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Introduction

On December 1, 2010, the Federal Trade Commission (“FTC”) released its highly anticipated consumer privacy protection framework titled “Protecting Consumer Privacy in an Era of Rapid Change” (“Privacy Report”).  A copy of the Privacy Report may be obtained on the FTC website: http://www.ftc.gov/os/2010/12/101201privacyreport.pdf.  The FTC seeks public comment on the proposed privacy framework by January 31, 2011.

The proposed privacy framework has three major components: (1) privacy by design; (2) expansion of consumer choices about how companies collect and use consumer information; and (3) increased transparency of data collection practices.  All three components have already ignited a lively debate among consumer advocates, businesses, advertisers and policy makers.  Although, stated as tasks that a company “should do,” there is worry the FTC could take steps to use its enforcement powers against a non-compliant company.

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For over a year, the news media has reported extensively on proposed rules from the Federal Communications Commission (“FCC”) concerning “net neutrality.”  Today, the FCC released its anticipated order placing “network neutrality” requirements on broadband internet access providers.  In this e-bulletin we provide a background on developments leading up to the FCC’s action, and a brief overview of the order.

Background

The term “network neutrality” refers to the general principle that all content available on the Internet should receive equal precedence, such that Internet Service Providers (“ISPs”) do not discriminate between different types or sources of traffic.

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NEW YORK (AP) – Google Inc., the top Web search provider, said Tuesday it will allocate about $8.5 million to Internet privacy and policy organizations as part of a class action settlement involving its Buzz social hub.

The lawsuit had been filed by users of Google’s free e-mail service, Gmail. In February, Google added a new social hub called Buzz, which let Gmail users track their frequently e-mailed contacts’ status updates and other information shared online. But frequent e-mails don’t necessarily mean people are actually “friends.” The class action suit said Google violated privacy rights by automatically adding Buzz to Gmail without making it clear what information would be shared and with whom.

The settlement acknowledges that Google has made many changes to Buzz to ease privacy concerns. Google is creating an $8.5 million fund, mainly to go to Internet privacy and policy organizations. The company said it will also make additional efforts to teach users about privacy on Buzz.

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NEW YORK (AP) – If you use Facebook to “check in” to your favorite restaurants or shops, you can now expect to see rewards and discounts from companies looking to drum up business and lure in loyal customers.

Facebook is looking to bridge online advertising with people’s offline behavior as it announced a service called “Deals.” It’s an extension of Places, the check-in feature the company unveiled this year. Rising with the explosive growth of smart phones, services based on people’s location help them find coupons, earn quirky merit badges or simply share with friends where they are.

The number of people using such services is still small – just 4 percent of the U.S. Internet population have ever used it and just 1 percent on any given day, according to a survey released Thursday by the Pew Internet and American Life Project.

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Jammie Thomas-Rasset has been dealt another setback in her long-running court battle over sharing 24 songs illegally online. CNet reports that she has lost her latest court battle, with a Minneapolis jury decided that Thomas-Rasset is liable for $1.5 million in copyright infringement damages to Capitol Records. This breaks down to $62,500 per song.

The RIAA was pleased with the decision and said in a statement, “We are again thankful to the jury for its service in this matter and that they recognized the severity of the defendant’s misconduct. Now with three jury decisions behind us along with a clear affirmation of Ms. Thomas-Rasset’s willful liability, it is our hope that she finally accepts responsibility for her actions.”

Thomas-Rasset is expected to appeal the decision. One of her attorneys told CNet, “The fight continues.”

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The Data Security and Breach Notification Act of 2010

To help protect personal information on the Internet and elsewhere, California enacted seminal legislation in 2000, which was significantly strengthened with the passage of SB 1386 in 2002. Since then, other states have enacted similar legislation.

State activity, however, may be preempted by proposed federal legislation. On August 5, 2010, S. 3742, the Data Security and Breach Notification Act of 2010 (the “Act”), the most recent federal effort to preempt state laws on the subject, was introduced by Sen. Mark Pryor (D,AeeArk), chairman of the Subcommittee on Consumer Protection, Product Safety, and Insurance, and co-sponsored by Sen. John D. Rockefeller IV (D,AeeW.Va.), Chairman of the Senate Commerce Committee. Less protective of consumers than California law, among other things, the Act:

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Earlier, a post on this blog noted the jurors in the corruption trial of former Governor Rod Blagojevich had informed the judge they had only reached a decision on two of the 24 charges in the case. Now, the news comes that the jurors have reached a final verdict: on one count only. Jurors have found Rod Blagojevich guilty on one count of lying to federal agents. The judge has decided to declare a mistrial on the remaining 23 counts.

Prosecutors have wasted no time in announcing that they intend to retry Blagojevich and his brother Robert on the other charges. As the Associated Press reported, one of the main charges as yet undecided is whether or not Blagojevich attempted to sell the senate seat vacated by President Obama. The presiding judge in the trial, James Zagel, has set a hearing for Aug. 26 to decide issues regarding the retrial.

The AP reported that the jurors looked wearier than they had during the trial. The single count verdict came after 14 days of deliberations. At one point, the jurors had informed Judge Zagel that they were deadlocked on as many as 11 of the charges. They had also informed the judge that they had reached agreement on two charges, but seemed to have lost their consensus along the way to the jury verdict.

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The Internet has made life easier in so many ways, including the ability to shop and conduct financial transactions online. Of course, just like in the world of bricks and mortar, criminals also lurk in Cyberspace, seeking to steal identities, data and money. While Cyber criminals, of course, are responsible as a matter of criminal and civil law for their own wrongdoing, the question arises as to whether others also can be deemed responsible for the harm suffered as a result of this illegal conduct.

The recent case of Patco Construction Company, Inc. v. People’s United Bank d/b/a Ocean Bank, filed in state court in Maine, tees up this very question for resolution.

Patco alleges that it has been a customer of Ocean Bank. Patco asserts that Ocean Bank failed to fulfill “ones of its most basic obligations, namely, to protect its customers’ funds against theft.”

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Our nation can be threatened not only by physical attacks on terra firma, but also in Cyberspace. Indeed, Cyber attacks could threaten all sorts of mission critical systems.

For this reason, aides to Senator Jay Rockefeller reportedly have been working recently on a revised draft Senate bill that would give the President broad powers in the event of a Cybersecurity emergency, and that apparently would go so far as allowing the President to temporarily seize control over computer networks in the private sector.

This power is akin to the power President Bush exerted when he grounded commercial aircraft in the wake of the September 11, 2001 World Trade Center and Pentagon attacks, according to a reported Senate source.

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Associated Press: India may ask Google and Skype for greater access to encrypted information once it resolves security concerns with BlackBerrys, which are now under threat of a ban, according to a government document and two people familiar with the discussions.

The 2008 terror attacks in Mumbai, which were coordinated with satellite and cell phones, helped prompt a sweeping security review of telecommunications ahead of the Commonwealth Games, to be held in New Delhi in October.

On July 12, officials from India’s Department of Telecommunications met with representatives of three telecom service provider groups to discuss interception and monitoring of encrypted communications by security agencies.

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