Category: Litigation of Data Breaches

1
UK Government publishes new proposed data protection law
2
This is your digital life (of no consent or control): The Australian Information Commissioner takes Facebook to Court
3
You’ve got mail…and lots of it according to the latest OAIC report!
4
You Can’t Throw the (Face)Book at Them: Affected Users Unable to Pursue Damages Claim against Facebook
5
Insufficiency meets Punishment: Polish DPA issues largest fine for Insufficient Security and Organisational Measures
6
Update on the Criminalisation of Non-Consensual Distribution of Intimate Images in WA: Another Conviction in Australia
7
The OAIC engages in more in-depth investigations and stronger exercise of its power
8
PwC’s Enforcement Tracker finds a large increase in fines for privacy breaches in the UK
9
Ratings agency starting to factor in Cyber risk profile
10
Bypassing the Castle Walls: Tactical Exploitation of America’s Vulnerable Grid

UK Government publishes new proposed data protection law

By Claude-Étienne Armingaud, Nóirín McFadden and Keisha Phippen

The UK Government has finally published its highly anticipated Data Protection and Digital Information Bill (the Bill), marking the first significant post-Brexit change to the UK’s data protection regime. Following Brexit, the UK continued following the EU General Data Protection Regulation, incorporated into UK law as the UK GDPR, and the UK implementation of the EU ePrivacy Directive, the Privacy and Electronic Communications Regulations 2003 (PECR), also remained in force.

The Bill is only at the start of the legislative process, and it remains to be seen how it will develop if it is amended during its passage through Parliament, but early indications are that it represents more of an evolution than a revolution in the UK regime. That will come as a relief to businesses that transfer personal data from the EU to the UK, because it reduces the risk that the EU might rescind the UK’s adequacy status.

For a start, the Bill actually preserves the UK GDPR, its enabling legislation the Data Protection Act 2018, and the PECR, because it is drafted as an amending act rather than a completely new legislative instrument. This does not contribute to user-friendliness, as interpreting UK data protection requirements will require a great deal of cross-referencing across texts.

The more eye-catching proposed changes in the Bill include:

  • The inclusion of a list of “legitimate interests” that will automatically qualify as being covered by the lawful basis in UK GDPR Article 6(e).
  • Some limitations on data subject access requests, such as the possibility of refusing “vexatious or excessive” requests.
  • More exemptions from the requirement to obtain consent to cookies.
  • Much higher fees for breach of PECR.

The Bill will now progress through various Parliamentary stages over the coming months in order to become law.

This is your digital life (of no consent or control): The Australian Information Commissioner takes Facebook to Court

By Cameron Abbott, Rob Pulham and Rebecca Gill

In a first for Australia, the Australian Information Commissioner (Commissioner) has launched proceedings in the Federal Court of Australia, seeking penalties against Facebook for serious and/or repeated interferences with privacy. The contraventions relate to the conduct disclosed by the Cambridge Analytica scandal, which involved the This is Your Digital Life app (App). We’ve previously blogged about the App here.

It is unclear how the penalties will be calculated in this proceeding. The penalty rate applicable to the relevant period (being from March 2014 to May 2015) is a maximum of $1.7 million. Some have suggested that fines may be in the billions if the maximum rate is applied to each individual affected as a single “contravention” (with possibly over 300,000 contraventions in total!). This may be fun to calculate, but highly unlikely to be applied in reality.

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You’ve got mail…and lots of it according to the latest OAIC report!

By Cameron Abbott and Michelle Aggromito

With email being one of the most common forms of communication, it’s not surprising that inboxes these days accumulate thousands of emails that, perhaps, aren’t always electronically filed or deleted (not ours of course).

As the Office of the Australian Information Commissioner (OAIC) has indicated in its most recent report on notifications received under the Notifiable Data Breach (NBD) scheme, email accounts are frequently being used for storage, and this raises inherent risk. Yes it’s convenient, but using email to send personal information, such as copies of passports, bank account details and credit card information, can very quickly lose its appeal. If the email account is accessed by a malicious actor through a phishing attack or a rogue employee, the end result can be exploitation of that information for criminal gain.

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You Can’t Throw the (Face)Book at Them: Affected Users Unable to Pursue Damages Claim against Facebook

By Cameron Abbott, Max Evans and James Gray

A US federal judge has ruled that the 29 million Facebook users affected by the September 2018 data breach may not seek damages as a remedy, but can only pursue the enforcement of better security practices at Facebook, according to a report by Reuters. Judge Alsup of the US District Court stated that Facebook’s repetitive losses of users’ privacy indicated a long-term need for supervision, which comes in addition to prior judgment which indicated that Facebook’s views about user’s privacy expectations were “so wrong”.

