475 posts categorized "Government" Feed

New York State Strengthens Its Data Breach Laws

To help its residents, the State of New York has improved its existing data breach law. Governor Andrew Cuomo signed two bills on July 25th:

"The Governor signed the Stop Hacks and Improve Electronic Data Security - or SHIELD - Act (S.5575B/A.5635), which imposes stronger obligations on businesses handling private data to provide proper notification to affected consumers when there is a security breach. The Governor also signed legislation (A.2374/S.3582) requiring consumer credit reporting agencies to offer identity theft prevention and mitigation services to consumers who have been affected by a security breach of the agency's system."

The Governor's announcement emphasized the importance of the state's laws keeping pace with rapid advances in technology. To address new technologies, the SHIELD Act will provide stronger protections by:

"1) Broadening the scope of information covered under the notification law to include biometric information and email addresses with their corresponding passwords or security questions and answers; 2) Updating the notification requirements and procedures that companies and state entities must follow when there has been a breach of private information; 3) Extending the notification requirement to any person or entity with private information of a New York resident, not just those who conduct business in New York State; 4) Expanding the definition of a data breach to include unauthorized access to private information; and 5) Creating reasonable data security requirements tailored to the size of a business."

The full text of the SHIELD Act legislation is available here. The SHIELD Act will go into effect on March 21, 2020. The announcement also mentioned Equifax:

"In late July 2017, one of the three main credit reporting agencies, Equifax Inc., experienced a major data breach involving personal information, including social security numbers... the company's response was insufficient and it is unacceptable that consumers were left to bear the burden to protect their own identities even though their information was stolen at no fault of their own. On July 22, 2019, Governor Cuomo, the State Department of Financial Services and State Attorney General James announced a $19.2 million settlement with Equifax over the data breach. As part of that settlement, Equifax agreed to provide New York consumers with credit monitoring services and free annual credit reports, and the company will pay restitution to consumers affected by the breach..."

So, it seems that Equifax's breach and data security failures factored into the new legislation. The announcement also explained the new Identity Theft Prevention and Mitigation Services (A.2374/S.3582) legislation:

This legislation establishes the minimal amount of long-term protections to consumers who are affected by a data breach from a credit reporting agency. It requires credit reporting agency that suffers a breach of information containing consumer social security numbers to provide five-year identity theft prevention services, and if applicable, identity theft mitigation services to affected customers. Additionally, the legislation requires credit reporting agencies to inform consumers on credit freezes of a breach of data involving a social security number, and provides consumers with the right to freeze their credit at no cost. The bill... applies to any breach of the security of a consumer credit reporting agency that occurred no more than three years prior to the effective date of this act."

The A.2374/S.3582 bill will go into effect on September 23, 2019. The retroactive coverage of three years is good as it ensures credit reporting agencies with recent data breaches cannot escape responsibility.

Consumer reporting agencies enjoy a unique position as consumers cannot opt out of having their credit reports covered by Experian, Equifax, and TransUnion. Some people would call that corporate welfare. It would be great if consumers had the right to remove their credit reports from credit reporting agencies that practice poor data security with repeated data breaches. Consumers have that right with retail stores -- you can stop shopping at stores with poor data security and multiple data breaches.

In related news, JD Supra reported about proposed legislation:

"... New York City lawmakers have proposed a bill that would make it unlawful for a mobile app developer or telecommunications carrier to share a customer’s location data without an authorized purpose if the data was collected from the customer’s device within the city. The bill broadly defines the term “share” as making “location data available to another person, whether for a fee or otherwise,” suggesting that selling information is unlawful without an authorized purpose such as customer consent. The bill allows for a private right of action, including penalties for violations of $1,000 per violation, with a maximum penalty of $10,000 per day per person whose location data was unlawfully shared, as well as attorney’s fees."

To learn more, read about new data breach legislation in other states this year.


At Least 3 Countries Warn Their Citizens About Travel To The USA

After several mass shooting incidents in the United States, several countries have issued travel warnings for their citizens visiting the United States. Fox 2 Now News in St. Louis reported:

"The Japanese Consul in Detroit on Sunday published an alert that said Japanese nationals "should be aware of the potential for gunfire incidents everywhere in the United States," which it described as "a gun society." Uruguay’s Office of Foreign Ministry issued an advisory Monday saying citizens should "take precaution amid the growing indiscriminatory violence, specifically hate crimes including racism and discrimination" when traveling to the United States. The alert noted that other factors, such as the "indiscriminate possession of firearms by the population" and the "impossibility of authorities to prevent these situations," were among some of the reasons... Uruguay’s warning also suggested avoiding the cities of Detroit, Baltimore and Albuquerque... Venezuela’s Foreign Ministry office also issued a warning to its residents Monday, saying Venezuelans should postpone their travels or exercise caution when traveling as a result of the events in El Paso, Texas, and Dayton, Ohio... The statement from Venezuela cites a Forbes article listing these US cities as places to avoid: "Given all of the above, it is suggested above all to avoid visiting some cities that are among the 20 most dangerous in the world, such as Cleveland, Ohio; Detroit, Michigan; Baltimore, Maryland; St. Louis, Missouri; Oakland, California; Memphis, Tennessee; Birmingham, Alabama; Atlanta Georgia; Stockton, and Buffalo." "

CNN reported:

"In April, the US State Department gave Venezuela its highest travel advisory, Level 4: Do Not Travel, citing crime, civil unrest and the arbitrary arrest and detention of US citizens. Venezuela was ranked as the most dangerous country in the world for the second straight year, according to a Gallup survey in 2018. It is one of 13 countries issued the highest advisory. Uruguay is listed as a Level 2: Exercise Increased Caution on the State Department's travel advisory."

These travel warnings by other countries cannot be good news for the tourism and travel industries in the USA. It makes one wonder how many jobs will be lost, or how many workers will be furloughed, as foreign travelers avoid visits to the USA.

And, this follows a January, 2018 report which found that, "since 2015, the U.S. and Turkey have been the only places among the top dozen global travel destinations to experience a decline in inbound visitors." So, the recent travel warnings are bad news on top of existing bad news.

What are your opinions? If you have heard of another country issuing warnings about travel to the USA, please share that below.


2 Healthcare Software Providers Agree To Settlement With 16 States' Attorneys General To Resolve Charges About 2015 Data Breach

The Attorney General's Office for the State of Arizona announced last month a major settlement agreement with two healthcare software providers: Medical Informatics Engineering Inc. and its subsidiary, NoMoreClipboard, LLC (hereafter, referred to jointly as "MIE") following a massive data breach at MIE in 2015.  The press release by AG Mike Brnovich stated:

"The settlement resolves a bipartisan lawsuit filed by Arizona and 15 other states against MIE relating to a 2015 data breach, which was the first such multistate lawsuit involving claims under the federal Health Insurance Portability and Accountability Act ("HIPAA"). As a result of the settlement, MIE will pay $900,000 to the states, and it has agreed to a comprehensive injunction requiring the implementation of significant data-security improvements."

Medical Informatics Engineering logo The case was filed in the U.S. District Court for the Northern District of Indiana, where MIE is headquartered. States involved in the joint lawsuit and settlement included Arizona, Arkansas, Connecticut, Florida, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Nebraska, North Carolina, Tennessee, West Virginia, and Wisconsin.

The data breach occurred between May 7, 2015, and May 26, 2015, when hackers broke into WebChart, a web application by MIE and stole:

"... the electronic Protected Health Information ("ePHI") of more than 3.9 million individuals, including roughly 26,000 Arizonans. Stolen ePHI included names, telephone numbers, mailing addresses, usernames, hashed passwords, security questions and answers, spousal information (name and potentially date of birth), email addresses, dates of birth, Social Security numbers, lab results, health insurance policy information, diagnoses, disability codes, doctors’ names, medical conditions, and children’s names and birth statistics."

The consent order and judgment is available here. Indiana’s share was $174,745.29. Indiana AG Curtis Hill said:

"Hoosier consumers trust us to look out for their interests... Once again, we have acted on their behalf to pursue the appropriate penalties and remedies available under the law. We hope our proactive measures serve to motivate all companies doing business in Indiana to exercise the highest possible ethics and the utmost diligence in making sure their systems are safe and secure."


Aggression Detectors: What They Are, Who Uses Them, And Why

Sound Intelligence logo Like most people, you probably have not heard of "aggression detectors." What are these devices? Who makes them? Who uses these devices and why? What consumers are affected?

To answer these questions, ProPublica explained who makes the devices and why:

"In response to mass shootings, some schools and hospitals are installing microphones equipped with algorithms. The devices purport to identify stress and anger before violence erupts... By deploying surveillance technology in public spaces like hallways and cafeterias, device makers and school officials hope to anticipate and prevent everything from mass shootings to underage smoking... Besides Sound Intelligence, South Korea-based Hanwha Techwin, formerly part of Samsung, makes a similar “scream detection” product that’s been installed in American schools. U.K.-based Audio Analytic used to sell its aggression- and gunshot-detection software to customers in Europe and the United States... Sound Intelligence CEO Derek van der Vorst said security cameras made by Sweden-based Axis Communications account for 90% of the detector’s worldwide sales, with privately held Louroe making up the other 10%... Mounted inconspicuously on the ceiling, Louroe’s smoke-detector-sized microphones measure aggression on a scale from zero to one. Users choose threshold settings. Any time they’re exceeded for long enough, the detector alerts the facility’s security apparatus, either through an existing surveillance system or a text message pinpointing the microphone that picked up the sound..."

