Privacy Law: Scanning the Legal Horizon...

As our new knowledge-based organizations begin the startup phase, the thought of all of the implications of collecting and storing information may be secondary to raising capital.  However, once you have the core team in place and the business begins to scale, maybe it is time to look over the horizon.

Once you have reached the point in your companies growth curve to consider the hiring of a CFO and even an outside "General Counsel", the regulatory engine must be established within the enterprise.  Today, even the CISO in any major business across the United States has been challenged by rapidly changing digital privacy laws the past two years.

Especially in California, the CalECPA went into effect January 1, 2016 and in general is focused on law enforcement:

The landmark California Electronic Communications Privacy Act bars any state law enforcement agency or other investigative entity from compelling a business to turn over any metadata or digital communications—including emails, texts, documents stored in the cloud—without a warrant. It also requires a warrant to track the location of electronic devices like mobile phones, or to search them.

The simple fact that a company is doing business in the State of California and has employees operating there, puts a significant set of requirements and compliance issues that are top of mind.  This is why you see technology-oriented companies who have their Headquarters based here, developing robust guides for working within federal and state privacy laws.

A "Chief Information Security Officer" is not only charged with protecting the data within a confidentiality, integrity and assurance framework, but also working in tandem with the General Counsel and a Chief Privacy Officer.  The standards and the laws have significant hurdles that also require prudent Operational Risk Management strategies.

Now take all of this into consideration as your begin to plan for implementing an "Insider Threat Program" (InTP) within your organization.  The addition of a Human Resources component, Chief Information Officer and even perhaps 3rd Party Cloud supply chain vendors will all be in play.

So What?

So what is the legal profession in California focused on these days?  Just take a look at the Agenda for a March 2017 event at Berkeley Law:

Cybersecurity Regulatory Enforcement

New regulators, new laws, and new norms are causing cybersecurity responsibilities to proliferate. This discussion will feature insights on how cybersecurity lawyers navigate the growing thicket of information security rules from the perspective of both companies pursued by the FTC and multinationals operating under different legal regimes. It will consider challenges posed by insider breaches and obligations arising from the General Data Protection Regulation.

Practitioners Panel

Privacy practitioners from leading law firms and major online companies will share insights on how to stay afloat in increasingly turbulent waters.

Privacy Award

BCLT is proud to bestow its annual Privacy Award this year on
Susan Freiwald, University of San Francisco Law School
Nicole Ozer, ACLU of California

in recognition of their leadership in securing passage of CalECPA, which establishes the “gold standard” of a judicial warrant for government access to communications, location data and other information about our daily lives.

Keynote: Too Close for Comfort – AI, Cloud Computing, and Privacy 

Recent advances in artificial intelligence, robots, and machine learning are enabled by big data, digital cameras, and cloud computing. These advances open an enormous Pandora’s box in terms of security and privacy. Groundbreaking AI researcher Ken Goldberg will present potential responses, such as a concept for “Respectful Cameras,” a privacy-preserving system for industrial automation. He will explain why claims of an impending “Singularity” are greatly exaggerated and will propose an alternative, “Multiplicity,” where diverse groups of humans work together with diverse groups of machines to innovate and to solve complex problems.

Government Access

With digital evidence central to an increasing number of criminal and foreign intelligence investigations, government demands for access seem to steadily increase. From varying perspectives, this panel will explore emerging issues in government access to data stored with third parties.

Artificial Intelligence and the Right to an Explanation

The General Data Protection Regulation requires that organizations explain to individuals the logic behind decisions rendered by algorithms. This policy is aligned with growing efforts in the machine learning community to improve the interpretability of outputs. This panel will examine a broad range of efforts to address interpretability and potential biases in complex algorithmic systems.

Consent and Contract under EU Data Protection Law

EU privacy regulation continues to have worldwide relevance, especially affecting U.S.-based companies. This session will examine how consumer data can continue to be collected and used given the different approaches in the EU and U.S. to consensual mechanisms for authorizing personal data processing.

The CISO and the entire team of Operational Risk Management professionals at your organization, should be monitoring and creating new strategies to protect the organization.  Scanning the legal horizon on what the new challenges are and how to prepare, is the sign of a sound business strategy.

Startup Strategy: Opportunity of Digital Trust in a New Era...

