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Transborder Transfers of Data Outside Europe Need New Rules

The European Commission established a Data Protection Working Party on data protection and privacy—an independent advisory body set up under the Data Protection Directive. This Working Party recently published an opinion relating to the EC’s draft standard contract terms that apply to the movement of data across national borders, notably between Member States within and outside of the EU. 

Specifically, the Working Party recommended that the Commission develop brand new model contract provisions to deal with international and multi-national data processing involving transfers of data outside the EC—a long-standing sore point among companies in countries that have historically been viewed as having "inadequate" privacy and data protections. These model or standard contract terms would establish acceptable contractual protections between entities that control data within the European Union/European Economic Area (EU/EEA) and data processors they use outside the European Community, to ensure protections are comparable.

Continue reading “Transborder Transfers of Data Outside Europe Need New Rules”

E. B. White

“I arise in the morning torn between a desire to improve the world and a desire to enjoy the world. This makes it hard to plan the day.”

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Digital Dilemma – How To Respond When Law Enforcement Knocks

The SEC shows up at your door asking for documents relating to options and securities granted for the past 10 years. Homeland Security Officers arrive at your plant asking to speak to several employees and asking for copies of employment records. State police, having confiscated laptop computers and CD-ROM files during a drug bust, show up at your door asking to compare database records since they suspect that identity theft or credit card fraud may be afoot. The Department of Justice wants to interview several of your employees, claiming some may have entered the United States on non-immigrant visas. Sound far-fetched? Probably not these days.

With the economy in turmoil, corporate officers on the defensive, immigration under attack, and money laundering, piracy, drugs, terrorism and Ponzi schemes making headlines almost every day, law enforcement and regulatory officials are under increasing scrutiny and increasing pressure to protect the public and get results. It doesn’t take much imagination to appreciate that during the course of a criminal investigation, the most compelling evidence often arises from third parties who aren’t even knowingly involved; airline, credit card, hotel, telephone, email and other records can often document the where, when and sometimes how of criminal activity.

From a civil law point of view, competitive pressures can lead to claims of economic espionage and theft of trade secrets, and antitrust issues can arise that will spawn litigation and the compelled disclosure of evidence. Indeed, any corporate executive or corporate lawyer who has ever been on the receiving end of a third party subpoena issued to them—innocent third parties—knows how burdensome and costly such requests for evidence can be, even if you aren’t a party to the lawsuit.

In a digital world, it is also far too easy to collect, maintain and copy vast amounts of information—information accessible with several keystrokes, available on easily transportable magnetic media. For corporations and their executives and managers, growing and often regular dilemmas must be confronted when law enforcement or regulators show up at the door and start asking questions or requesting information. Corporations have legal obligations involving compliance and cooperation with law enforcement and regulatory officials. But they also have responsibilities and legal obligations to their employees and their workplaces—and to their shareholders. If not done properly, cooperating with law enforcement and regulators can lead to lawsuits by employees, customers and, sometimes—if large amounts of time and money are expended because of improper or inadequate procedures—even shareholders. 

Continue reading “Digital Dilemma – How To Respond When Law Enforcement Knocks”

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FTC Releases Mobile Marketplace Report

Earlier today, the FTC staff issued a report concerning consumer protection issues arising in the mobile commerce marketplace. A copy of the full report, Beyond Voice, Mapping the Mobile Marketplace is available by clicking the link. The key findings in the report:

  • Cost disclosures about mobile services continue to generate consumer complaints. The FTC staff intends to monitor cost disclosures, bring law enforcement actions, and work with industry to improve self-regulatory enforcement
  • The FTC and its law enforcement partners should continue to monitor the impact on consumers of unwanted mobile text messages, malware and spyware, and take law enforcement action if and as needed
  • Although spyware and malware are not yet significant problems on mobile devices, the FTC is encouraging development of strategies to prevent or minimize their spread, since the issue is likely to magnify as consumers increasingly use mobile devices for a wider range of applications, including Internet access
  • Increasing use of smart phones to access the mobile Web presents unique privacy challenges, especially regarding children. The FTC will expedite regulatory review of the Children’s Online Privacy Protection Rule to determine whether the rule should be modified to address changes in the mobile marketplace. This review was originally set for 2015, and will now begin in 2010 instead.