Louroe Electronics logo The microphone-equipped sensors have been installed in a variety of industries. The Sound Intelligence website listed prisons, schools, public transportation, banks, healthcare institutes, retail stores, public spaces, and more. Louroe Electronics' site included a similar list plus law enforcement.

The ProPublica article also discussed several key issues. First, sensor accuracy and its own tests:

"... ProPublica’s analysis, as well as the experiences of some U.S. schools and hospitals that have used Sound Intelligence’s aggression detector, suggest that it can be less than reliable. At the heart of the device is what the company calls a machine learning algorithm. Our research found that it tends to equate aggression with rough, strained noises in a relatively high pitch, like [a student's] coughing. A 1994 YouTube clip of abrasive-sounding comedian Gilbert Gottfried ("Is it hot in here or am I crazy?") set off the detector, which analyzes sound but doesn’t take words or meaning into account... Sound Intelligence and Louroe said they prefer whenever possible to fine-tune sensors at each new customer’s location over a period of days or weeks..."

Second, accuracy concerns:

"[Sound Intelligence CEO] Van der Vorst acknowledged that the detector is imperfect and confirmed our finding that it registers rougher tones as aggressive. He said he “guarantees 100%” that the system will at times misconstrue innocent behavior. But he’s more concerned about failing to catch indicators of violence, and he said the system gives schools and other facilities a much-needed early warning system..."

This is interesting and troubling. Sound Intelligence's position seems to suggest that it is okay for sensor to miss-identify innocent persons as aggressive in order to avoid failures to identify truly aggressive persons seeking to do harm. That sounds like the old saying: the ends justify the means. Not good. The harms against innocent persons matters, especially when they are young students.

Yesterday's blog post described a far better corporate approach. Based upon current inaccuracies and biases with the technology, a police body camera assembled an ethics board to help guide its decisions regarding the technology; and then followed that board's recommendations not to implement facial recognition in its devices. When the inaccuracies and biases are resolved, then it would implement facial recognition.

What ethics boards have Sound Intelligence, Louroe, and other aggression detector makers utilized?

Third, the use of aggression detectors raises the issue of notice. Are there physical postings on-site at schools, hospitals, healthcare facilities, and other locations? Notice seems appropriate, especially since almost all entities provide notice (e.g., terms of service, privacy policy) for visitors to their websites.

Fourth, privacy concerns:

"Although a Louroe spokesman said the detector doesn’t intrude on student privacy because it only captures sound patterns deemed aggressive, its microphones allow administrators to record, replay and store those snippets of conversation indefinitely..."

I encourage parents of school-age children to read the entire ProPublica article. Concerned parents may demand explanations by school officials about the surveillance activities and devices used within their children's schools. Teachers may also be concerned. Patients at healthcare facilities may also be concerned.

Concerned persons may seek answers to several issues:

  • The vendor selection process, which aggression detector devices were selected, and why
  • Evidence supporting the accuracy of aggression detectors used
  • The school's/hospital's policy, if it has one, covering surveillance devices; plus any posted notices
  • The treatment and rights of wrongly identified persons (e.g., students, patients,, visitors, staff) by aggression detector devices
  • Approaches by the vendor and school to improve device accuracy for both types of errors: a) wrongly identified persons, and b) failures to identify truly aggressive or threatening persons
  • How long the school and/or vendor archive recorded conversations
  • What persons have access to the archived recordings
  • The data security methods used by the school and by the vendor to prevent unauthorized access and abuse of archived recordings
  • All entities, by name, which the school and/or vendor share archived recordings with

What are your opinions of aggression detectors? Of device inaccuracy? Of the privacy concerns?


Police Body Cam Maker Says It Won't Use Facial Recognition Due To Problems With The Technology

We've all heard of the following three technologies: police body cameras, artificial intelligence, and facial recognition software. Across the nation, some police departments use body cameras.

Do the three technologies go together -- work well together? The Washington Post reported:

"Axon, the country’s biggest seller of police body cameras, announced that it accepts the recommendation of an ethics board and will not use facial recognition in its devices... the company convened the independent board last year to assess the possible consequences and ethical costs of artificial intelligence and facial-recognition software. The board’s first report, published June 27, concluded that “face recognition technology is not currently reliable enough to ethically justify its use” — guidance that Axon plans to follow."

So, a major U.S. corporation assembled an ethics board to guide its activities. Good. That's not something you read about often. Then, the same corporation followed that board's advice. Even better.

Why reject using facial recognition with body cameras? Axon explained in a statement:

"Current face matching technology raises serious ethical concerns. In addition, there are technological limitations to using this technology on body cameras. Consistent with the board's recommendation, Axon will not be commercializing face matching products on our body cameras at this time. We do believe face matching technology deserves further research to better understand and solve for the key issues identified in the report, including evaluating ways to de-bias algorithms as the board recommends. Our AI team will continue to evaluate the state of face recognition technologies and will keep the board informed about our research..."

Two types of inaccuracies occur with facial recognition software: i) persons falsely identified (a/k/a "false positives;" and ii) persons not identified (a/k/a "false negatives) who should have been identified. The ethics board's report provided detailed explanations:

"The truth is that current technology does not perform as well on people of color compared to whites, on women compared to men, or young people compared to older people, to name a few disparities. These disparities exist in both directions — a greater false positive rate and false negative rate."

The ethics board's report also explained the problem of bias:

"One cause of these biases is statistically unrepresentative training data — the face images that engineers use to “train” the face recognition algorithm. These images are unrepresentative for a variety of reasons but in part because of decisions that have been made for decades that have prioritized certain groups at the cost of others. These disparities make real-world face recognition deployment a complete nonstarter for the Board. Until we have something approaching parity, this technology should remain on the shelf. Policing today already exhibits all manner of disparities (particularly racial). In this undeniable context, adding a tool that will exacerbate this disparity would be unacceptable..."

So, well-meaning software engineers can create bias in their algorithms by using sets of images that are not representative of the population. The ethic board's 42-page report titled, "First Report Of The Axon A.I. & Policing Technology Ethics Board" (Adobe PDF; 3.1 Megabytes) listed six general conclusions:

"1: Face recognition technology is not currently reliable enough to ethically justify its use on body-worn cameras. At the least, face recognition technology should not be deployed until the technology performs with far greater accuracy and performs equally well across races, ethnicities, genders, and other identity groups. Whether face recognition on body-worn cameras can ever be ethically justifiable is an issue the Board has begun to discuss in the context of the use cases outlined in Part IV.A, and will take up again if and when these prerequisites are met."

"2: When assessing face recognition algorithms, rather than talking about “accuracy,” we prefer to discuss false positive and false negative rates. Our tolerance for one or the other will depend on the use case."

"3: The Board is unwilling to endorse the development of face recognition technology of any sort that can be completely customized by the user. It strongly prefers a model in which the technologies that are made available are limited in what functions they can perform, so as to prevent misuse by law enforcement."

"4: No jurisdiction should adopt face recognition technology without going through open, transparent, democratic processes, with adequate opportunity for genuinely representative public analysis, input, and objection."

"5: Development of face recognition products should be premised on evidence-based benefits. Unless and until those benefits are clear, there is no need to discuss costs or adoption of any particular product."

"6: When assessing the costs and benefits of potential use cases, one must take into account both the realities of policing in America (and in other jurisdictions) and existing technological limitations."

The board included persons with legal, technology, law enforcement, and civil rights backgrounds; plus members from the affected communities. Axon management listened to the report's conclusions and is following the board's recommendations (emphasis added):

"Respond publicly to this report, including to the Board’s conclusions and recommendations regarding face recognition technology. Commit, based on the concerns raised by the Board, not to proceed with the development of face matching products, including adding such capabilities to body-worn cameras or to Axon Evidence (Evidence.com)... Invest company resources to work, in a transparent manner and in tandem with leading independent researchers, to ensure training data are statistically representative of the appropriate populations and that algorithms work equally well across different populations. Continue to comply with the Board’s Operating Principles, including by involving the Board in the earliest possible stages of new or anticipated products. Work with the Board to produce products and services designed to improve policing transparency and democratic accountability, including by developing products in ways that assure audit trails or that collect information that agencies can release to the public about their use of Axon products..."

Admirable. Encouraging. The Washington Post reported:

"San Francisco in May became the first U.S. city to ban city police and agencies from using facial-recognition software... Somerville, Massachusetts became the second, with other cities, including Berkeley and Oakland, Calif., considering similar measures..."

Clearly, this topic bears monitoring. Consumers and government officials are concerned about accuracy and bias. So, too, are some corporations.

And, more news seems likely. Will other technology companies and local governments utilize similar A.I. ethics boards? Will schools, healthcare facilities, and other customers of surveillance devices demand products with accuracy and without bias supported by evidence?


Digital Jail: How Electronic Monitoring Drives Defendants Into Debt

[Editor's note: today's guest post, by reporters at ProPublica, discusses the convergence of law enforcement, outsourcing, smart devices, surveillance, "offender funded" programs, and "e-gentrification." It is reprinted with permission.]

