Category: USA

Cancer Care Organization settles for 2.3 Mio $ after Data Breach

22. December 2017

In 2015, a data breach occurred at 21st Century Oncology  (21stCO), one of the leading providers of cancer care services in the USA, potentially affecting names, social security numbers, medical diagnoses and health insurance information of at least 2.2 million patients.

On its website, the provider had announced in 2016 that one of its databases was inappropriately accessed by an unauthorized third party, though an FBI investigation had already detected an attack as early as October 2015. The FBI, however, requested 21stCO to delay the notification because of ongoing federal investigations.

21stCO had then stated that ““we continue to work closely with the FBI on its investigation of the intrusion into our system” and “in addition to security measures already in place, we have also taken additional steps to enhance internal security protocols to help prevent a similar incident in the future.” To make amends for the security gap patients had been offered one year of free credit monitoring services.

Nevertheless, the provider now has to pay a fine worth 2.3 million dollars as settled with the Office for Civil Rights (OCR; part of the U.S. Department of Health and Human Services).

It has been accused of not implementing appropriate security measures and procedures to regularly review information system activity such as access or security incident reports, despite the disclosure by the FBI.

The OCR further stated that “the organization also disclosed protected health information to its business associates without having a proper business associate agreement in place”.

The settlement additionally requires 21stCO to set up a corrective action plan including the appointment of a compliance representative, completion of risk analysis and management, revision of cybersecurity policies, an internal breach reporting plan and overall in-depth IT-security. The organization will, in addition, need to maintain all relevant documents and records for six years, so the OCR can inspect and copy the documents if necessary.

Following the settlement, District Attorney Stephen Muldrow stated “we appreciate that 21st Century Oncology self-reported a major fraud affecting Medicare, and we are also pleased that the company has agreed to accept financial responsibility for past compliance failures.”

New and surprising password guidelines released by NIST

21. December 2017

The National Institute of Standards and Technology (NIST), a non-regulatory federal agency within the U.S. Department of Commerce that promotes innovation and industrial competitiveness often by recommending best practices in matters of security, has released its Digital Identity Guidelines uttering advice for user password management.

Considering that Bill Burr, the pioneer of password management, has admitted regretting his recommendations in a publication back in 2003, the NIST is taking appropriate action by revising wide-spread practices.

For over a decade, people were encouraged to create complex passwords with capital letters, numbers and „obscure“ characters – along with frequent changes.

Research has now shown that these requirements don’t necessarily improve the level of security, but instead might even make it easier for hackers to crack the code as people tend to make minor changes when they have to change their already complex password – usually pressed for time.

This is why the NIST is now recommending to let go of periodic password change requirements alongside of algorithmic complexity.

Rather than holding on to these practices, the experts emphasize the importance of password length. The NIST states, that „password length has been found to be a primary factor in characterizing password strength. Passwords that are too short yield to brute force attacks as well as to dictionary attacks using words and commonly chosen passwords.“

It takes years for computers to figure out passwords with 20 or more characters as long as the password is not commonly used.

The NIST advises to screen new passwords against specific lists: „For example, the list may include, but is not limited to passwords obtained from previous breach corpuses, dictionary words, repetitive or sequential characters (e.g. ‘aaaaaa’, ‚1234abcd’), context-specific words, such as the name of the service, the username, and derivatives thereof.“

Subsequently, the NIST completely abandons its own suggestions and causes great relief for industries all over:

„Length and complexity requirements beyond those recommended here significantly increase the difficulty of memorized secrets and increase user frustration. As a result, users often work around these restrictions in a way that is counterproductive. Furthermore, other mitigations such as blacklists, secure hashed storage, and rate limiting are more effective at preventing modern brute-force attacks. Therefore, no additional complexity requirements are imposed.“

French Data Protection Commission threatens WhatsApp with sanctions

The French National Data Protection Commission (CNIL) has found violations of the French Data Protection Act in the course of an investigation conducted in order to verify compliance of WhatsApps data Transfer to Facebook with legal requirements.

In 2016, WhatsApp had announced to transfer data to Facebook for the purpose of targeted advertising, security and business intelligence (technology-driven process for analyzing data and presenting actionable information to help executives, managers and other corporate end users make informed business decisions).

Immediately after the announcement, the Working Party 29 (an independent European advisory body on data protection and privacy, set up under Article 29 of Directive 95/46/EC; hereinafter referred to as „WP29“) asked the company to stop the data transfer for targeted advertising as French law doesn’t provide an adequate legal basis.

„While the security purpose seems to be essential to the efficient functioning of the application, it is not the case for the “business intelligence” purpose which aims at improving performances and optimizing the use of the application through the analysis of its users’ behavior.“

In the wake of the request, WhatsApp had assured the CNIL that it does not process the data of French users for such purposes.

