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In recent times, the concern over the distribution of, and access to, users’ data on the web continues due to rising cyber activity. This has lead to an increase in Internet-related class action lawsuits.

What are the different types of class action categories?

One category of class actions relates to the use of internet cookies, which are utilized by websites and applications to obtain information about users’ activities.  These files are saved on a user’s hard drive, so the host server gains access to certain information (e.g., user’s identity and recent transactions). “Zombie cookies” have become a concern leading to class action lawsuits, as they cannot be deleted and lead to online surveillance of users.  Online advertising has also become a source of class action lawsuits, as third-party advertisers have teamed up with websites to use cookies without consent.  As a result, online behavioral advertising is created based on a user’s browsing history in order to create relevant advertisements, which may violate privacy policies.  Another category of class action is brought when a company website violates its own terms of service or privacy policies, sometimes leading to breached databases. The last category has to do with information contained on social media platforms.  As a general matter, user profiles on social media platforms (e.g., LinkedIn, Facebook) yield a large quantity of information.  These social media platforms create user profiles that are shared with third parties such as advertising firms.

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During the course of history, the United States Constitution has been amended in order to achieve the best interests of the nation and citizens. However, technological advancements have posed as obstacles to the changes as internet and human rights have recently become issues.

What is the relation between the Internet and Human Rights?

As of now, approximately 40% of the world’s population has access to the Internet. Because of its extensive reach, the Internet has become a basic component of human life. It encompasses an individual’s freedom of expression, freedom of association, privacy, and other fundamental factors. Civil liberty and human right groups have expressed their concerns regarding the increase in government’s control and power. For example, on April 21, 2015, Senate Bill 1035 was introduced, which seeks to reauthorize Section 215 of the Patriot Act for five additional years. This means that there would be continued data collection and surveillance programs. As such, groups like Human Rights Watch have expressed their concern towards NSA’s violation of privacy rights.

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LastPass is a password management service that allows users to centralize all of their collective passwords under one master password. On June 15, 2015, LastPass announced that it was hacked and user data was compromised in the process.

What was stolen from the LastPass database?

LastPass officials released a statement following the attack proclaiming that the hackers did not steal master passwords, but instead gained access to authentication hashes and/or checksums. These are used in order to verify that the master password is correct upon trying to access an account. The attack also compromised cryptographic salts, password reminders, and user email addresses. Officials are confident that LastPass encryption measures ensure the protection of most users and their master passwords. However, it is also possible that fairly weak master passwords, or ones short in length, were also subject to the attack.

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In general, harassing phone calls are distinguished from unwanted phone calls based on obscene or threatening language used to intimidate or scare the recipient. A phone call must hold malicious intentions in order to be classified as harassment punishable under California state laws.

What makes telephone calls a crime in California?

Under California Penal Code 653m, certain elements of a telephone call can lead to liability for criminal activity. The first element is the act of making a telephone call or electronic communication. This can be done via telephone, smartphone, computer, pager, or recorder, among other communication devices. This means that forms of electronic harassment could include text messages, phone calls, emails, faxes, picture messages, video messages, or voice recordings. A defendant can be accused of violating Penal Code 653m even if he/she was not the one to initiate the call. A violation may exist if he/she requested the electronic communication. The next element is the use of obscene language that is meant to threaten or injure the recipient, his/her family and/or property. This includes repeated calls or communication attempts, regardless of the content. The last element is the intent to harass or annoy a victim. There is no violation if the communication is made with the intention of legitimate business purposes, even though certain business calls might seem as nuisance.

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In general, computer crime is a term that covers a variety of crimes involving internet or computer use that may be prosecuted under state or federal laws. Because of the rise in computer crimes, California state laws include provisions that prohibit these violations. In addition, other states have passed computer crime statutes in order to address this problem.

What is a computer crime?

An individual who accesses a computer, computer system or computer network and alters, destroys, or disrupts any of its parts is considered a perpetrator of computer crime. The charge is selected based upon the intention of unlawful access. Hacking is the breaking into a computer, computer system, or computer network with the purpose of modifying the existing settings under malicious intentions. Unlawful or unauthorized access means that there is trespassing, storing, retrieving, changing, or intercepting computer resources without consent. Viruses, or other contaminants, include, computer code that modify, damage, or destruct electronic information without the owner’s permission. This often disrupts the operations of a computer, computer system, or network. As such, Congress enacted the Computer Fraud and Abuse Act in order to regulate computer fraud and to expand laws against it. This federal statute provides that “whoever knowingly and with intent to defraud, accesses a protected computer without authorization, or exceeds authorized access, and by means of such conduct furthers the intended fraud and obtains anything of value, unless the object of the fraud and the thing obtained consists only of the use of the computer and the value of such use is not more than $5,000 in any 1-year period” shall be punished accordingly.