By Ava Kofman, ProPublica

On Oct. 12, 2018, Daehaun White walked free, or so he thought. A guard handed him shoelaces and the $19 that had been in his pocket at the time of his booking, along with a letter from his public defender. The lanky 19-year-old had been sitting for almost a month in St. Louis’ Medium Security Institution, a city jail known as the Workhouse, after being pulled over for driving some friends around in a stolen Chevy Cavalier. When the police charged him with tampering with a motor vehicle — driving a car without its owner’s consent — and held him overnight, he assumed he would be released by morning. He told the police that he hadn’t known that the Chevy, which a friend had lent him a few hours earlier, was stolen. He had no previous convictions. But the $1,500 he needed for the bond was far beyond what he or his family could afford. It wasn’t until his public defender, Erika Wurst, persuaded the judge to lower the amount to $500 cash, and a nonprofit fund, the Bail Project, paid it for him, that he was able to leave the notoriously grim jail. “Once they said I was getting released, I was so excited I stopped listening,” he told me recently. He would no longer have to drink water blackened with mold or share a cell with rats, mice and cockroaches. He did a round of victory pushups and gave away all of the snack cakes he had been saving from the cafeteria.

Emass logo When he finally read Wurst’s letter, however, he realized there was a catch. Even though Wurst had argued against it, the judge, Nicole Colbert-Botchway, had ordered him to wear an ankle monitor that would track his location at every moment using GPS. For as long as he would wear it, he would be required to pay $10 a day to a private company, Eastern Missouri Alternative Sentencing Services, or EMASS. Just to get the monitor attached, he would have to report to EMASS and pay $300 up front — enough to cover the first 25 days, plus a $50 installation fee.

White didn’t know how to find that kind of money. Before his arrest, he was earning minimum wage as a temp, wrapping up boxes of shampoo. His father was largely absent, and his mother, Lakisha Thompson, had recently lost her job as the housekeeping manager at a Holiday Inn. Raising Daehaun and his four siblings, she had struggled to keep up with the bills. The family bounced between houses and apartments in northern St. Louis County, where, as a result of Jim Crow redlining, most of the area’s black population lives. In 2014, they were living on Canfield Drive in Ferguson when Michael Brown was shot and killed there by a police officer. During the ensuing turmoil, Thompson moved the family to Green Bay, Wisconsin. White felt out of place. He was looked down on for his sagging pants, called the N-word when riding his bike. After six months, he moved back to St. Louis County on his own to live with three of his siblings and stepsiblings in a gray house with vinyl siding.

When White got home on the night of his release, he was so overwhelmed to see his family again that he forgot about the letter. He spent the next few days hanging out with his siblings, his mother, who had returned to Missouri earlier that year, and his girlfriend, Demetria, who was seven months pregnant. He didn’t report to EMASS.

What he didn’t realize was that he had failed to meet a deadline. Typically, defendants assigned to monitors must pay EMASS in person and have the device installed within 24 hours of their release from jail. Otherwise, they have to return to court to explain why they’ve violated the judge’s orders. White, however, wasn’t called back for a hearing. Instead, a week after he left the Workhouse, Colbert-Botchway issued a warrant for his arrest.

Three days later, a large group of police officers knocked on Thompson’s door, looking for information about an unrelated case, a robbery. White and his brother had been making dinner with their mother, and the officers asked them for identification. White’s name matched the warrant issued by Colbert-Botchway. “They didn’t tell me what the warrant was for,” he said. “Just that it was for a violation of my release.” He was taken downtown and held for transfer back to the Workhouse. “I kept saying to myself, ’Why am I locked up?’” he recalled.

The next morning, Thompson called the courthouse to find the answer. She learned that her son had been jailed over his failure to acquire and pay for his GPS monitor. To get him out, she needed to pay EMASS on his behalf.

This seemed absurd to her. When Daehaun was 13, she had worn an ankle monitor after violating probation for a minor theft, but the state hadn’t required her to cover the cost of her own supervision. “This is a 19-year-old coming out of the Workhouse,” she told me recently. “There’s no way he has $300 saved.” Thompson felt that the court was forcing her to choose between getting White out of jail and supporting the rest of her family.

Over the past half-century, the number of people behind bars in the United States jumped by more than 500%, to 2.2 million. This extraordinary rise, often attributed to decades of “tough on crime” policies and harsh sentencing laws, has ensured that even as crime rates have dropped since the 1990s, the number of people locked up and the average length of their stay have increased. According to the Bureau of Justice Statistics, the cost of keeping people in jails and prisons soared to $87 billion in 2015 from $19 billion in 1980, in current dollars.

In recent years, politicians on both sides of the aisle have joined criminal-justice reformers in recognizing mass incarceration as both a moral outrage and a fiscal sinkhole. As ankle bracelets have become compact and cost-effective, legislators have embraced them as an enlightened alternative. More than 125,000 people in the criminal-justice system were supervised with monitors in 2015, compared with just 53,000 people in 2005, according to the Pew Charitable Trusts. Although no current national tally is available, data from several cities — Austin, Texas; Indianapolis; Chicago; and San Francisco — show that this number continues to rise. Last December, the First Step Act, which includes provisions for home detention, was signed into law by President Donald Trump with support from the private prison giants GEO Group and CoreCivic. These corporations dominate the so-called community-corrections market — services such as day-reporting and electronic monitoring — that represents one of the fastest-growing revenue sectors of their industry.

By far the most decisive factor promoting the expansion of monitors is the financial one. The United States government pays for monitors for some of those in the federal criminal-justice system and for tens of thousands of immigrants supervised by Immigration and Customs Enforcement. But states and cities, which incur around 90% of the expenditures for jails and prisons, are increasingly passing the financial burden of the devices onto those who wear them. It costs St. Louis roughly $90 a day to detain a person awaiting trial in the Workhouse, where in 2017 the average stay was 291 days. When individuals pay EMASS $10 a day for their own supervision, it costs the city nothing. A 2014 study by NPR and the Brennan Center found that, with the exception of Hawaii, every state required people to pay at least part of the costs associated with GPS monitoring. Some probation offices and sheriffs run their own monitoring programs — renting the equipment from manufacturers, hiring staff and collecting fees directly from participants. Others have outsourced the supervision of defendants, parolees and probationers to private companies.

“There are a lot of judges who reflexively put people on monitors, without making much of a pretense of seriously weighing it at all,” said Chris Albin-Lackey, a senior legal adviser with Human Rights Watch who has researched private-supervision companies. “The limiting factor is the cost it might impose on the public, but when that expense is sourced out, even that minimal brake on judicial discretion goes out the window.”

Nowhere is the pressure to adopt monitors more pronounced than in places like St. Louis: cash-strapped municipalities with large populations of people awaiting trial. Nationwide on any given day, half a million people sit in crowded and expensive jails because, like Daehaun White, they cannot purchase their freedom.

As the movement to overhaul cash bail has challenged the constitutionality of jailing these defendants, judges and sheriffs have turned to monitors as an appealing substitute. In San Francisco, the number of people released from jail onto electronic monitors tripled after a 2018 ruling forced courts to release more defendants without bail. In Marion County, Indiana, where jail overcrowding is routine, roughly 5,000 defendants were put on monitors last year. “You would be hard-pressed to find bail-reform legislation in any state that does not include the possibility of electronic monitoring,” said Robin Steinberg, the chief executive of the Bail Project.

Yet like the system of wealth-based detention they are meant to help reform, ankle monitors often place poor people in special jeopardy. Across the country, defendants who have not been convicted of a crime are put on “offender funded” payment plans for monitors that sometimes cost more than their bail. And unlike bail, they don’t get the payment back, even if they’re found innocent. Although a federal survey shows that nearly 40% of Americans would have trouble finding $400 to cover an emergency, companies and courts routinely threaten to lock up defendants if they fall behind on payment. In Greenville, South Carolina, pretrial defendants can be sent back to jail when they fall three weeks behind on fees. (An officer for the Greenville County Detention Center defended this practice on the grounds that participants agree to the costs in advance.) In Mohave County, Arizona, pretrial defendants charged with sex offenses have faced rearrest if they fail to pay for their monitors, even if they prove that they can’t afford them. “We risk replacing an unjust cash-bail system,” Steinberg said, “with one just as unfair, inhumane and unnecessary.”

Many local judges, including in St. Louis, do not conduct hearings on a defendant’s ability to pay for private supervision before assigning them to it; those who do often overestimate poor people’s financial means. Without judicial oversight, defendants are vulnerable to private-supervision companies that set their own rates and charge interest when someone can’t pay up front. Some companies even give their employees bonuses for hitting collection targets.

It’s not only debt that can send defendants back to jail. People who may not otherwise be candidates for incarceration can be punished for breaking the lifestyle rules that come with the devices. A survey in California found that juveniles awaiting trial or on probation face especially difficult rules; in one county, juveniles on monitors were asked to follow more than 50 restrictions, including not participating “in any social activity.” For this reason, many advocates describe electronic monitoring as a “net-widener": Far from serving as an alternative to incarceration, it ends up sweeping more people into the system.

Dressed in a baggy yellow City of St. Louis Corrections shirt, White was walking to the van that would take him back to the Workhouse after his rearrest, when a guard called his name and handed him a bus ticket home. A few hours earlier, his mom had persuaded her sister to lend her the $300 that White owed EMASS. Wurst, his public defender, brought the receipt to court.