However, the CNIL currently not only came to the result that the users’ consent was not validly collected as it lacked two essential aspects of data protection law: specific function and free choice. But it also denies a legitimate interest when it comes to preserving fundamental rights of users based on the fact that the application cannot be used if the data subjects refuse to allow the processing.

WhatsApp has been asked to provide a sample of the French users’ data transferred to Facebook, but refused to do so because being located in die United States, „it considers that it is only subject to the legislation of this country.“

The inspecting CNIL thus has issued a formal notice to WhatsApp and again requested to comply with the requirements within one month and states:

„Should WhatsApp fail to comply with the formal notice within the specified timescale, the Chair may appoint an internal investigator, who may draw up a report proposing that the CNIL’s restricted committee responsible for examining breaches of the Data Protection Act issue a sanction against the company.“

 

WP29 releases opinion on joint review of Privacy Shield

11. December 2017

The Working Party 29 (WP29),  an independent European advisory body on data protection and privacy, has evaluated the Privacy Shield agreement  (framework for transatlantic exchanges of personal data for commercial purposes between the European Union and the United States, see also our report on One year of Privacy Shield).

In its joint review, the WP29 focusses on the assessment of commercial aspects and governmental access to personal data for national security purposes.

Though acknowledging progress, the WP29 still finds unresolved issues on both sides.

It criticizes the lack of guidance and clear information on the principles of the Privacy Shield, especially with regards to onward transfers, the rights of the data subject and remedies.

The US authorities are further requested to clearly distinguish the status of data processors from that of data controllers.

Another important issue to be tackled is the handling of Human Resource (HR)  data and the rules governing automated-decision making and profiling.

Also, the process of self-certification for companies requires improvement.

In terms of access by public authorities, the WP 29 concludes that the US government has made effort to become more transparent.

However, some of the main concerns still are to be resolved by May 25th, 2018.

The WP 29 calls for further evidence or legally binding commitments to confirm non-discrimination and the fact that authorities don’t get access on a generalized basis to data transferred to the USA from the EU.

Aside from these matters, an Ombudsperson still needs to be appointed and her/his exact powers need to be specified. According to the WP 29, the existing powers to remedy non-compliance are not sufficient.

In case no remedy is brought to these concerns in the given time frames, the members of WP29 will take appropriate action, including bringing the Privacy Shield Adequacy decision to national courts for them to make a reference to the Court of Justice of the European Union (CJEU) for a preliminary ruling.

Uber hid massive data breach

22. November 2017

Uber just admitted that hackers stole personal data of 50 million Uber customers and 7 million drivers. The data breach happened in October 2016, over a year ago, but was only published this week.

The data include names, e-mail addresses, phone numbers and the license numbers of 600.000 drivers. According to Uber neither social security numbers, nor credit card information, or trip location details were taken.

Uber did not disclose the data breach to public, as required by data protection law, but paid the hackers 100.000,00 $ to delete the information. Uber assumes that the data was not used.

Referring to Uber the hackers came in through a badly protected database in a cloud service to the data. Uber security Chief Joe Sullivan and another manager lost their jobs.

This data breach wasn’t the first incident that happened to Uber. Uber has a well-documented history of abusing consumer privacy.

Uber said it has hired Matt Olsen, former general counsel at the National Security Agency and director of the National Counterterrorism Center, as an adviser.  He will help the company restructure its security teams.

Category: Cyber Security · Data Breach · USA
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Irish High Court refers Facebook case to the CJEU

6. October 2017

On October 3rd 2017, the Irish High Court publicised it will refer the Facebook case to the Court of Justice of the European Union (CJEU). The lawsuit is based on a complaint to the Irish Data Protection Commissioner filed by Max Schrems, an Austrian lawyer and privacy activist. Schrems was also involved in the case against Facebook resulting in the CJEU’s landmark decision declaring the Commission’s US Safe Harbour Decision invalid.

In his new complaint, Schrems is challenging the data transfers of Faceook to the US on the basis of the “Model Contracts for the transfer of personal data to third countries”, also known as standard contractual clauses (SCCs). Schrems himself said, “In simple terms, US law requires Facebook to help the NSA with mass surveillance and EU law prohibits just that.”

In contrast to Schrems, the Irish Data Protection Commissioner challenged the validity of the SCCs in general and not only in matters of Facebook. Due to the importance of the case, the Irish High Court referred it to the CJEU. The CJEU will now have to decide whether data transfers to the US are valid on the basis of the Commission’s Model Contracts. It remains to be seen what the CJEU will decide and if its decision will have an impact on the Privacy Shield framework.

