Articles Posted in Internet Law

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Digital currencies have become prevalent around the globe in recent times. There are various enterprises that are involved in the mining process which is now more difficult especially because it needs more computing power. Bitcoin’s price volatility is a major issue which has scared away investors. However, more importantly, are the security and privacy issues.

Digital currencies are usually stored in software or hardware wallets. These wallets allow the owners to store their digital currencies. There are studies that indicate hardware wallets are not as secure since hackers can use malware to intercept communications between the wallet and computer.

Hackers are always after valuable digital currencies. They are constantly trying to figure out a way to steal Bitcoin, or other kinds of cryptocurrencies, in a clandestine manner. For example, in 2014, Mt. Gox was hacked by an anonymous group and 850,000 Bitcoins were extracted without being found. There are other exchanges such as Coinbase, Binance, Kraken, or Gemini which can be targeted by the so-called “bad actors.” The hackers will use the necessary tools and techniques to shut down the major exchanges. These tools or techniques can be DDoS attacks which can cripple the computer network system. These types of attacks have been used to bring down the networks of private and public organizations.

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Predictive policing has been used to calculate and forecast future crimes. Yes, although it sounds quite futuristic, but it has been used by various private and public organizations. The City of Santa Cruz, California was one of the first state governments that tried to implement this technology in an effort to stop crime. Predictive policing works by using machine-learning algorithms to calculate the possibility of future crimes. It uses mathematics and data analytics to evaluate information and make systematic predictions. It can also use artificial intelligence technology to reach the results. However, after some time, its public officials stopped their efforts to prevent racial inequality. Predictive policing raises several legal issues that will be addressed in this article.

First, there could be a problem with negligent police activity. We know that, once access is granted to a database of private or confidential information, it is highly probable that someone will abuse it. In other words, an agent may use that information in the wrong way. The technology has not proven to be effective in the sense that crime can be predicted. So, the police officers may engage in activities that would constitute harassment instead of protecting the public. C.C.P. § 527.6 defines harassment as “unlawful violence, a credible threat of violence, or a knowing and willful course of conduct directed at a specific person that seriously alarms, annoys, or harasses the person, and that serves no legitimate purpose. The course of conduct must be that which would cause a reasonable person to suffer substantial emotional distress, and must actually cause substantial emotional distress to the petitioner.” So far, predictive policing’s technology has not been able to specify who, when, where, what, how, or why future crimes can take place. It has not been able to tell the specific location of the future crime. So, for these reasons, it could be abused that could lead to negligent policing activities.

Second, there could be a problem when the private or confidential information is used to violate someone’s privacy. Invasion of privacy is a cause of action where the plaintiff sues the defendant for violating his or her privacy rights. The elements for public disclosure of private facts are as follows: (1) defendant publicized a matter regarding the private life of the plaintiff; (2) the publicized matter would be highly offensive to a reasonable person; and (3) it is not of legitimate concern to the public. In addition, invasion of privacy may occur if there is an intrusion upon someone’s seclusion. The prima facie elements for this cause of action are: (1) defendant intruded into plaintiff’s private affairs, seclusion, or solitude; and (2) the intrusion was objectionable to a reasonable person.

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Cybersecurity risk management has become a more challenging endeavor recently. It was never an easy task for commercial enterprises, but now that we’re facing a global pandemic and economic recession, there are additional challenges. At this point, most of our personal information is being transmitted and stored on the internet. Third-party cloud service providers have become a useful variable in the equation but they can also become a liability if there is a cybersecurity incident. Therefore, cybersecurity risk management has become more difficult especially since commercial enterprises share personal or confidential information with third parties.

The fact that our personal information is no longer in our possession or control makes cybersecurity risk management more challenging. Now, if, our personal information was stored in one location, and as such, was in one company’s possession, life would have been easier. However, multiple vendors, and third-party service providers gain access to our confidential information. So, the level of liability rises to a different stage since there is additional potential responsibilities that must be managed. In addition, some companies have allowed their employees to work from home and this business model makes it more difficult to manage cybersecurity risks. In other words, remote employees can become the proverbial “weakest link” which can be quite dangerous for the commercial enterprise.

A problem in the cybersecurity risk management formula is that change is never ending. The constant change in technology and law makes it more difficult for companies and their information technology managers to keep up. Our law firm’s cybersecurity lawyers generally recommend working with computer technology experts on a regular basis. This way, they can develop the necessary policies on their networks. They should identify the risks by understanding the cybersecurity rules and regulations. An information technology manager should implement internal and external policies to secure the network which usually holds confidential information. For example, the network should have a secure software or hardware firewall, encryption algorithm, and multi-factor authentication system. The information technology manager should develop and implement regular training sessions for employees.