Given the numbers of wireless and mobile devices in the hands of individuals under the age of 18 (and 13), and the increasing proliferation of mobile devices, this will become a hotter topic in the months and years ahead. As if this point needed to be emphasized, it has been reported that as of January 2007—two years ago—there were approximately 800 million cars, 850 million personal computers, 1.5 billion television sets, but already 2.7 billion (yes, billion) wireless and mobile devices in use around the globe, with more than 800 million e-mail and 1.8 billion SMS text-messaging users.

The sheer numbers are staggering, and we are on top of this issue big time. Contact Joe Rosenbaum, John Feldman or Douglas Wood if you need more information or assistance.

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Don’t Be Green With Envy – Be Green with a Limerick

Valuable insight in an insightful land.

Political leadership throughout the world is changing, nowhere more so than in the United States. With that will come major changes in regulation, at the local and federal levels or through voluntary compliance with industry standards. Member states in the EU find themselves struggling to respond to local concerns while maximizing their combined market strength. Globalized media and interactive technology are providing consumers worldwide with greater control and choice in what they experience. Local markets are now boundary-less – confounding attempts at local regulation. What are today’s rules? How should advertisers and their counsel respond to the merged but dissonant marketplace and how can they balance competing attempts at regulation in the United States and Europe?

If you are a lawyer looking for high quality CLE or an advertiser hoping to get a glimpse (or make sense) of the law – or if you just want to hear where rhyming is an art and a science, then come join some of the most experienced corporate counsel and outside practitioners in Limerick, Ireland for Advertising Law in the United States and Europe — The Challenges Ahead sponsored by the Franklin Pierce Law Center and the University of Limerick. The course, being held at the end of July on the campus of the University of Limerick, a short distance from Shannon, Ireland will be as exciting and vibrant as the countryside.

Faculty is comprised of professors, practitioners and government leaders from both sides of the Atlantic, including Douglas Wood of Rimon LLP.

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France: Online Ads Could Lead to User Data ‘Merchandising’

In a report entitled “Targeted Online Advertising” (La Publicité Ciblée en Ligne), presented in February and recently released publicly, the French data protection regulatory authority (CNIL) has expressed concern that targeted online advertising could be a conduit for the merchandising of personally identifiable information about online users. 

The CNIL has been examining context-sensitive, behavioral marketing and targeted advertising mechanisms online, and is concerned about privacy implications. The report notes that analyzing online user data for the purpose of serving more relevant advertising involves the collection of Internet protocol addresses, what websites a user arrived from or subsequently visited, and even key words entered by the user. In case you haven’t thought about it, definitions are hardly uniform in laws and regulations around the world, i.e., an IP address is considered personal data in the EU, but is not personally identifiable information in the United States. 

The report raises an alarm over what could be a means of “systematic profiling” and examines what it believes are growing risks to privacy in this context. In France, and many jurisdictions, targeted advertising must comply with the same data protection rules that apply to the use of personal data online. The French authorities have consistently maintained that users should be specifically informed about how their data will be used, and should be given the opportunity to opt out of these uses—even if it means they can no longer use the services available on the site.

The report also specifically notes that many free services on the Internet are actually subsidized by advertising. While “free” is an accurate financial description in a literal sense, consumers often don’t appreciate they are actually paying a “price”—the value of personal information provided in exchange for “free” services they receive online. 

While the report does not attempt to cover mobile or wireless advertising broadly, it does note that adding information about a user’s location through GPS and other technology, adds tracking capability that the CNIL fears will allow for even greater intrusion and profiling of individual behavior. You can read the entire CNIL report in French on their website at “La publicité ciblée en ligne” (Targeted Online Advertising).

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Useless But Compelling Facts – April 2009

This month, we break new ground (now that we have a web-based format) by having our first ‘visual’ useless, but compelling fact. Years ago, American Express had an extraordinarily successful, long running ad campaign – the “Do You Know Me?” series. They would select very famous people – people who’s name you would instantly recognize, but more than likely would never know what they looked like – and showcase them in ads. Until they held up their American Express Cards imprinted with their famous names, you might be scratching your head wondering who they are. So take a look at this and we ask you:  

“Do you know me?”

 

Good luck and send your answers to me, Joe Rosenbaum at joseph.rosenbaum@rimonlaw.com.

