Airbnb v. NYC: Data Collection and Fourth Amendment Protection

airbnbDuring 2018, the hand-wringing demands for “better” protection of online consumers’ privacy (despite the likely costs, some of which we documented here) grew to a fever pitch. Easily forgotten amid the cacophony is data-collecting companies’ own expectation of privacy in their extremely valuable property. A federal court decision last week provides a timely reminder that businesses possess civil liberties too, which they can use to defend against unreasonable government intrusion. The decision also gives local, state, and federal regulators and legislators something to keep in mind as they rush to “do something” about data privacy.

The decision arises from New York City’s attempt to minimize the societal ills that purportedly accompany short-term rentals. Citing the difficulty of enforcing a 2010 city ordinance that prohibits certain rental arrangements, the City Council approved a second ordinance last year requiring all home-share “booking services” to hand over monthly transaction reports. Regulators could then scour the reports for violations of the 2010 law. The 2018 law, which was to take effect on February 2, imposes fines of up to $1,500 for each withheld listing. Continue reading Airbnb v. NYC: Data Collection and Fourth Amendment Protection”

Regulatory and Legal Barriers to Tech-Company Market Entry, Success, Stubbornly Persist

FTC_Man_Controlling_TradeLast month at The Atlantic Festival, FTC Commissioner Slaughter and former FTC Chair Ohlhausen participated in an enlightening interview on technology regulation. When discussing how the United States approaches regulation compared to other nations, Ohlhausen said the U.S. has such an “enormous presence in the tech space” due in part to America’s “lighter touch” on regulation.

Slaughter questioned whether regulation stifled innovation to the extent Ohlhausen inferred, noting that Silicon Valley is located in a state with a particularly challenging regulatory and legal environments.

Commissioner Slaughter’s comments, and the perspective they represent, merit serious reflection and analysis, especially with the FTC holding an ongoing series of Hearings on Competition and Consumer Protection in the 21st Century. Stakeholders participating in and commenting on those hearings should remind the Commission of regulation’s impact on innovation. Evidence abounds of that connection. Continue reading “Regulatory and Legal Barriers to Tech-Company Market Entry, Success, Stubbornly Persist”

The Eleventh Circuit Limits the FTC’s Authority to Challenge Practices as “Unfair”

06633 - Royall, M. Sean ( Dallas )Featured Expert Column: Antitrust & Competition Policy — Federal Trade Commission

By M. Sean Royall and Richard H. Cunningham, Partners with Gibson, Dunn & Crutcher LLP, and Bennett Rawicki, Associate Attorney, all in the firm’s Dallas, TX office.

The U.S. Court of Appeals for the Eleventh Circuit’s recent LabMD, Inc. v. FTC decision imposes significant limits on the Federal Trade Commission’s freedom to prosecute and settle cases the agency pursues pursuant to the “unfair acts or practices” prong of Section 5 of the FTC Act.

Overview of the FTC’s Case Against LabMD

In 2013, the FTC brought an administrative enforcement action against LabMD alleging a Section 5 violation based on purported unfair data security practices.  Among other alleged deficiencies, LabMD failed to identify that a file-sharing program an employee installed on a company computer had for years been exposing confidential patient information to the public.  Continue reading “The Eleventh Circuit Limits the FTC’s Authority to Challenge Practices as “Unfair””

Decision’s Permissive Standing Analysis Tags Ninth Circuit as Favorable Forum for Data-Related Suits

Cruz-Alvarez_FFeatured Expert Contributor—Civil Justice/Class Actions

By Frank Cruz-Alvarez, a Partner with Shook, Hardy & Bacon L.L.P. in the firm’s Miami, FL office, with Erica E. McCabe, an Associate in the firm’s Kansas City, MO office.

On February 26, 2018, the U.S. District Court for the Northern District of California tracked the U.S. Court of Appeals for the Ninth Circuit’s permissive approach to Article III standing when it denied Facebook Inc.’s (Facebook) renewed motion to dismiss for lack of subject matter jurisdiction in Patel, et al. v. Facebook Inc., ___F. Supp. 3d ___, 2018 WL 1050154 (N.D. Cal. Feb. 26, 2018).  In rejecting Facebook’s motion, the court held that the putative class properly alleged a concrete injury in fact, consistent with the U.S. Supreme Court’s ruling in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (Spokeo I). Continue reading “Decision’s Permissive Standing Analysis Tags Ninth Circuit as Favorable Forum for Data-Related Suits”

New Slate of Commissioners Should Elevate FTC’s Consideration of the First Amendment

FTC_Man_Controlling_TradeThe U.S. Senate Committee on Commerce, Science, and Transportation has scheduled a hearing for tomorrow, February 14, 2018, on the nominations of a new Chairman and three new Commissioners to the Federal Trade Commission (FTC). In recent years, FTC has become the primary national regulator of consumer data privacy and security, a responsibility that accords the Commission a staggering amount of influence over an American economy increasingly fueled by information.

When utilizing that authority over how businesses treat consumer data, the Commission has accorded little or no regard to the First Amendment. Data is speech, a reality that the incoming Chairman and Commissioners must incorporate into consumer-protection enforcement under § 5 of the Federal Trade Commission Act. Continue reading “New Slate of Commissioners Should Elevate FTC’s Consideration of the First Amendment”

WLF Briefing Delves into 2018 Legal, Regulatory Challenges for “Internet of Things” Technology

This interactive discussion was moderated by H. Michael O’Brien of Wilson Elser and featured Julie Kearney of the Consumer Technology Association, James Trilling of the Federal Trade Commission, and Courtney Stevens Young of Medmarc Insurance Group.

With “LabMD” Decision Looming, FTC Workshop Delves into Privacy & Data Security Harms

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Guest Commentary

By Douglas H. Meal, Michelle Visser, and David T. Cohen, Partners with Ropes & Gray LLP.

For years, the Federal Trade Commission (FTC), the primary consumer protection agency in the United States, has brought enforcement actions against companies on the basis that their alleged failure to use specified privacy and data security measures was purportedly an “unfair” business practice prohibited by § 5 of the Federal Trade Commission Act.  But FTC in fact has no authority under § 5 to declare a practice “unfair” unless, among other things, it causes or is likely to cause substantial, unavoidable injury to consumers that is not outweighed by countervailing benefits.

What (if anything), then, is a “substantial” injury in the privacy and data security context, how should its likelihood be measured, and how should one measure the benefits and costs of particular practices? Continue reading “With “LabMD” Decision Looming, FTC Workshop Delves into Privacy & Data Security Harms”