With Active Privacy Shield Enforcement, FTC May be EU's Best Privacy Ally
The FTC is holding organizations accountable for falsely claiming compliance with the EU-U.S. Privacy Shield, and those actions could have wider implications for just how seriously the commission will take faulty GDPR compliance.
September 10, 2019 at 09:30 AM
3 minute read
Last week, the Federal Trade Commission (FTC) reached settlements with five companies regarding allegations that they had falsely claimed to be compliant with the EU-U.S. Privacy Shield framework.
The framework allows companies to transfer data from the U.S. to the EU without running afoul of privacy laws like the General Data Protection Regulation (GDPR), but—and this is a big "but"—companies have to certify ahead of time with the Department of Commerce or potentially face the wrath of the FTC.
So far, the FTC hasn't been shy about cracking down on violators, and that momentum could potentially signify the regulator's willingness to seriously enforce other GDPR-related standards on privacy in the future.
"When Privacy Shield was adopted by [the U.S. and EU], the FTC made a commitment to give priority to enforcement," said David Shonka, a partner at Redgrave LLP and former acting general counsel at the FTC.
The numbers would tend to bear him out. Even before the Privacy Shield framework was officially adopted in 2016, Shonka estimates that the FTC filed about 40 cases related to false certifications under the initiative's predecessor, the EU-U.S. Safe Harbor program.
Those actions continued once Safe Harbor evolved into the Privacy Shield. This June, for example, the FTC announced a settlement with a background screening company who claimed false certification.
Myriah Jaworski, a certified information privacy professional at Beckage, indicated that the FTC wasn't exercising its authority in a particularly novel way, but may be attempting to draw more attention to those efforts.
"I think that the FCC is branding itself as the United States supervisory authority, where it's trying to sort of capture the public's perception of it as being a consumer data watchdog," Jaworski said.
Companies who catch the attention of said watchdog may potentially be exposing their partners overseas to GDPR-related liabilities. Even if an EU company was unaware that their American collaborator's shield credentials were false, Shonka pointed out that a list of certified entities is readily available online.
In other words, regulators could be disinclined to view ignorance as a suitable excuse, commencing a set of legal difficulties that could eventually rebound back onto American partners.
"There very well could be a breach of contract in there too if a company didn't 't know their partners were not certified," Shonka said.
If that all sounds very complicated, get used to it. The GDPR and the FTC don't appear to be disentangling themselves any time soon, especially considering the latter's capacity as a consumer protection agency in a cultural climate increasingly subsumed with talk of privacy or even a national American privacy law.
Companies looking to both appease consumer concerns and retain business opportunities in EU countries are folding GDPR principles into their privacy practices. However, Jaworski said there may sometimes be a gap between placing those policies on paper and actually following them in everyday business practices.
"I think that to the extent the FTC determines that it will be sort of like the supervisory authority to the U.S., then we will likely see it acting in this realm. I wouldn't be surprised or I would anticipate [the] FTC enforcement of GDPR promises made in privacy policies," Jaworski said.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllThe FTC's Rebecca Slaughter Wants Fair Competition, and a Good Night's Sleep
'Rocket Docket': EDVA Judge Controls Google's Fate in Ad Tech Monopoly Trial
4 minute readAlabama Man Arrested After Causing Bitcoin Price to Surge, Then Plummet After Fake SEC Tweet
3 minute readTrending Stories
- 1Infant Formula Judge Sanctions Kirkland's Jim Hurst: 'Overtly Crossed the Lines'
- 2Trump's Return to the White House: The Legal Industry Reacts
- 3Election 2024: Nationwide Judicial Races and Ballot Measures to Watch
- 4Climate Disputes, International Arbitration, and State Court Limitations for Global Issues
- 5Judicial Face-Off: Navigating the Ethical and Efficient Use of AI in Legal Practice [CLE Pending]
- 6How Much Does the Frequency of Retirement Withdrawals Matter?
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250