The next afternoon, White hitched a ride downtown to the EMASS office, where one of the company’s bond-compliance officers, Nick Buss, clipped a black box around his left ankle. Based in the majority white city of St. Charles, west of St. Louis, EMASS has several field offices throughout eastern Missouri. A former probation and parole officer, Michael Smith, founded the company in 1991 after Missouri became one of the first states to allow private companies to supervise some probationers. (Smith and other EMASS officials declined to comment for this story.)

The St. Louis area has made national headlines for its “offender funded” model of policing and punishment. Stricken by postindustrial decline and the 2008 financial crisis, its municipalities turned to their police departments and courts to make up for shortfalls in revenue. In 2015, the Ferguson Report by the United States Department of Justice put hard numbers to what black residents had long suspected: The police were targeting them with disproportionate arrests, traffic tickets and excessive fines.

EMASS may have saved the city some money, but it also created an extraordinary and arbitrary-seeming new expense for poor defendants. When cities cover the cost of monitoring, they often pay private contractors $2 to $3 a day for the same equipment and services for which EMASS charges defendants $10 a day. To come up with the money, EMASS clients told me, they had to find second jobs, take their children out of day care and cut into disability checks. Others hurried to plead guilty for no better reason than that being on probation was cheaper than paying for a monitor.

At the downtown office, White signed a contract stating that he would charge his monitor for an hour and a half each day and “report” to EMASS with $70 each week. He could shower, but was not to bathe or swim (the monitor is water-resistant, not waterproof). Interfering with the monitor’s functioning was a felony.

White assumed that GPS supervision would prove a minor annoyance. Instead, it was a constant burden. The box was bulky and the size of a fist, so he couldn’t hide it under his jeans. Whenever he left the house, people stared. There were snide comments ("nice bracelet") and cutting jokes. His brothers teased him about having a babysitter. “I’m nobody to watch,” he insisted.

The biggest problem was finding work. Confident and outgoing, White had never struggled to land jobs; after dropping out of high school in his junior year, he flipped burgers at McDonald’s and Steak ’n Shake. To pay for the monitor, he applied to be a custodian at Julia Davis Library, a cashier at Home Depot, a clerk at Menards. The conversation at Home Depot had gone especially well, White thought, until the interviewer casually asked what was on his leg.

To help improve his chances, he enrolled in Mission: St. Louis, a job-training center for people reentering society. One afternoon in January, he and a classmate role-played how to talk to potential employers about criminal charges. White didn’t know how much detail to go into. Should he tell interviewers that he was bringing his pregnant girlfriend some snacks when he was pulled over? He still isn’t sure, because a police officer came looking for him midway through the class. The battery on his monitor had died. The officer sent him home, and White missed the rest of the lesson.

With all of the restrictions and rules, keeping a job on a monitor can be as difficult as finding one. The hours for weekly check-ins at the downtown EMASS office — 1 p.m. to 6 p.m. on Tuesdays and Wednesdays, and 1 p.m. until 5 p.m. on Mondays — are inconvenient for those who work. In 2011, the National Institute of Justice surveyed 5,000 people on electronic monitors and found that 22% said they had been fired or asked to leave a job because of the device. Juawanna Caves, a young St. Louis native and mother of two, was placed on a monitor in December after being charged with unlawful use of a weapon. She said she stopped showing up to work as a housekeeper when her co-workers made her uncomfortable by asking questions and later lost a job at a nursing home because too many exceptions had to be made for her court dates and EMASS check-ins.

Perpetual surveillance also takes a mental toll. Nearly everyone I spoke to who wore a monitor described feeling trapped, as though they were serving a sentence before they had even gone to trial. White was never really sure about what he could or couldn’t do under supervision. In January, when his girlfriend had their daughter, Rylan, White left the hospital shortly after the birth, under the impression that he had a midnight curfew. Later that night, he let his monitor die so that he could sneak back before sunrise to see the baby again.

EMASS makes its money from defendants. But it gets its power over them from judges. It was in 2012 that the judges of the St. Louis court started to use the company’s services — which previously involved people on probation for misdemeanors — for defendants awaiting trial. Last year, the company supervised 239 defendants in the city of St. Louis on GPS monitors, according to numbers provided by EMASS to the court. The alliance with the courts gives the company not just a steady stream of business but a reliable means of recouping debts: Unlike, say, a credit-card company, which must file a civil suit to collect from overdue customers, EMASS can initiate criminal-court proceedings, threatening defendants with another stay in the Workhouse.

In early April, I visited Judge Rex Burlison in his chambers on the 10th floor of the St. Louis civil courts building. A few months earlier, Burlison, who has short gray hair and light blue eyes, had been elected by his peers as presiding judge, overseeing the city’s docket, budget and operations, including the contract with EMASS. It was one of the first warm days of the year, and from the office window I could see sunlight glimmering on the silver Gateway Arch.

I asked Burlison about the court’s philosophy for using pretrial GPS. He stressed that while each case was unique and subject to the judge’s discretion, monitoring was most commonly used for defendants who posed a flight risk, endangered public safety or had an alleged victim. Judges vary in how often they order defendants to wear monitors, and critics have attacked the inconsistency. Colbert-Botchway, the judge who put White on a monitor, regularly made pretrial GPS a condition of release, according to public defenders. (Colbert-Botchway declined to comment.) But another St. Louis city judge, David Roither, told me, “I really don’t use it very often because people here are too poor to pay for it.”

Whenever a defendant on a monitor violates a condition of release, whether related to payment or a curfew or something else, EMASS sends a letter to the court. Last year, Burlison said, the court received two to three letters a week from EMASS about violations. In response, the judge usually calls the defendant in for a hearing. As far as he knew, Burlison said, judges did not incarcerate people simply for failing to pay EMASS debts. “Why would you?” he asked me. When people were put back in jail, he said, there were always other factors at play, like the defendant’s missing a hearing, for instance. (Issuing a warrant for White’s arrest without a hearing, he acknowledged after looking at the docket, was not the court’s standard practice.)

The contract with EMASS allows the court to assign indigent defendants to the company to oversee “at no cost.” Yet neither Burlison nor any of the other current or former judges I spoke with recalled waiving fees when ordering someone to wear an ankle monitor. When I asked Burlison why he didn’t, he said that he was concerned that if he started to make exceptions on the basis of income, the company might stop providing ankle-monitoring services in St. Louis.

“People get arrested because of life choices,” Burlison said. “Whether they’re good for the charge or not, they’re still arrested and have to deal with it, and part of dealing with it is the finances.” To release defendants without monitors simply because they can’t afford the fee, he said, would be to disregard the safety of their victims or the community. “We can’t just release everybody because they’re poor,” he continued.

But many people in the Workhouse awaiting trial are poor. In January, civil rights groups filed suit against the city and the court, claiming that the St. Louis bail system violated the Constitution, in part by discriminating against those who can’t afford to post bail. That same month, the Missouri Supreme Court announced new rules that urged local courts to consider releasing defendants without monetary conditions and to waive fees for poor people placed on monitors. Shortly before the rules went into effect, on July 1, Burlison said that the city intends to shift the way ankle monitors are distributed and plans to establish a fund to help indigent defendants pay for their ankle bracelets. But he said he didn’t know how much money would be in the fund or whether it was temporary or permanent. The need for funding could grow quickly. The pending bail lawsuit has temporarily spurred the release of more defendants from custody, and as a result, public defenders say, the demand for monitors has increased.

Judges are anxious about what people released without posting bail might do once they get out. Several told me that monitors may ensure that the defendants return to court. Not unlike doctors who order a battery of tests for a mildly ill patient to avoid a potential malpractice suit, judges seem to view monitors as a precaution against their faces appearing on the front page of the newspaper. “Every judge’s fear is to let somebody out on recognizance and he commits murder, and then everyone asks, ’How in the hell was this person let out?’” said Robert Dierker, who served as a judge in St. Louis from 1986 to 2017 and now represents the city in the bail lawsuit. “But with GPS, you can say, ’Well, I have him on GPS, what else can I do?’”

Critics of monitors contend that their public-safety appeal is illusory: If defendants are intent on harming someone or skipping town, the bracelet, which can be easily removed with a pair of scissors, would not stop them. Studies showing that people tracked by GPS appear in court more reliably are scarce, and research about its effectiveness as a deterrent is inconclusive.

“The fundamental question is, What purpose is electronic monitoring serving?” said Blake Strode, the executive director of ArchCity Defenders, a nonprofit civil rights law firm in St. Louis that is one of several firms representing the plaintiffs in the bail lawsuit. “If the only purpose it’s serving is to make judges feel better because they don’t want to be on the hook if something goes wrong, then that’s not a sensible approach. We should not simply be monitoring for monitoring’s sake.”

Electronic monitoring was first conceived in the early 1960s by Ralph and Robert Gable, identical twins studying at Harvard under the psychologists Timothy Leary and B.F. Skinner, respectively. Influenced in part by Skinner’s theories of positive reinforcement, the Gables rigged up some surplus missile-tracking equipment to monitor teenagers on probation; those who showed up at the right places at the right times were rewarded with movie tickets, limo rides and other prizes.

Although this round-the-clock monitoring was intended as a tool for rehabilitation, observers and participants alike soon recognized its potential to enhance surveillance. All but two of the 16 volunteers in their initial study dropped out, finding the two bulky radio transmitters oppressive. “They felt like it was a prosthetic conscience, and who would want Mother all the time along with you?” Robert Gable told me. Psychology Today labeled the invention a “belt from Big Brother.”