Credit Bureau Equifax has been hacked

11. September 2017

The consumer credit reporting agency Equifax has been hacked in the middle of May. The operators have noticed the breach much later, on 29th July. The public has learned about the breach just last week on Thursday, 7th September.

The breach potentially affects the sensitive data of approximately 143 million consumers. Data concerned are the consumer’s name, social security numbers, birth dates, addresses and in some cases driver’s license numbers. As well as credit card numbers for 209.000 U.S. consumers and other dispute documents that contained identifying information for 182.000 consumers.

Not only the US is concerned. A hired third-party cybersecurity company also found some residents of the U.K. and Canada.

The Equifax Chairman and CEO Rick Smith announced steps Equifax is taking at the moment to respond on the breach and is working with authorities.

Category: Data Breach · General · USA
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Nationwide: multistate data breach investigation settled by paying $ 5.5 million

11. August 2017

According to Hunton & Williams, on the 9th of August, Nationwide Mutual Insurance Company (“Nationwide”), agreed to pay $ 5.5 million to settle a data breach investigation by attorneys general from 32 states concerning a data breach that exposed personal data of about 1.2 million individuals. They also published the settlement.

In October 2012, Nationwide and its wholly-owned subsidiary Allied Property & Cansualty Insurance Company (“Allied”) experienced a data breach that led to an unauthorized access to and exfiltration of certain personal data of their customers, as well as other consumers. Since Nationwide and Allied provide customers with insurance quotes, inter alia the following personal data are collected: full name, Social Security number, date of birth or credit-related score.

The attorneys general alleged that the data breach occurred when hackers exploited a vulnerability in the companies’ web application hosting software. Further, it is alleged that, after the data was exfiltrated, Nationwide and Allied applied a software patch, that was not previously applied, to address the vulnerability.

Besides the $ 5.5 million Nationwide and Allied agreed to implement a series of steps to update its security practices. Besides other measures that are listed in the settlement a technology officer shall be appointed that should manage and monitor security and software updates to ensure that future patches and other security updates are applied.

Annual Transparency Report released by the US Intelligence

10. May 2017

In April 2017, the Office of the Director of National Intelligence released its fourth annual Statistical Transparency Report Regarding Use of National Security Authorities for calendar year 2016.

The annual Transparency Report provides information (in form of statistics) about how often the US government uses certain national security authorities for surveillance activities. Further, it explains under which legal basis a surveillance has to be performed and names national security authorities (besides the FISA authorities) that are involved, such as the CIA, FBI or the NSA.

It is shown that based on the applied surveillance activity and the purpose of the investigation, U.S.-persons as well as non-U.S.-persons can be targets. Furthermore, it is described which legal prerequisites have to be fulfilled when investigating a target.

For example, the Transparency Report provides information about the number of issued National Security Letters (NSLs) by the Federal Bureau of Investigation (FBI). The number of NSLs slightly decreased compared to last year. However the number of issued NSLs does not contain the number of individuals or organisations that are the subjects of the NSLs.

During an investigation, personal data may be collected for example telephone numbers or email addresses.

 

New genetic testing law launch – USA

30. March 2017

The “Süddeutsche Zeitung” has reported that in the US, under the exclusion of the public, a new law on genetic testing was launched. According to this law, workers must submit genetic tests to their employers.
The genetic tests are not based on a voluntary basis, since the company will be allowed to demand genetic tests in the future. Therefore, employees must carry out a genetic test and disclose its results. This can be perceived as a strong intrusion into privacy, since genetic tests should be voluntary and, above all, there shall be no force to publish the results. Likewise according to the European Society of Human Genetics (ESHG).

The law seems to appall not only American geneticists. European scientists also expressed their fears that innovations in the field of bioethics would eventually spread from the USA on Europe, which can lead to the risk of an outreaching intervention into the private sphere of one being. Whether such an action in the European area is actually planned remains not known, however if such a law has to be passed, first the legal review by the supreme courts has to resist. Therefore, it looks like so far there should be nothing to fear about.
Regarding this topic, to prohibit such a genetic testing in the USA, there has already been a law, which was passed in 2008.

However, the interest of companies in such an investigation is undoubted. From then on, companies could get genetic information and therefore decide on the issues regarding their employees. It is clear that a risk-prone employee may be more costly to the company in case of illness. Employers could surely draw logical conclusions out of the results of the tests. These could, for instance, result in a non-renewal or non-adjustment of the employment contract.

One may say that the risk of a disease is not yet a certainty of a real outbreak of the disease. However the concern about the interference in the privacy should still be undoubtedly high.

Category: USA
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