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Insufficiency meets Punishment: Polish DPA issues largest fine for Insufficient Security and Organisational Measures

By Cameron Abbott and Max Evans

Further to the Facebook and Tesco scandals, and the apparent statistic increase of enforcement fines issued, the Polish Data Protection Authority has issued a landmark fine of €645,000 against online retail company morele.net for insufficient security and organisational measures violating data confidentiality and integrity principles prescribed in the EU’s General Data Protection Regulation.

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Update on the Criminalisation of Non-Consensual Distribution of Intimate Images in WA: Another Conviction in Australia

By Olivia O’Brien, Philip Murray and Kathleen Weston

Just a few months ago, we published an article on the criminalisation of the non-consensual distribution of intimate images in Western Australia. Only this week, there has been a second successful conviction under the Criminal Law Amendment (Intimate Images) Act 2018 (WA) (WA Act) in the Rockingham Magistrate’s Court.

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The OAIC engages in more in-depth investigations and stronger exercise of its power

By Cameron Abbott, Rob Pulham and Jacqueline Patishman

Following two key data incidents concerning how the Commonwealth Bank of Australia (CBA) handled data, the OAIC has successfully taken court action binding the banking heavyweight to “substantially improve its privacy practices”.

As a quick summary of the incidents, the first incident involved the loss of magnetic storage tapes (which are used to print account statements). These contained historical customer data including customer statements of up to 20 million bank customers. In 2016, the CBA was unable to confirm that the two magnetic tapes were securely disposed of after the scheduled destruction by a supplier.

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PwC’s Enforcement Tracker finds a large increase in fines for privacy breaches in the UK

By Cameron Abbott and Rebecca Gill

PwC’s UK Privacy & Security Enforcement Tracker has found that fines in the UK over data protection law violations totalled £6.5 million in 2018, a £2 million increase from 2017.

The Tracker analysed data protection enforcement actions by the UK Information Commissioner’s Office (ICO), including monetary fines, prosecutions and undertakings. The Tracker shows that the total sum of fines increased from 2017, but the number of ICO enforcements fell to 67 in 2018 from 91 in 2017.

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Ratings agency starting to factor in Cyber risk profile

By Cameron Abbott and Wendy Mansell

A recent report released by Moody’s Investors Services has shed some light on which business sectors are most at risk for cyberattacks.

After assessing 35 broad sectors it was concluded that banks, hospitals, security firms and market infrastructure providers face the highest risk. This was based on levels of vulnerability and the potential impact an attack would have.

The key determinative factor for these sectors is that they all rely strongly on technology and the vital role of confidential information in their operations.

The financial repercussions following a cyberattack in each of these sectors is extremely significant when considering the costs of insurance, penalties, consumer impact, potential litigation costs, R&D and technological impact to name a few.

The financial market is so high risk because of the financial and commercial data it holds and ever increasing fact that its services are being offered digitally, across multiple platforms i.e banking mobile/smart watch apps.

On a similar note because medical records are primarily collected and held in electronic form hospitals are very attractive to hackers given the sensitive nature of the data.

While the industries should not be a shock to the reader, it is important for participants in those industries and for suppliers to those participants to realise the risk profile that attaches to them and have procedures in place reflective of those risk levels.  How one manages these risks in now likely to have indirect cost implications when you see ratings agencies like Moody’s assessing these sorts of areas. 

Bypassing the Castle Walls: Tactical Exploitation of America’s Vulnerable Grid

By Cameron Abbott, Max Evans and Wendy Mansell

A recent Wall Street Journal Report has detailed how America’s utility grid was hacked. The Department of Homeland Security has named Russia as responsible for the overwhelmingly complex and threatening campaign.

The scheme targeted energy companies affiliated with the government and was carried out in a sophisticated manner by initially focusing on small firms within the utility supply chain.

Early techniques involved planting malware on the websites of online publications likely to be read by employees of companies within the energy sector. The hackers would lace the online publications with malicious content allowing them to steal usernames, passwords and infiltrate company systems.

A number of small firms fell victim to these tactics giving the hackers broad access to company networks. Fake emails were subsequently sent out on behalf of the affected firms containing forged and malicious Dropbox links which captured usernames, passwords and other credentials. Further they used fake personas to send emails and pretended to be job seekers, by sending resumes containing tainted attachments to energy companies.

The hackers continued this technique of sending malware emails on behalf of firms until they reached the top of the supply chain. It was reported that on at least 8 occasions the hackers infiltrated companies who had access to the industrial control systems that run the grid.

An alarming aspect was the number of affected companies that remained oblivious of the penetration. The report is a useful description of the variety of methods used to tempt employees to expose their credentials. All too easy to do. These same techniques are regularly used by more pedestrian hackers. Two factor authentication and regular password resets remain measures to limit these threats but so many organisations do not use them.

We repeatedly counsel that employees are the last line of defence for your organisation. Circulating the Report may make an interesting read to remind them of the variety of ways they can be seduced to click an incorrect link.

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