the CII, the Regulation delegates the competent industry regulators the authority to formulate the implementing rules to designate the CII for their industries and sectors.
  • Compliance obligations for critical information infrastructure operators (CIIOs). The Regulations further impose the compliance obligations of CIIOs as: (1) establishing comprehensive network security protection systems and accountability systems; (2) setting up a specified security management function to security protection works; (3) carrying out network security inspections and risk assessments; (4) undertaking network security reviews and entering into confidentiality agreements when purchasing network products and services; and (5) reporting network security incidents or threats to authorities.
  • Regulatory requirements on the protection of the CII. The Regulations outline responsibilities and duties for related governmental authorities to carry out the security protection of the CII, including the Protection Departments of relevant industries, the Cybersecurity Administration of China, the Public Security Bureaus, the National Security Bureaus, and relevant authorities at provincial levels.
  • Penalties (including high fines and severe consequences) on CIIOs that fail to fulfill the compliance obligations and to meet regulatory requirements. The Regulations are generally consistent with the Network Security Law on penalties for CIIOs that breach their obligations. Non-compliant CIIOs may be required to rectify damage caused by violations and may receive a warning from competent authorities, and may face monetary penalties up to CNY1 million (~US$154,000), and responsible personnel may be subject to fines up to CNY100,000 (~US$15,000).

Read the full Client Alert.

UAE Decision on Health Data Law Provides Clarity

Posted in Privacy

The decision will likely provide comfort to businesses operating in the healthcare sector both in the UAE and globally.

By Brian A. Meenagh and Avinash Balendran

On 28 April 2021 the United Arab Emirates (UAE) federal government issued Ministerial Decision No. 51 of 2021 (the Decision) to clarify when health information may be stored or transferred outside of the UAE. The Decision should pave the way for many domestic and overseas healthcare service providers to continue processing, storing, and transferring health information outside of the UAE.

The Decision reiterates the default position established in 2019 that health information must be kept within the UAE unless such activity has been approved by a decision of the health authority or the UAE Minister of Health and Prevention. Crucially, however, the Decision provides a series of exemptions to that default position.

To see a table of the exemptions, read Latham’s Client Alert.

China’s New Data Security Law: What to Know

Posted in Legislative & Regulatory Developments, Security

The Data Security Law will enhance an increasingly comprehensive legal framework for information and data security in the PRC.

By Hui Xu and Kieran Donovan

On June 10, 2021, the Standing Committee of China’s National People’s Congress passed the Data Security Law (DSL), which will come into effect on September 1, 2021. The primary purpose of the law is to regulate data activities, safeguard data security, promote data development and usage, protect individuals and entities’ legitimate rights and interests, and safeguard state sovereignty, state security, and development interests. The DSL will enhance an increasingly comprehensive legal framework for information and data security in the People’s Republic of China (PRC). Highlights in the DSL include that it:

  • Applies to a wide range of data and data activities, with extraterritorial jurisdiction. The DSL broadly defines “data” as any record of information created in electronic or other forms, and comprehensively defines “data activities” to include data collection, storage, usage, processing, transmission, provision, and disclosure of data. The territorial scope of the DSL extends beyond the PRC and also applies to data activities conducted outside of the PRC, if they may “harm the national security or public interests of the PRC, or the legitimate rights of Chinese citizens or entities.”
  • Refines regulations on “important data” and emphasizes protection of “core state data.” The DSL proposes to classify and protect data based on importance of the data and requires authorities to provide a list of important data to strengthen the protection. The DSL further introduces the concept of core state data and emphasizes that the state will implement a strengthened management system in relation to core state data involving national security, lifelines of the national economy, important people’s livelihood, and major public interests.
  • Imposes a set of obligations combined with high fines and severe penalties on entities and individuals who conduct data activities. In particular, entities violating regulations of cross-border data transfer, or entities violating the core state data management system or harming state sovereignty, national security, and development of interests, may face penalties including monetary fines of up to CNY10 million (~US$1.5 million) and/or revocation of business licenses or demands to close down businesses, and may bear criminal responsibilities (if applicable).

Read the full Client Alert

LexBlog