- Posts by Alexander J. FranchilliSenior Counsel
Attorney Alexander Franchilli helps clients comply with the evolving landscape of laws and regulations related to consumer protection, privacy, cybersecurity, and employment. He is an experienced litigator in state and federal ...
New York Governor, Kathy Hochul, recently announced proposed cybersecurity rules for New York hospitals, which are due to be imminently published in the State Register on December 6, 2023, subject to approval by the Public Health and Health Planning Council. The Governor’s press release indicates the proposed regulations, if enacted, will require New York hospitals to meet at least the following requirements:
- Establish a cybersecurity program and take proven steps to assess internal and external cybersecurity risks;
- Develop a response plan for potential cybersecurity ...
In a previous blog, we discussed the Federal Trade Commission’s (“FTC”) proposed changes to its Guides Concerning the Use of Endorsements and Testimonials in Advertising (the “Endorsement Guides”). The Endorsement Guides are intended to help businesses ensure that their endorsement and testimonial advertising conforms with Section 5 of the FTC Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce,” including false advertising. We specifically highlighted the FTC’s proposed changes related to social media platforms and their users, deceptive endorsements by online “influencers,” businesses’ use of consumer reviews, and the impact of advertising on children. Now, approximately one year later, and after receiving and considering public comments on its proposed changes, the FTC has issued its final rule adopting revisions to the Endorsement Guides. See Guides Concerning the Use of Endorsements and Testimonials in Advertising, 88 Fed. Reg. 48092 (July 26, 2023) (to be codified at 16 C.F.R. pt. 255). In issuing its final revised Endorsement Guides, the FTC stated that the changes are intended to “reflect the ways advertisers now reach consumers to promote products and services, including through social media and reviews.” We summarize below the FTC’s final revisions to the same sections of the Endorsement Guides covered in our earlier blog.
On July 26, 2023, the Securities and Exchange Commission (“SEC”) adopted its long-anticipated cybersecurity reporting rule (the “Final Rule”). The Final Rule applies to public companies subject to the reporting requirements of the Securities Exchange Act of 1934 and, in some cases, to foreign private issuers. As quoted in the SEC’s press release, SEC Commissioner Gary Gensler noted that many public companies already make cybersecurity disclosures to investors, and the Final Rule provides uniformity and structure for these future disclosures. The Final Rule also imposes a tight timeline for cybersecurity incident reporting and may include disclosure of an ongoing cybersecurity incident, as well as requiring periodic disclosures concerning organizational cybersecurity risk management processes and governance.
On July 13, 2023, the White House issued the first iteration of its National Cybersecurity Strategy Implementation Plan (the “Implementation Plan”), which will be updated annually. The two overarching goals of the Implementation Plan are to address the need for more capable actors in cyberspace to bear more of the responsibility for cybersecurity and to increase incentives to make investments in long-term resilience. The Implementation Plan is structured around the five pillars laid out in the White House’s National Cybersecurity Strategy earlier this year, namely: (1) defend critical infrastructure; (2) disrupt and dismantle threat actors; (3) shape market forces to drive security and resilience; (4) invest in a resilient future; and (5) forge international partnerships to pursue shared goals. The Implementation Plan identifies strategic objectives and high-impact cybersecurity initiatives under each pillar and designates the federal agency responsible for leading the initiative to meet each objective. The following summarizes some of the key initiatives included in the Implementation Plan that will directly impact critical infrastructure organizations, including healthcare, energy, manufacturing, information technology and financial services.
A recent enforcement action by the Federal Trade Commission (“FTC”) against 1Health.io—which sells “DNA Health Test Kits” to consumers for health and ancestry insights—serves as a reminder that the FTC is increasingly exercising its consumer protection authority in the context of privacy and data protection. This is especially true where the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) does not reach. The FTC’s settlement with 1Health.io highlights a wide-range of privacy and security issues companies should consider relating to best practices for updating privacy policies, data retention policies, configuration of cloud storage and vendor management, especially when handling sensitive genetic data.
On May 18, 2023, the Federal Trade Commission (FTC) filed a Notice of Proposed Rulemaking and Request for Public Comment (“NPRM”) seeking to amend the Health Breach Notification Rule (“HBNR”). We previously wrote about the FTC’s policy statement, in which the FTC took the position that mobile health applications that are not covered by the Health Insurance Portability and Accountability Act (“HIPAA”) are covered by the HBNR. In our post, we highlighted concerns raised in dissent by commissioner Noah Joshua Phillips that the FTC’s interpretation of “breach of security” was too broad. Commissioner Phillips has since resigned.
In the absence of a federal law directly aimed at regulating artificial intelligence (AI), the Federal Trade Commission (FTC) is seeking to position itself as one of the primary regulators of this emergent technology through existing laws under the FTC’s ambit. As we recently wrote, the FTC announced the establishment of an Office of Technology, designed to provide technology expertise and support the FTC in enforcement actions. In a May 3, 2023 opinion piece published in the New York Times entitled “We Must Regulate A.I. Here’s How,” Lina Khan, the Chairperson of the FTC, outlined at least three potential avenues for FTC enforcement and oversight of artificial intelligence technology.