The reality of electronic monitoring today is that Big Brother is watching some groups more than others. No national statistics are available on the racial breakdown of Americans wearing ankle monitors, but all indications suggest that mass supervision, like mass incarceration, disproportionately affects black people. In Cook County, Illinois, for instance, black people make up 24% of the population, and 67% of those on monitors. The sociologist Simone Browne has connected contemporary surveillance technologies like GPS monitors to America’s long history of controlling where black people live, move and work. In her 2015 book, “Dark Matters,” she traces the ways in which “surveillance is nothing new to black folks,” from the branding of enslaved people and the shackling of convict laborers to Jim Crow segregation and the home visits of welfare agencies. These historical inequities, Browne notes, influence where and on whom new tools like ankle monitors are imposed.

For some black families, including White’s, monitoring stretches across generations. Annette Taylor, the director of Ripple Effect, an advocacy group for prisoners and their families based in Champaign, Illinois, has seen her ex-husband, brother, son, nephew and sister’s husband wear ankle monitors over the years. She had to wear one herself, about a decade ago, she said, for driving with a suspended license. “You’re making people a prisoner of their home,” she told me. When her son was paroled and placed on house arrest, he couldn’t live with her, because he was forbidden to associate with people convicted of felonies, including his stepfather, who was also on house arrest.

Some people on monitors are further constrained by geographic restrictions — areas in the city or neighborhood that they can’t go without triggering an alarm. James Kilgore, a research scholar at the University of Illinois at Champaign-Urbana, has cautioned that these exclusionary zones could lead to “e-gentrification,” effectively keeping people out of more-prosperous neighborhoods. In 2016, after serving four years in prison for drug conspiracy, Bryan Otero wore a monitor as a condition of parole. He commuted from the Bronx to jobs at a restaurant and a department store in Manhattan, but he couldn’t visit his family or doctor because he was forbidden to enter a swath of Manhattan between 117th Street and 131st Street. “All my family and childhood friends live in that area,” he said. “I grew up there.”

Michelle Alexander, a legal scholar and columnist for The Times, has argued that monitoring engenders a new form of oppression under the guise of progress. In her 2010 book, “The New Jim Crow,” she wrote that the term “mass incarceration” should refer to the “system that locks people not only behind actual bars in actual prisons, but also behind virtual bars and virtual walls — walls that are invisible to the naked eye but function nearly as effectively as Jim Crow laws once did at locking people of color into a permanent second-class citizenship.”

BI Incorporated logo As the cost of monitoring continues to fall, those who are required to submit to it may worry less about the expense and more about the intrusive surveillance. The devices, some of which are equipped with two-way microphones, can give corrections officials unprecedented access to the private lives not just of those monitored but also of their families and friends. GPS location data appeals to the police, who can use it to investigate crimes. Already the goal is both to track what individuals are doing and to anticipate what they might do next. BI Incorporated, an electronic-monitoring subsidiary of GEO Group, has the ability to assign risk scores to the behavioral patterns of those monitored, so that law enforcement can “address potential problems before they happen.” Judges leery of recidivism have begun to embrace risk-assessment tools. As a result, defendants who have yet to be convicted of an offense in court may be categorized by their future chances of reoffending.

The combination of GPS location data with other tracking technologies such as automatic license-plate readers represents an uncharted frontier for finer-grained surveillance. In some cities, police have concentrated these tools in neighborhoods of color. A CityLab investigation found that Baltimore police were more likely to deploy the Stingray — the controversial and secretive cellphone tracking technology — where African Americans lived. In the aftermath of Freddie Gray’s death in 2015, the police spied on Black Lives Matter protesters with face recognition technology. Given this pattern, the term “electronic monitoring” may soon refer not just to a specific piece of equipment but to an all-encompassing strategy.

If the evolution of the criminal-justice system is any guide, it is very likely that the ankle bracelet will go out of fashion. Some GPS monitoring vendors have already started to offer smartphone applications that verify someone’s location through voice and face recognition. These apps, with names like Smart-LINK and Shadowtrack, promise to be cheaper and more convenient than a boxy bracelet. They’re also less visible, mitigating the stigma and normalizing surveillance. While reducing the number of people in physical prison, these seductive applications could, paradoxically, increase its reach. For the nearly 4.5 million Americans on probation or parole, it is not difficult to imagine a virtual prison system as ubiquitous — and invasive — as Instagram or Facebook.

On January 24, exactly three months after White had his monitor installed, his public defender successfully argued in court for its removal. His phone service had been shut off because he had fallen behind on the bill, so his mother told him the good news over video chat.

When White showed up to EMASS a few days later to have the ankle bracelet removed, he said, one of the company’s employees told him that he couldn’t take off his monitor until he paid his debt. White offered him the $35 in his wallet — all the money he had. It wasn’t enough. The employee explained that he needed to pay at least half of the $700 he owed. Somewhere in the contract he had signed months earlier, White had agreed to pay his full balance “at the time of removal.” But as White saw it, the court that had ordered the monitor’s installation was now ordering its removal. Didn’t that count?

“That’s the only thing that’s killing me,” White told me a few weeks later, in early March. “Why are you all not taking it off?” We were in his brother’s room, which, unlike White’s down the hall, had space for a wobbly chair. White sat on the bed, his head resting against the frame, while his brother sat on the other end by the TV, mumbling commands into a headset for the fantasy video game Fortnite. By then, the prosecutor had offered White two to three years of probation in exchange for a plea. (White is waiting to hear if he has been accepted into the city’s diversion program for “youthful offenders,” which would allow him to avoid pleading and wipe the charges from his record in a year.)

White was wearing a loosefitting Nike track jacket and red sweats that bunched up over the top of his monitor. He had recently stopped charging it, and so far, the police hadn’t come knocking. “I don’t even have to have it on,” he said, looking down at his ankle. “But without a job, I can’t get it taken off.” In the last few weeks, he had sold his laptop, his phone and his TV. That cash went to rent, food and his daughter, and what was left barely made a dent in what he owed EMASS.

It was a Monday — a check-in day — but he hadn’t been reporting for the past couple of weeks. He didn’t see the point; he didn’t have the money to get the monitor removed and the office was an hour away by bus. I offered him a ride.

EMASS check-ins take place in a three-story brick building with a low-slung facade draped in ivy. The office doesn’t take cash payments, and a Western Union is conveniently located next door. The other men in the waiting room were also wearing monitors. When it was White’s turn to check-in, Buss, the bond-compliance officer, unclipped the band from his ankle and threw the device into a bin, White said. He wasn’t sure why EMASS had now softened its approach, but his debts nonetheless remained.

Buss calculated the money White owed going back to November: $755, plus 10% annual interest. Over the next nine months, EMASS expected him to make monthly payments that would add up to $850 — more than the court had required for his bond. White looked at the receipt and shook his head. “I get in trouble for living,” he said as he walked out of the office. “For being me.”

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Fracking Companies Lost on Trespassing, but a Court Just Gave Them a Different Win

[Editor's note: today's guest post by ProPublica discusses business practices within the fracking industry. It is reprinted with permission.]

By Ken Ward Jr., The Charleston Gazette-Mail

A week after the West Virginia Supreme Court unanimously upheld the property rights of landowners battling one natural gas giant, the same court tossed out a challenge filed by another group of landowners against a different natural gas company.

In the latest case, decided earlier this month, the court upheld a lower court ruling that threw out a collection of lawsuits alleging dust, traffic and noise from gas operations were creating a nuisance for nearby landowners.

Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia, said the latest ruling lets “Wall Street know capital investment in oil and natural gas is welcome in West Virginia” and increases the possibility of more such investments in drilling and in so-called “downstream” chemical and manufacturing plants related to the gas industry.

In the property rights case last week, the justices set a clear legal standard that natural gas companies can’t trespass on a person’s land, without permission, to tap into gas reserves from neighboring tracts. In Monday’s case, the justices didn’t articulate a new legal precedent.

The mixed messages of the two cases show that “this is new litigation and the theories are evolving,” said Anthony Majestro, a lawyer who represented residents who lost their nuisance action before the Supreme Court.

“As the Marcellus shale drilling has expanded, there have been conflicts between surface owners and the companies that are drilling,” Majestro said. “Absent some legal requirement to require the industry to be good neighbors, I’m afraid we’ll continue to have these situations.”

Majestro’s clients were a group of residents in the Cherry Camp area of Harrison County, in north-central West Virginia. They wanted Antero Resources, the state’s largest gas company, to compensate them for unbearable traffic, “constant dust” that hangs in the air and settles on homes and vehicles, disruptive heavy equipment noise and bright lights that shine into their homes day and night.

The case focused on two dozen wells and a compressor station on six pads. The plaintiffs argued that their lives were being interfered with by Antero’s production of gas from beneath their property, even though the wells were on neighboring land, not on their own properties.

Across West Virginia’s gas-producing region, many residents own the surface of the land where they live, but don’t hold the minerals located beneath. Often, rights to the natural gas were signed over decades ago, long before drilling and gas production of the size and scope now conducted was even dreamed of.

The two court cases were featured last year as part of a series of stories by the Gazette-Mail and ProPublica that explored the impacts of the growth of natural gas on West Virginia communities.