The startup ecosystem of new ideas for SaaS platforms or mission based digital solutions are becoming evermore robust, in our growing economy.  As a result, Operational Risk professionals are more in demand to help new co-founders adapt to the legal, compliance and consumer transparency requirements, that will soon descend upon them.

It makes sense, that when you are starting a new company you first are focused on the product/mission and who the intended market or user will be.  Yet soon after this is defined and the "Go-to-Market" strategy is in place, there is a tremendous amount of Operational Risk design and implementation of internal capabilities, that will be required.  In just Social Media, here is just one example:

"As social networks continue to mature, they increasingly take on roles they may not have anticipated. Moderating graphic imagery and hate speech, working to address trolling and harassment, and dealing with dissemination of fake news puts companies like Facebook and Twitter in powerful societal positions. Now, Facebook has acknowledged yet another challenge: Keeping your data safe from surveillance. That’s harder than it may sound. When you post something publicly on a social network, anyone can view it—including law enforcement or federal agencies."

Since the dawn of the Internet, new startup companies have been developing algorithms and bots to scour the vast landscape of "data oceans" for relevant content.  As public Internet tools, databases and consumer-oriented web sites were developed for even Blogs (Blogger.com) such as this one, other companies were figuring out how to capture the data content in their searchable systems.

Years later, startups developed ways to develop the API as a new product-set, so that other companies could embed and utilize a set of data or capability and have it more integrated with a new set of functionality or service mission.  What is one company in this category focused on Twitter?  Gnip.com:

"PowerTrack provides customers with the ability to filter a data source’s full firehose, and only receive the data that they or their customers are interested in. This is accomplished by applying Gnip’s PowerTrack filtering language to match Tweets based on a wide variety of attributes, including user attributes, geo-location, language, and many others. Using PowerTrack rules to filter a data source ensures that customers receive all of the data, and only the data they need for your app."

So what?

If you are a startup company that is planning on a pledge to your customers to "Keeping your data safe from surveillance," just as the juggernaut Facebook is also currently doing, you have a tremendous amount of work and new processes/systems to get in place.  You are embarking not only on the steep growth curve of adding new customers and revenue; you are simultaneously under the mandate to help achieve a higher level of "Digital Trust" with those same customers.

Developing the policy alone is only the start.  Here is how Twitter is addressing it:

"To be clear: We prohibit developers using the Public APIs and Gnip data products from allowing law enforcement — or any other entity — to use Twitter data for surveillance purposes. Period. The fact that our Public APIs and Gnip data products provide information that people choose to share publicly does not change our policies in this area. And if developers violate our policies, we will take appropriate action, which can include suspension and termination of access to Twitter’s Public APIs and data products."

How Facebook and Twitter and Snapchat or LinkedIn and all of the hundreds of Social Media companies will scale up enforcement, is now the big question.  Maybe they have the deep pockets and resources to build and operate their "Digital Trust" business unit.  What about the new startup with only 6 or 7 figures in the bank from a seed or even "A" round of funding?

The policy implications and new federal laws being drafted in the United States and the European Union may be good indicators of where the future requirements will be defined for a new startup.  In the EU this week, the G20 finance ministers are converging on the topic of "Cyber Crime" soon after a recent indictment:

"Two intelligence agents from Russia, another G20 member, with masterminding the 2014 theft of 500 million Yahoo accounts. The indictment was the first time U.S. authorities have criminally charged Russian spies for cyber offences including for computer fraud, economic espionage, theft of trade secrets, and wire fraud."

How will the new startup who is focused on addressing transparency, privacy, and surveillance now "Enable Digital Trust of  Global Enterprises."  Here is a glimpse from the latest PwC CEO Survey:

"Yet, if forfeiting people’s trust is a sure-fire route to failure, earning their trust is the single biggest enabler of success. As an example, the progression from assisted to augmented to autonomous intelligence depends on how much consumers and regulators trust machines to operate on their own. That, in turn, depends on whether those who create the machines have the right risk and governance structures, the means to verify and validate their claims independently and the mechanisms to engage effectively with stakeholders."

"In short, trust is an opportunity, not just a risk. Many CEOs recognise as much: 64% think the way their firm manages data will be a differentiating factor in future. These CEOs know that prioritising the human experience in a virtual world entails treating customers with integrity."

Welcome to the new era of achieving Digital Trust...