In a March 6, 2023 constituent update, the U.S. Food and Drug Administration (“FDA”) announced the launch of its new Dietary Supplement Ingredient Directory (the “Directory”), which the agency describes as “a one stop shop of ingredient information that was previously found on different FDA webpages.” According to the FDA, the Directory is “intended to help manufacturers, retailers, and consumers stay informed about ingredients that may be found in products marketed as dietary supplements and quickly locate information about such ingredients on the FDA’s website.” With the release of the Directory, the FDA is now retiring the “FDA Dietary Supplement Advisory Ingredient List.”
On February 17, 2023, the Federal Trade Commission (“FTC”) announced the creation of the Office of Technology (the “OT”), which will be headed by Stephanie T. Nguyen as Chief Technology Officer. This development comes on the heels of increasing FTC scrutiny of technology companies. The OT will provide technical expertise and strengthen the FTC’s ability to enforce competition and consumer protection laws across a wide variety of technology-related topics, such as artificial intelligence (“AI”), automated decision systems, digital advertising, and the collection and sale of data. In addition to assisting with enforcement matters, the OT will be responsible for, among other things, policy and research initiatives, and advising the FTC’s Office of Congressional Relations and its Office of International Affairs.
The California Privacy Protection Agency Board (the “Board”) held a public meeting on February 3, 2023, adopting and approving the current set of draft rules (the “Draft Rules”), which implement and clarify the California Consumer Privacy Act of 2018 (“CCPA”) as amended by the California Privacy Rights Act of 2020 (“CPRA”). The Draft Rules cover many CCPA requirements, including restrictions on the collection and use of personal information, transparency obligations, consumer rights and responding to consumer requests, and service provider contract requirements. At the meeting, the Board also addressed additional proposed rulemaking processes concerning cybersecurity audits, risk assessments, and automated decision-making.
On February 1, 2023, the FTC announced a proposed $1.5 million settlement with GoodRx Holdings, based on alleged violations of the Federal Trade Commission Act (“FTC Act”) and Health Breach Notification Rule (“HBNR”) for using advertising technologies on its websites and mobile app that resulted in the unauthorized disclosure of consumers’ personal and health information to advertisers and other third parties. On the same day, the U.S. Department of Justice, acting on behalf of the FTC, filed a Complaint and Proposed Stipulated Order detailing the FTC’s allegations and the terms of the proposed settlement.
On December 1, 2022, the Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) published a bulletin warning that commonly used website technologies, including cookies, pixels, and session replay, may result in the impermissible disclosure of Protected Health Information (“PHI”) to third parties in violation of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). The bulletin advises that “[r]egulated entities are not permitted to use tracking technologies in a manner that would result in impermissible disclosures of Protected Health Information (“PHI”) to tracking technology vendors or any other violations of the HIPAA Rules.” The bulletin is issued amidst a wider national and international privacy landscape that is increasingly focused on regulating the collection and use of personal information through web-based technologies and software that may not be readily apparent to the user.
On March 15, 2022, President Biden signed into law the 2022 Consolidated Appropriations Act containing the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (the “Cyber Incident Reporting Act”). While President Biden’s remarks highlighted the $13.6 billion in funding “to address Russia’s invasion of Ukraine and the impact on surrounding countries,” the 2022 Consolidated Appropriations Act contained numerous other laws, including the Cyber Incident Reporting Act, which should not be overlooked. The Cyber Incident Reporting Act puts in motion important new cybersecurity reporting requirements that will likely apply to businesses in almost every major sector of the economy, including health care, financial services, energy, transportation and commercial facilities. Critical infrastructure entities should monitor the upcoming rule-making by the Cybersecurity and Infrastructure Security Agency (“CISA”), as the final regulations will clarify the scope and application of the new law.
Recent decisions from the European Union (EU) have placed renewed focus on the use of common cookies used on ecommerce and other websites used by consumers and employees and transfers of personal data collected through cookies to the United States. The EU Data Protection Authorities (DPAs) found that the use of widely used website technologies (i.e., cookies and java script) to automatically collect identifiers from the users’ devices or through their use of internet protocols (e.g., IP addresses) resulted in the collection of personal data. The DPAs further found that the subsequent transfer of this data to Google servers located in the United States violated EU cross-border data transfer requirements because there were inadequate safeguards under the Schrems II decision invalidating the EU-US Privacy Shield. One notable impact of the decisions is to dismiss the adequacy of encryption technologies where the service provider (such as Google) has access to the cryptographic key and can be compelled to surrender it in order for the data to be decrypted and read by U.S. surveillance authorities. Consideration of the impact of these decisions is critically important for ecommerce and other websites operating in the EU, as well as more generally for organizations that transfer personal data of consumers and employees to the U.S.
The Federal Trade Commission (“FTC”) recently issued guidance clarifying protections applicable to consumers’ sensitive personal data increasingly collected by so-called “health apps.” The FTC press release indicated it has approved a policy statement by a vote of 3-2 offering guidance that organizations using “health applications and connected devices” to “collect or use” consumers’ personal health information must comply with the cybersecurity, privacy and notification mandates of the Health Breach Notification Rule (the “Rule”).
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