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Useless But Compelling Facts – February 2009 Answer

Last month’s correct answer came almost simultaneously from Florida, New York and India – from long time Legal Bytes readers Shari Gottesman, Richard Fine and Lubna Kably. I WILL send you each a prize! Their correct answer is the group of islands known as Tierra del Fuego (Land of the Fire), off the coast South America (1 large, 5 medium and many small islands and inlets). Unfortunately, the original native population was ravaged by disease brought by explorers and settlers and since 1881, Tierra del Fuego has had divided ownership. The eastern portion belongs to Argentina and the Western to Chile. Thanks for all your responses and remember – DON’T send your answers to the Legal Bytes blog, send them directly to me at joseph.rosenbaum@rimonlaw.com or it won’t count.

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Ad Industry Reaches Tentative Accords with SAG-AFTRA on Commercials

Early on the morning of April 1, 2009, the Joint Policy Committee of the major advertising industry groups reached a tentative agreement on new contracts that will govern the compensation provided to actors represented by the Screen Actors Guild and the American Federation of Television and Radio Artists, through March 31, 2012. The agreements still need to be approved by the union boards and members, with voting expected by the middle of May. Leading the team representing the Joint Policy Committee was Rimon Partner Douglas J. Wood.

The basic terms call for an increase of about 5.1 percent in actors’ compensation over the next three years, and higher advertiser contributions to the unions’ health and retirement funds. However, over time, a limit on the contributions advertisers need to make to the unions’ pension and health benefits—up to the first $1 million of salary—will also go into effect.

The tentative accords include a slight increase in fees for commercials that run in new-media formats, but specifically set aside funds for a two-year study focused on examining and restructuring the compensation formulation for actors in commercials to a model whereby they would be paid based on number of viewers (i.e., ratings), and not merely on how many times the commercial airs.

You can’t get any closer to the action than by talking to lawyers at Rimon. If you are an advertiser, an advertising agency, media executive, or anyone involved in commercial production, you need to talk to us. Call us now. We don’t just have the news – we are the news!

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Domain Names Grow Complex and Pricier on the Information Superhighway

As we reported last in previous issues of Legal Bytes, the Internet Corporation for Assigned Names and Numbers (ICANN) is preparing to open up the generic top level domain space to virtually any string of letters. The 21 existing generic top level domains (gTLD) include .com, .net, .org, .edu, .info and 16 others.

What Does This Means To Your Domains?   Under the proposal, brand owners will be able to apply for gTLDs corresponding to their brands, and entities representing communities, or wishing to organize a community or common interest channel, will be able to apply for names representing those various interests (e.g., .bank, .medicine, .law, .baseball, etc.).

Why Should I Care? These new domains might be used in many ways, but be prepared for steep costs. If someone wants to buy a new top level domain (and, in effect, act as the registry for the purchase or distribution of second level domains), it can be very expensive – $185,000 plus $25,000 per year, plus other fees and costs associated with the processing of the application. . .   and the IP stakes involved in this proposal are high. The comments submitted to ICANN on its First Draft Proposal from about 300 corporations, associations, governmental agencies and individuals worldwide, were largely negative and reflected serious concerns about trademark rights, increased cybersquatting, monitoring costs, defensive registrations and the like. Many complained of the steep toll these costs already take over the 21 existing domains and painted a gloomy choice under the new proposal: increase expenditures on trademark defense over potentially hundreds of new domain channels, or refuse to make the expenditure and potentially jeopardize the strength of a brand.

What You Can Do? Applications will likely not be accepted until, at the earliest, December or the first quarter of 2010, so this is your opportunity to make your concerns known. In the meantime, ICANN submitted its Second Draft Guidebook that purports to address some of the concerns raised by the comments and at least pays lip service to giving further consideration to the trademark questions. Comments on the Second Draft Guidebook are due April 13. ICANN is also soliciting comments on recent related studies and is preparing to issue a report addressing trademark considerations later in April. We know the issues involved and are familiar with this process. We represented the Association of National Advertisers (ANA), the advertising industry’s largest trade association, in connection with its submission to ICANN regarding the First Draft Guidebook, and we are working with the ANA on formulating its position on the second draft. You can click on the highlighted links to read the ANA’s submission to ICANN on the First Draft Guidebook, and an updated Client Alert on this topic. If you are interested in submitting your comments and would like us to assist you, I strongly encourage you to contact John Hines.