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Cybersecurity risk management is a key component in avoiding cybersecurity incidents. Our law firm assists clients with breach response plans pursuant to the rules and regulations. An Incident Response Plan (“IRP”) should be carefully created to address cybersecurity incidents. There are strategic challenges with implementing an effective IRP within the organization but there could also be legal challenges. Hence, we encourage clients to implement a cybersecurity framework that can effectively prevent breaches. This can be done by working with qualified legal and computer experts.

We encourage clients to coordinate communications with their employees and representatives. The company’s partners and affiliates should also be aware of the breach notification and prevention protocols. This is especially important if the company has various locations and satellite offices. The company must act quickly when it finds out about a breach so that it can follow the rules and regulations. In fact, the European Union’s General Data Protection Regulation (a/k/a “GDPR”) mandates breach notification to the proper authorities within three days. In addition, in California, the law imposes a 72-hour breach notification obligation under the California Consumer Privacy Act (“CCPA”) which became effective on January 1, 2020.

We encourage clients to develop different types of response plans for various cybersecurity incidents. There are different types of breach that can take place on the computer network. In general, the bad actors compromise the computer network to steal personal information. However, availability attacks have also increased which in essence deny access to the system. For example, installing ransomware on the computers or launching a Distributed Denial of Service (“DDoS”) attack on the computer network can accomplish this task. There could be serious legal consequences if the company cannot properly protect its network which yields private and confidential information – e.g., intellectual property, trade secrets. There are various state, federal, and international laws in this context. For example, the Philippines Data Privacy Act defines a “security incident” as an event or occurrence that affects or tends to affect data protection or may compromise availability, integrity, or confidentiality.

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Smart devices are being sold to consumers and businesses on a regular basis. They include smart phones, smart cars, smart televisions, smart thermostats, smart doorbells, smart bulbs, smart locks, smart watches, smart speakers, smart refrigerators, and other electronic devices. These smart devices can be recording you or collecting personal data without your knowledge or consent.

Privacy in the internet and technology age has become a major concern. This is primarily due to the existence and availability of smart devices which are even referred to as “smart spies” because they can record and transfer personal information to the hackers who use technical flaws to install spyware. This is why it’s important to review the security settings of the smart device on a regular basis. For example, smart televisions are connected to the internet, and if they are hacked into, they can easily be used for nefarious purposes. Smart speakers and digital assistants are listening to voices and that is why they can be a threat source for their users. They are constantly collecting information with or without the user’s knowledge or consent. There may be a way to delete the recently-recorded information by telling the smart device to delete the last conversation but consumers should read the user’s manual to learn about the options.

Smart doorbells, which are part of a home’s security surveillance system, have cameras and are connected to the internet. Therefore, they can be hacked into and used to record activities. For example, Ring has been questioned for sharing video recordings with police departments and third-party service providers such as Facebook and Google without the user’s knowledge or consent. It is important to view the “authorized client devices” feature to understand which device is accessing the account.

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Internet dispute resolution has evolved and become more prevalent in recent years. The internet has offered many advantages when it comes to electronic commercial transactions and communications. It has enabled e-commerce websites to gain access to domestic and foreign customers. Naturally, there could be disputes between the e-commerce websites and their customers, or alternatively, between the customers themselves. These disputes are usually related to contractual rights and responsibilities which can be resolved through alternative dispute resolution – e.g., arbitration, mediation.

Geographic location of the parties can create an impediment for dispute resolution purposes. This is especially true because in most circumstances the parties hire a third-party neutral to review their files and issue a final decision. Internet dispute resolution provides an option to have the parties reach a practical solution even though they may be in different jurisdictions. The parties and their neutral judge can be in geographically different locations and need not meet in person to reach a final decision. This, in and of itself, provides a huge advantage from a logistical point. It also brings down the cost of traveling since they can use videoconferencing technologies.

Technology tools and techniques have provided a relatively stable platform for internet dispute resolution procedures. The software and hardware technologies that are available today allow the neutral judge (e.g., arbitrator, mediator), and interested parties, to effectively participate in the dispute resolution procedure. They can securely send and receive files which may include sensitive or confidential information such as financial information. These technologies are using encryption for security reasons. This way, the parties can have trust and confidence in the process and effectively use it.