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On June 1, 2015, the Supreme Court of the United States ruled in favor of Anthony Elonis in Elonis v. United States, regarding free speech limitations as implemented via social media platforms. This ruling was the first time the Supreme Court raised implications of free speech related to social media.

Under what circumstances was Elonis indicted?

Anthony Elonis was convicted on four separate counts for postings on social media, specifically Facebook. The federal statute he was convicted under, 18 U.S.C. § 875(c), states as follows: “Whoever transmits…any communication containing…any threat to injure the person of another, shall be fined under this title or imprisoned not more than five years, or both.” Elonis sparked concern after posting graphic threats involving the rape and murder of his ex-wife, detonation of bombs in the presence of law enforcement, and shooting up an elementary school, all under an alias. Elonis did not dispute that the statements were posted, but declared that they were merely expressions of his frustration. He claimed that the trial court incorrectly instructed the jury on the standard of a “true threat” in which the expressions were interpreted as more serious under the context.

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On June 4, 2015, four million current and former federal employees were informed that China-based hackers were suspected of gaining access to and compromising their personally identifiable information (PII) via a breach of government computer networks. The scope of the attack has allowed it to be described as one of the largest governmental data thefts.

What actions have been taken since the attack?

Directly after the attack, the administration decided to expand the National Security Agency’s internet traffic surveillance, especially in regards to international hackers.  The FBI is currently investigating the attack by looking into the threats posed to the public and private sectors. The Office of Personnel Management (OPM) reported that federal employees will be appropriately notified and given access to credit reports, credit monitoring, identity theft insurance, and recovery services. The OPM is responsible for collecting and processing security clearance forms, which were accessed in the breach. It is possible that the hackers have access to the personal and professional references of the victims. Because of the breadth of the data held by the OPM, the agency is telling individuals to monitor and report unusual activities.

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On May 26, 2015, the Internal Revenue Service (“IRS”) announced that criminals illegally accessed data to retrieve the past tax returns of approximately 100,000 individuals through the IRS website. The criminals managed to use social security numbers, birth dates, street addresses, and “out of wallet” data (e.g., person’s first car, high school mascot.)

How was the personal information accessed?

During the months of February to May, attackers attempted to get access to tax information over 200,000 times through the IRS “Get Transcript” online application, which allows for viewing information from previous returns. The criminals managed to go through many steps of an authentication process to view these previous returns, exploiting data from breaches in the past. Recent breaches of companies like Target, Home Depot, JP Morgan Chase, Sony, and Anthem have allowed for personal information to be easily accessible to hackers. In addition, it is possible for identity thieves to get basic answers to security questions from individuals’ social media accounts and search databases. The IRS proceeded to send $50 million in refunds before detecting the criminal activity.

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As of March 25, 2015, the Securities and Exchange Commission (“SEC”) adopted new rules to update and expand Regulation A. Regulation A+ will allow companies to gain access to funds through crowdfunding. These new rules are mandated by Title IV of the Jumpstart Our Business Startups (JOBS) Act.

What will the new rules do?

The update and expansion of Regulation A to Regulation A+ will allow smaller companies to sell up to $50 million of securities in a 12-month period.  These exemptions, however, are subject to eligibility, disclosure, and reporting requirements. The new rules have created a more effective way to raise capital while attracting and protecting investors. Non-accredited investors will be allowed to annually invest up to ten percent of their income or net worth, depending on which amount is greater. Before the new rules came out, only accredited investors were able to invest in startups through equity crowdfunding. The final rules are referred to as Regulation A+ and are provided in two tiers of offerings based on amount of security offerings over a 12-month period. Both are subject to the same basic requirements and eligibility limits, but differ in registration and qualification offerings.

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The modern day business model is shifting towards cloud computing and Software-as-a-Service (“SaaS”) agreements. This new trend allows customers to treat licensing costs as expenses that can be paid over time. SaaS also provides a solution to bug fixes, glitches, and the updating of licenses simultaneously. With the shift to cloud computing, developers are no longer required to provide a platform on which their own application runs.  However, confusion exists about the differences between software licensing and SaaS agreements.

What is the difference between software licensing and SaaS?

A software-licensing model involves the software company to offer a software program in the form of an electronic download or CD-Rom. This software then must be downloaded, installed, run, and operated on hardware before being used by one or more users. This software may be installed on hardware.  It often offers services like training, maintenance, and technical support. On the contrary, in the SaaS model, the company does not make a physical product. It only makes the product accessible through “the cloud” which acts as a hosting platform. One or more users can still access the product, but it must be done through cloud computing services.  As such, external services are not provided because they are expected to be included as part of the hosting platform’s service and support experience. As a result, SaaS acts as a service subscription model and not a physical product.

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