In some ways, the Antero case was more complex than the earlier matter, in which the state court ruled clearly for Doddridge County residents Beth Crowder and David Wentz in their dispute with EQT Corp., West Virginia’s second-largest gas producer.

EQT had built a well pad and pipelines on Crowder and Wentz’s property to reach natural gas not located beneath their farm, but under neighboring tracts, including some that were thousands of feet away. Modern natural gas drilling uses horizontal drilling to use smaller numbers of larger wells to reach much greater amounts of gas.

Justice John Hutchison wrote the court’s 5-0 decision against EQT, including a new point of law that sets a precedent that calls what the company did trespassing and forbids it from being done in the future.

The ruling in the Antero case was a split, 3-2 decision, and the opinion by Justice Evan Jenkins included no new points of law setting precedent for future cases.

Instead, his opinion was based on the view that Antero had gas leases that created a right for it to do whatever was “reasonably necessary” to get at its mineral holdings.

Antero spokeswoman Stephanie Iaquinta said, “We appreciate the court’s thorough review of this important matter and its decision.”

Chief Justice Beth Walker wrote a concurring opinion, pointing out that the majority decision wasn’t necessarily getting to the heart of the matter: whether the kinds of gas industry impacts complained about by the Harrison County residents constitute a legal nuisance.

And Justice Margaret Workman wrote a strongly worded dissent, saying that the court had not only ducked the central legal issue in the case, but that it had usurped the authority of a jury to decide if the facts of how Antero operates should be deemed to be “reasonably necessary” to produce natural gas.

“For a century, the tenor of our mineral easement case law, in each temporal and technological ideation, has been that there must be a balance of the rights of surface owners and mineral owners,” Workman wrote. “Rather than making any attempt to establish legal guidance for that goal in this new context, the majority endorses a gross inequity that effectively gives this new industrialization carte blanche to operate without any regard for the rights of those who live on the land.”

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Several States Strengthened Their Data Breach Notification Laws in 2019

Legislatures in several states are improving their existing data breach notification laws to provide stronger protections for consumers.

To fully appreciate the changes requires an understanding of the current legal status. The National Conference of State Legislatures summarized the current status:

"All 50 states, the District of Columbia, Guam, Puerto Rico and the Virgin Islands have enacted legislation requiring private or governmental entities to notify individuals of security breaches of information involving personally identifiable information. Security breach laws typically have provisions regarding who must comply with the law (e.g., businesses, data/information brokers, government entities, etc.); definitions of “personal information” (e.g., name combined with SSN, drivers license or state ID, account numbers, etc.); what constitutes a breach (e.g., unauthorized acquisition of data); requirements for notice (e.g., timing or method of notice, who must be notified); and exemptions (e.g., for encrypted information)."

The increased legislative activity comes in the aftermath of the massive Equifax breach in 2017 affecting 145.5 million persons. 2018 was a terrible year with more than one billion consumer accounts affected by multiple data breaches.

Many of the improvements across states requires sooner notice to affected persons, so consumers can check their bank/card statements for fraudulent activity, and take other security actions. Without sooner notice, fraud can perpetuate with more money stolen.

Now, the legislative activity in selected states.

First, legislators amended the requirements in the Maryland Personal Information Protection Act (MPIPA), or House Bill 1154. Maryland Governor Larry Hogan approved of the changes, which will go into effect on October 1, 2019. A summary of the changes:

  • Requires businesses that own or license "computerized data that includes personal information of an individual residing in the State" to conduct a good-faith breach investigation to determine data abuse when they discover or are notified of a data breach,
  • Requires notification of affected persons within 45 days, and
  • Requires businesses to maintain records of the breach for three years of its breach investigation and determination that notification of affected persons is not required.

Second, Massachusetts Governor Charlie Baker signed legislation in January which went into effect on April 11, 2019. Changes in the new law: no fees for consumers to place, lift, or remove Security Freezes; credit monitoring required when Social Security numbers disclosed during the breach; and an expanded list of requirements when businesses provide notice to the Massachusetts Attorney General and to the Massachusetts Office of Consumer Affairs and Business Regulation (OCABR).

Third, New Jersey amended its breach law. SC Magazine summarized the changes:

"The new law expands the definition of what constitutes personal information that, if exposed in a breach, would require a company to issue a notification. Once S-52 takes effect on Sept. 1, 2019, personal information will also include a “user name, email address, or any other account holder identifying information, in combination with any password or security questions and answer…” the law states."

Fourth, Oregon Governor Kate Brown signed into law Senate Bill 684 on May 24, 2019. The JD Supra site reported:

"The most significant changes are around service providers, who will take on an independent obligation to notify the state Attorney General (AG) about data security breaches. A handful of other, more subtle changes are also included in the amendments, which take effect January 1, 2020... The obligation that service providers notify the AG is triggered by breaches affecting the personal information of over 250 Oregon consumers, or when the number cannot be determined... The new obligation increases the number of parties involved in incident response and notice decisions... This round of amendments adds user names, combined with password or other means of authentication, to the list of notice-triggering personal information... One other amendment also touches service providers. Where previously service providers had to notify business customers “as soon as practicable” after discovering a breach, the amendments set a deadline of 10 days."

Many companies outsource back-office work to vendors. So, the Oregon law keeps pace with common business practices. Readers wanting to learn more can read this blog's Outsourcing section.

A new, separate bill in Oregon covers internet-connected devices, also called the Internet of Things (IoT). Many consumers have installed IoT devices in their homes. According to JD Supra:

"The Oregon connected device security law is largely consistent with California’s new connected device security law, and both take effect January 1, 2020. Both require that manufacturers equip IoT devices with reasonable security features. Under either statute that can mean setting unique passwords for each unit shipped, or requiring end users to set a new password when they first access the device, in order to access the devices remotely from outside the devices’ local area network. This is a floor, not a ceiling, and both laws leave room for other security features..."

When manufacturers sell IoT devices all configured with the same universal password, it is a huge security problem. Bad actors can remotely access consumers' IoT devices to commit identity theft, fraud, and more. Consumers require greater protection, and the new IoT law is a good first step. Readers wanting to learn more can read this blog's Internet of Things section.

Fifth, Washington Governor Jay Inslee signed signed HB 1071 on May 7) which expanded the state’s data breach notification law. The changes become effective March 1, 2020. The National Law Review reported that breach:

"... notices must be provided no more than thirty days after the organization discovers the breach. This applies to notices sent to affected consumers as well as to the state’s Attorney General. The threshold requirement for notice to the Attorney General remains the same—it is only required if 500 or more Washington residents were affected by the breach."

The new law in Washington also expanded the list of sensitive data elements comprising "personal information" when combined with a person's name: birth date; "unique private key used to authenticate" electronic records; passport, military, and student ID numbers; health insurance policy or identification number; medical history, health conditions, diagnoses, and treatments; and biometric data (e.g., fingerprints, retina scans, voiceprints, etc.).

As more states announce amended breach notification laws, this blog will cover those actions.


Leading Manufacturer Reverses Its Position on Paperless Voting Machines

A leading manufacturer of electronic voting machines has reversed its position on election security. Tom Burt, the CEO of Election Systems & Software (ES&S), said his company will no longer sell paperless voting machines. Mr Burt wrote in Roll Call:

"... we must have physical paper records of votes. Our company, Election Systems & Software, the nation’s leading elections equipment provider, recently decided it will no longer sell paperless voting machines as the primary voting device in a jurisdiction. That’s because it is difficult to perform a meaningful audit without a paper record of each voter’s selections. Mandating the use of a physical paper record sets the stage for all jurisdictions to perform statistically valid post-election audits."

A 2017 study by researchers found 11 states where the majority of voters use paperless voting machines that store votes electronically -- without printed ballots or other paper-based backups to double-check the balloting. A report in March, 2018 by the Brennan Center For Justice found little progress since 2016 to replace old, vulnerable voting machines in the United States.

In his comments, Burt called upon Congress to act to improve the testing of voting machines. Burt also cited the challenges. First:

"There are about 10,000 jurisdictions in America that manage nearly 117,000 polling locations and utilize more than 560,000 voting machines (manufactured by multiple suppliers) on Election Day. That’s what you call a highly distributed and differentiated infrastructure..."

Second, jurisdictions have varying financial resources. Besides testing, it will cost money to replace obsolete and paperless voting machines. TechCrunch provided important context to Burt's comments:

"Senator Ron Wyden introduced a bill a year ago that would mandate voter-verified paper ballots for all election machines... Burt’s remarks are a sharp turnaround from the company’s position just a year ago, in which the election systems maker drew ire from the security community for denouncing vulnerabilities found by hackers at the annual Defcon conference. Security researchers at the conference’s Voting Village found a security flaw in an old but widely used voting machine in dozens of states. Their findings prompted a response by senior lawmakers on the Senate Intelligence Committee..."

So, the change in position by ES&S is a small start (and arguably late). What matters more will be action by ES&S and other voting-machine makers; and action by Congress.

Since a democracy relies upon elections, voting machine upgrades and testing could be considered an infrastructure issue. Both Congress and voting machine makers need to do their jobs. What are your opinions?


Court to Big Fracking Company: Trespassing Still Exists — Even For You

[Editor's note: today's guest post by ProPublica discusses business practices within the fracking industry. It is reprinted with permission. Readers may also be interested in this blog post from February.]