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Internet dispute resolution is paramount in the age of technology and innovation. Cyber-negotiation strategies have proved to be effective for online dispute resolution providers. These providers allow the parties to resolve their disputes by submitting settlement offers and negotiating over the internet.

Cyber-mediation and cyber-arbitration are part of the online dispute resolution services. They present certain advantages and disadvantages when compared to traditional mediation and arbitration. For example, online dispute resolution is effective and easy especially since it does not require the parties to travel anywhere. It is less costly and time consuming when compared to the traditional options. However, the disadvantage may be that it is impersonal as the parties do not meet the neutral judge in person. So, in essence, the entire process takes place online and no one has the opportunity to have an in-person meeting.

In most contracts, there is some kind of dispute resolution provision that allows the parties to avoid a formal lawsuit. The provision can include language about a preselection of the service provider the parties have chosen for administering the dispute resolution process. This way, they can agree beforehand that all disputes will be resolved without a formal lawsuit in state or federal court. It is important to note that litigation can be time consuming and expensive and online dispute resolution providers can deliver an alternative option.

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Internet dispute resolution procedures such as arbitration or mediation are necessary when there is an actual case or controversy between the parties. These types of alternative dispute resolution procedures provide a viable option for the parties to solve their legal claims before or during litigation. So, in general, an appointed neutral third party (i.e., arbitrator, mediator) reviews the case and renders a decision with the following caveat: Arbitration is usually a binding process but mediation is not binding between the parties.

Internet disputes arise in several areas such as business transactions that take place between commercial organizations and their customers. They take place during international e-commerce transactions. Internet disputes may also occur between users or subscribers of social media websites. In any event, all kinds of online disputes are taking place which should be addressed and resolved by a qualified neutral third-party – i.e., arbitrator, mediator.

International e-commerce transactions have expanded in recent years especially since there are multiple websites that provide a way to find and order products or services. These e-commerce websites (e.g., Amazon, eBay, Alibaba) sell a variety of products or services to their users or subscribers. So, naturally, there will be problems which is why there should be a fair and efficient resolution system.

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Cybersecurity and privacy rules have changed the private and public sectors’ landscapes. The state and federal rules are changing the ways private and public organizations are managing their operations. These rules are focusing on privacy, security and regulations in all jurisdictions but uniformity is an issue. Therefore, state and federal legislators should ensure uniformity to avoid regulatory and enforcement contradictions.

The State of California has enacted laws to promote cybersecurity within its jurisdiction. For example, Assembly Bill 89 (“AB 89”) was enacted to ensure information sharing should be conducted in a way that protects an individual’s privacy and civil liberties, confidential information, preserves business confidentiality, and enables public officials to detect, investigate, and prevent network security breaches. It has also enacted the California Consumer Privacy Act (“CCPA”) that allows individuals to file a legal action against businesses that fail to implement and maintain reasonable security measures to protect their personal information. Now, “reasonable security measures” may include using a firewall, encryption, and intrusion detection software on their computer networks.

The State of New York has enacted laws to promote cybersecurity within its jurisdiction. For example, it has passed the Stop Hacks and Improve Electronic Data Security Act (“SHIELD Act”) to protect consumers from exposure of private information from cybersecurity attacks. This statute is designed to increase data protection and data breach notification requirements for commercial enterprises. It is meant to hold business organizations responsible for gathering and storing consumer personal information which may include a name, address, telephone number, email address, date-of-birth, and social security number.

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There is a general presumption that workplace privacy does not exist under any circumstances. However, that is not always the case. The state Constitution grants privacy rights and a private right of action to file a lawsuit against employers who violate those rights. It states in relevant part that: “All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, pursuing and obtaining safety, happiness, and privacy.”

The courts have decided that the main issue is whether the employee has a “reasonable expectation of privacy.” So, for example, employers are allowed to monitor internet usage or business email communications. Nevertheless, employers are not permitted to conduct surveillance in bathrooms or locker rooms. An employer may be held liable for disclosing the employee’s termination reasons, arrests, convictions, credit reports, misconduct reports, medical information, or confidential communications.

Employers are usually interested in social media activities of their actual or potential employees. They may review their social media accounts to make hiring decisions. However, California Labor Code § 980 prohibits employers from requesting disclosure of usernames or passwords of social media accounts. It also prohibits employers to require the employees to access personal social media accounts in their presence. California Labor Code § 980 states in relevant part that an employer shall not require or request an employee or applicant for employment to do any of the following:

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