California’s BOT Disclosure Law, SB 1001, Now In Effect

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The B.O.T. (“Bolstering Online Transparency”) Act, enacted last year pursuant to SB 1001, has gone into effect in California. As of July 1, it is unlawful for a person or entity to use a bot to communicate or interact online with a person in California in order to incentivize a sale or transaction of goods or services or to influence a vote in an election without disclosing that the communication is via a bot. The law defines a “bot” as “an automated online account where all or substantially all of the actions or posts of that account are not the result of a person.” The required disclosure must be clear, conspicuous, and reasonably designed to inform persons with whom the bot communicates or interacts that it is a bot.

The law is the first of its kind enacted by a state legislature and applies only to communications with persons in California. In addition, it applies only to public-facing Internet Web sites, applications, or social networks that have at least 10 million monthly U.S. visitors or users. While the law contains no private right of action and expressly “does not impose a duty on service providers of online platforms,” failure to abide by the disclosure requirement, as enforced by the Attorney General, may constitute a violation of California’s unfair competition laws and result in fines and equitable remedies.

Texas Amends State Breach Notification Law and Creates Advisor Council to Study Privacy Laws

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Businesses in Texas that own or license computerized data will expect a shortened data breach notification deadline for any breach of sensitive personal information after January 1, 2020. Meanwhile, reporting to state attorney general (“AG”) will become mandatory if more than 250 Texans are involved in a single data breach.

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Further Expansion of Data Security Requirements in FTC Order with LightYear Dealer Technologies

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The FTC has entered into a settlement with LightYear Dealer Technologies, doing business as DealerBuilt, a technology company that develops and sells dealer management system (DMS) software and data processing services to automotive dealerships nationwide. The settlement resolves allegations that DealerBuilt engaged in a number of unreasonable data security practices. The DealerBuilt’s DMS software tracks, manages, and stores information related to all aspects of a dealership’s business, including sales, finance, inventory, accounting, payroll, and parts and service and collects and maintains personal and competitively sensitive information about consumers and employees.

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$3 Million Settlement for Exposure of and Latent Response to Exposure of 300,000 Patients’ Protected Health Information

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Touchstone Medical Imaging (Touchstone) and the Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) entered into a no-fault settlement and two-year corrective action plan (CAP) to settle potential violations of the Health Insurance Portability and Accountability Act (HIPAA).

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FBI Releases 2018 Internet Crime Report

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On April 22, 2019, the FBI’s Internet Crime Complaint Center (“IC3”) released its Internet Crime Report (the “Report”) for 2018. IC3 issues the Report annually as a means to highlight data and identify key trends about Internet crimes.

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SEC Issues Risk Alert Regarding Reg S-P, Privacy, Safeguarding, and Registrant Compliance

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The SEC’s OCIE recently issued a Risk Alert focusing on compliance issues related to Regulation S-P, the primary SEC rule governing compliance practices for privacy notices and safeguard policies for investment advisers and broker-dealers. The Risk Alert summarizes the OCIE’s findings from two-year’s worth of issues identified in deficiency letters to assist investment advisers and broker-dealers in adopting and implementing effective policies and procedures for safeguarding customer records and information pursuant to Regulation S-P.

In this alert, partner Jim Lundy outlines the Regulation S-P requirements, the OCIE’s Regulation S-P findings and key takeaways for SEC registrants.

Read the full alert.

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