By Kate Mishkin and Ken Ward Jr., The Charleston Gazette-Mail

Seven years ago this month, Beth Crowder and David Wentz told natural gas giant EQT Corp. that it did not have permission to come onto their West Virginia farm to drill for the natural gas beneath neighboring properties.

EQT Corporation logo EQT had a lease that entitled the company to the gas directly beneath their farm, but it also wanted to use a new, 20-acre well pad to gather gas from 3,000 acres of adjacent or nearby leases. The company ignored their warnings. It built roads and drilled a well, and it put in horizontal pipes stretching for miles in all directions.

Crowder and Wentz sued — and they’ve been fighting EQT in court ever since. On Wednesday, the West Virginia Supreme Court ended the matter with a surprisingly straightforward and unanimous conclusion: Going onto someone else’s land without their permission is trespassing.

Gas and other mineral companies must obtain permission from surface owners in order to use their land to reach reserves under other properties, Justice John Hutchison wrote for the court. "The right must be expressly obtained, addressed, or reserved in the parties’ deeds, leases, or other writings," he wrote.

Attorney Dave McMahon, who represented Crowder and Wentz, broke the news to them by phone. "The short answer is, we won. And we won big time," he said.

On the other end of the line in Doddridge County, Crowder and Wentz shouted and laughed. "I think I’m feeling kind of numb," Crowder said. "I’ve been used to being in limbo forever."

Kristina Whiteaker, another lawyer for Crowder and Wentz, told them, "You guys really made some good law for the whole state."

EQT said in a statement issued Thursday afternoon that the company was "disappointed in the court’s ruling” but didn’t “expect the decision to have a significant impact on our operations in West Virginia."

"We intend to maintain cooperative and mutually beneficial relationships with our customers, our partners, and residents in the regions where we do business," EQT said.

The West Virginia Oil and Natural Gas Association, an industry trade association, said it is analyzing the ruling to determine how it may impact its member companies.

In a statement, Charlie Burd, the executive director of the Independent Oil and Gas Association of West Virginia, said the industry group would have preferred a ruling that encouraged horizontal drilling, but planned to comply with it. “IOGAWV members like to have good relationships with property owners,” Burd said.

Crowder and Wentz’s saga was chronicled last year by the Gazette-Mail and ProPublica, in an investigation that detailed how the natural gas industry had gained an upper hand on the state’s residents.

The 22-page court ruling Wednesday represents a rare victory for residents in a state where economics and politics are increasingly controlled by the natural gas business after decades of domination by the coal industry. Making it more gratifying for Crowder and Wentz, the court that ruled in their favor has been under the microscope because of connections to the gas industry.

Much of the land in mineral-producing parts of West Virginia has split ownership. Someone might own the surface land, while someone else owns the coal, oil or gas underneath. Gas is generally produced under leases, in which gas owners or their ancestors granted a production company the right to drill. But often, the leases are so old the current owners didn’t sign them, and certainly the advanced types of gas-production techniques used today were not anticipated.

Compounding the matter, gas producers now use a process called hydraulic fracturing, which pumps huge amounts of water and chemicals underground to loosen up gas reserves, and drill extensive horizontal holes to suck in gas from much wider areas. They bring in fleets of heavy trucks and install tanks and pipelines. The entire process has brought an influx of vibrations, noise and traffic. Though bills have been introduced year after year that are designed to mitigate the impacts on residents, West Virginia lawmakers have repeatedly refused to act.

Crowder and Wentz moved to their 300-acre farm on Brush Run in 1975, part of the “back-to-the-land” movement, seeking to live simply and be left alone. They divorced in 2005 and split the land, but both still live there on separate tracts.

There had been small gas wells on the property for years, but they were nothing like the noise, traffic and disturbance that EQT brought with it when it drilled nine new wells that would take in gas through nearly 10 miles of underground bores.

In February 2016, a local judge ruled that EQT had trespassed, and in September 2017, a jury awarded Crowder and Wentz about $200,000 in damages. EQT appealed.

The case is one of two major gas property-rights and drilling cases this term in which the industry is pressing for rulings that support its current method and scope of operations.

In the other case heard before the West Virginia Supreme Court in January, Harrison County residents said Antero Resources’ operations were creating a nuisance. A ruling on that hasn’t been issued yet.

At the heart of these cases is the fact that, economically and technologically, gas production today is all about what industry officials call “laterals.” These horizontal holes are drilled out in all directions from a vertical well. They can pull in natural gas from several miles away.

Industry officials say horizontal drilling allows them to minimize environmental impacts by building one well pad for multiple wells. But in doing so, it has magnified the impact for those residents who happen to live near — or on — the tracts chosen for those pads.

The Independent Oil and Gas Association had warned in a court brief that a ruling against EQT in the case would have “significant negative implications upon future and existing natural gas development in West Virginia.” EQT lawyers made similar warnings at trial.

Joshua Fershee, a West Virginia University law professor who has followed the case, said that the court’s decision won’t stop gas drilling. It will, however, make it more expensive for companies to secure the needed rights.

In concluding the court’s opinion, Hutchison said the justices didn’t aim to “challenge or constrain the drilling methods chosen by the oil and gas industry.”

“The industry has shown that horizontal drilling and hydraulic fracturing techniques are evolving at a rapid pace and are an economical and efficient tool for producing hydrocarbons,” Hutchison wrote. “Our opinion only affirms a classical rule of property jurisprudence: it is trespassing to go on someone’s land without the right to do so.”

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New Vermont Law Regulating Data Brokers Drives 120 Businesses From The Shadows

In May of 2018, Vermont was the first (and only) state in the nation to enact a law regulating data brokers. According to the Vermont Secretary of State, a data broker is defined as:

"... a business, or unit or units of a business, separately or together, that knowingly collects and sells or licenses to third parties the brokered personal information of a consumer with whom the business does not have a direct relationship."

The Vermont Secretary of State's website contains links to the new law and more. This new law is important for several reasons. First, many businesses operate as data brokers. Second, consumers historically haven't known who has information about them, nor how to review their profiles for accuracy. Third,  consumers haven't been able to opt out of the data collection. Fourth, if you don't know who the data brokers are, then you can't hold them accountable if they fail with data security. According to Vermont law:

"2447. Data broker duty to protect information; standards; technical requirements (a) Duty to protect personally identifiable information. (1) A data broker shall develop, implement, and maintain a comprehensive information security program that is written in one or more readily accessible parts and contains administrative, technical, and physical safeguards that are appropriate... identification and assessment of reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of any electronic, paper, or other records containing personally identifiable information, and a process for evaluating and improving, where necessary, the effectiveness of the current safeguards for limiting such risks... taking reasonable steps to select and retain third-party service providers that are capable of maintaining appropriate security measures to protect personally identifiable information consistent with applicable law; and (B) requiring third-party service providers by contract to implement and maintain appropriate security measures for personally identifiable information..."

Before this law, there was little to no oversight, no regulation, and no responsibility for data brokers to adequately protect sensitive data about consumers. A federal bill proposed in 2014 went nowhere in the U.S. Senate. You can assume that many data brokers operate in your state, too, since there's plenty of money to be made in the industry.

Portions of the new Vermont law went into effect in May, and the remainder went into effect on January 1, 2019. What has happened since then? Fast Company reported:

"So far, 121 companies have registered, according to data from the Vermont secretary of state’s office... The list of active companies includes divisions of the consumer data giant Experian, online people search engines like Spokeo and Spy Dialer, and a variety of lesser-known organizations that do everything from help landlords research potential tenants to deliver marketing leads to the insurance industry..."

The Fast Company site lists the 120 (so far) registered data brokers in Vermont. Regular readers of this blog will recognize some of the data brokers by name, since prior posts covered Acxiom, Equifax, Experian, LexisNexis, the NCTUE, Oracle, Spokeo, TransUnion, and others. (Yes, both credit reporting agencies and social media firms also operate as data brokers. Some states do it, too.) Reportedly, many privacy advocates support the new law:

"There’s companies that I’ve never heard of before," says Zachary Tomanelli, communications and technology director at the Vermont Public Interest Research Group, which supported the law. "It’s often very cumbersome [for consumers] to know where the places are that you have to go, and how you opt out."

Predictably, the industry has opposed (and continues to oppose) the legislation:

"A coalition of industry groups like the Internet Association, the Association of National Advertisers, and the National Association of Professional Background Screeners, as well as now registered data brokers such as Experian, Acxiom, and IHS Markit, said the law was unnecessary... Requiring companies to disclose breaches of largely public data could be burdensome for businesses and needlessly alarming for consumers, they argue... Other companies, like Axciom, have complained that the law establishes inconsistent boundaries around personal data used by third parties, and the first-party data used by companies like Facebook and Google."

So, no companies want consumers to own and control the data -- property -- that describes them. Real property laws matter. To learn more, read about data brokers at the Privacy Rights Clearinghouse site. Related posts in the Data Brokers section of this blog:

Kudos to Vermont lawmakers for ensuring more disclosures and transparency from the industry. Readers may ask their elected officials why their state has not taken similar action. What are your opinions of the new Vermont law?


Brave Alerts FTC On Threats From Business Practices With Big Data

The U.S. Federal Trade Commission (FTC) held a "Privacy, Big Data, And Competition" hearing on November 6-8, 2018 as part of its "Competition And Consumer Protection in the 21st Century" series of discussions. During that session, the FTC asked for input on several topics:

  1. "What is “big data”? Is there an important technical or policy distinction to be drawn between data and big data?
  2. How have developments involving data – data resources, analytic tools, technology, and business models – changed the understanding and use of personal or commercial information or sensitive data?
  3. Does the importance of data – or large, complex data sets comprising personal or commercial information – in a firm’s ordinary course operations change how the FTC should analyze mergers or firm conduct? If so, how? Does data differ in importance from other assets in assessing firm or industry conduct?
  4. What structural, behavioral or conduct remedies should the FTC consider when remedying antitrust harm in a market or industry where data or personal or commercial information are a significant product or a key competitive input?
  5. Are there policy recommendations that would facilitate competition in markets involving data or personal or commercial information that the FTC should consider?
  6. Do the presence of personal information or privacy concerns inform or change competition analysis?
  7. How do state, federal, and international privacy laws and regulations, adopted to protect data and consumers, affect competition, innovation, and product offerings in the United States and abroad?"

Brave, the developer of a web browser, submitted comments to the FTC which highlighted two concerns:

"First, big tech companies “cross-use” user data from one part of their business to prop up others. This stifles competition, and hurts innovation and consumer choice. Brave suggests that FTC should investigate. Second, the GDPR is emerging as a de facto international standard. Whether this helps or harms United States firms will be determined by whether the United States enacts and actively enforces robust federal privacy laws."

A letter by Dr. Johnny Ryan, the Chief Policy & Industry Relations Officer at Brave, described in detail the company's concerns:

"The cross-use and offensive leveraging of personal information from one line of business to another is likely to have anti-competitive effects. Indeed anti-competitive practices may be inevitable when companies with Google’s degree of market dominance update their privacy policies to include the cross-use of personal information. The result is that a company can leverage all the personal information accumulated from its users in one line of business to dominate other lines of business too. Rather than competing on the merits, the company can enjoy the unfair advantage of massive network effects... The result is that nascent and potential competitors will be stifled, and consumer choice will be limited... The cross-use of data between different lines of business is analogous to the tying of two products. Indeed, tying and cross-use of data can occur at the same time, as Google Chrome’s latest “auto sign in to everything” controversy illustrates..."

Historically, Google let Chrome web browser users decide whether or not to sign in for cross-device usage. The Chrome 69 update forced auto sign-in, but a Chrome 70 update restored users' choice after numerous complaints and criticism.

Regarding topic #7 by the FTC, Brave's response said:

"A de facto international standard appears to be emerging, based on the European Union’s General Data Protection Regulation (GDPR)... the application of GDPR-like laws for commercial use of consumers’ personal data in the EU, Britain (post EU), Japan, India, Brazil, South Korea, Malaysia, Argentina, and China bring more than half of global GDP under a common standard. Whether this emerging standard helps or harms United States firms will be determined by whether the United States enacts and actively enforces robust federal privacy laws. Unless there is a federal GDPR-like law in the United States, there may be a degree of friction and the potential of isolation for United States companies... there is an opportunity in this trend. The United States can assume the global lead by adopting the emerging GDPR standard, and by investing in world-leading regulation that pursues test cases, and defines practical standards..."

Currently, companies collect, archive, share, and sell consumers' personal information at will -- often without notice nor consent. While all 50 states and territories have breach notification laws, most states have not upgraded their breach notification laws to include biometric and passport data. While the Health Insurance Portability and Accountability Act (HIPAA) is the federal law which governs healthcare data and related breaches, many consumers share health data with social media sites -- robbing themselves of HIPAA protections.

Moreover, it's an unregulated free-for-all of data collection, archiving, and sharing by telecommunications companies after the revoking in 2017 of broadband privacy protections for consumers in the USA. Plus, laws have historically focused upon "declared data" (e.g., the data users upload or submit into websites or apps) while ignoring "inferred data" -- which is arguably just as sensitive and revealing.

Regarding future federal privacy legislation, Brave added:

"... The GDPR is compatible with a United States view of consumer protection and privacy principles. Indeed, the FTC has proposed important privacy protections to legislators in 2009, and again in 2012 and 2014, which ended up being incorporated in the GDPR. The high-level principles of the GDPR are closely aligned, and often identical to, the United States’ privacy principles... The GDPR also incorporates principles endorsed by the U.S. in the 1980 OECD Guidelines on the Protection of Privacy and Transborder Flows of Personal Data; and the principles endorsed by the United States this year, in Article 19.8 (3) of the new United States-Mexico-Canada Agreement."

"The GDPR differs from established United States privacy principles in its explicit reference to “proportionality” as a precondition of data use, and in its more robust approach to data minimization and to purpose specification. In our view, a federal law should incorporate these elements too. We also recommend that federal law should adopt the GDPR definitions of concepts such as “personal data”, “legal basis” including opt-in “consent”, “processing”, “special category personal data”, ”profiling”, “data controller”, “automated decision making”, “purpose limitation”, and so forth, and tools such as data protection impact assessments, breach notification, and records of processing activities."

"In keeping with the fair information practice principles (FIPPs) of the 1974 US Privacy Act, Brave recommends that a federal law should require that the collection of personal information is subject to purpose specification. This means that personal information shall only be collected for specific and explicit purposes. Personal information should not used beyond those purposes without consent, unless a further purpose is poses no risk of harm and is compatible with the initial purpose, in which case the data subject should have the opportunity to opt-out."

Submissions by Brave and others are available to the public at the FTC website in the "Public Comments" section.


Study: Privacy Concerns Have Caused Consumers To Change How They Use The Internet

Facebook commissioned a study by the Economist Intelligence Unit (EIU) to understand "internet inclusion" globally, or how people use the Internet, the benefits received, and the obstacles experienced. The latest survey included 5,069 respondents from 100 countries in Asia-Pacific, the Americas, Europe, the Middle East, North Africa and Sub-Saharan Africa.

Overall findings in the report cited:

"... cause for both optimism and concern. We are seeing steady progress in the number and percentage of households connected to the Internet, narrowing the gender gap and improving accessibility for people with disabilities. The Internet also has become a crucial tool for employment and obtaining job-related skills. On the other hand, growth in Internet connections is slowing, especially among the lowest income countries, and efforts to close the digital divide are stalling..."

The EIU describes itself as, "the world leader in global business intelligence, to help companies, governments and banks understand changes in the world is changing, seize opportunities created by those changes, and manage associated risks. So, any provider of social media services globally would greatly value the EIU's services.

The chart below highlights some of the benefits mentioned by survey respondents:

Chart-internet-benefits-eiu-2019

Other benefits respondents said: almost three-quarters (74.4%) said the Internet is more effective than other methods for finding jobs; 70.5% said their job prospects have improved due to the Internet; and more. So, job seekers and employers both benefit.

Key findings regarding online privacy (emphasis added):

"... More than half (52.2%) of [survey] respondents say they are not confident about their online privacy, hardly changed from 51.5% in the 2018 survey... Most respondents are changing the way they use the Internet because they believe some information may not remain private. For example, 55.8% of respondents say they limit how much financial information they share online because of privacy concerns. This is relatively consistent across different age groups and household income levels... 42.6% say they limit how much personal health and medical information they share. Only 7.5% of respondents say privacy concerns have not changed the way they use the Internet."

So, the lack of online privacy affects how people use the internet -- for business and pleasure. The chart below highlights the types of online changes:

Chart-internet-usage-eiu-2019

Findings regarding privacy and online shopping:

"Despite lingering privacy concerns, people are increasingly shopping online. Whether this continues in the future may hinge on attitudes toward online safety and security... A majority of respondents say that making online purchases is safe and secure, but, at 58.8% it was slightly lower than the 62.1% recorded in the 2018 survey."

So, the percentage of respondents who said online purchases as safe and secure went in the wrong direction -- down. Not good. There were regional differences, too, about online privacy:

"In Europe, the share of respondents confident about their online privacy increased by 8 percentage points from the 2018 survey, probably because of the General Data Protection Regulation (GDPR), the EU’s comprehensive data privacy rules that came into force in May 2018. However, the Middle East and North Africa region saw a decline of 9 percentage points compared with the 2018 survey."

So, sensible legislation to protect consumers' online privacy can have positive impacts. There were other regional differences:

"Trust in online sources of information remained relatively stable, except in the West. Political turbulence in the US and UK may have played a role in causing the share of respondents in North America and Europe who say they trust information on government websites and apps to retreat by 10 percentage points and 6 percentage points, respectively, compared with the 2018 survey."

So, stability is important. The report's authors concluded:

"The survey also reflects anxiety about online privacy and a decline in trust in some sources of information. Indeed, trust in government information has fallen since last year in Europe and North America. The growth and importance of the digital economy will mean that alleviating these anxieties should be a priority of companies, governments, regulators and developers."

Addressing those anxieties is critical, if governments in the West are serious about facilitating business growth via consumer confidence and internet usage. Download the Inclusive Internet Index 2019 Executive Summary (Adobe PDF) report.


New Bill In California To Strengthen Its Consumer Privacy Law

Lawmakers in California have proposed legislation to strengthen the state's existing privacy law. California Attorney General Xavier Becerra and and Senator Hannah-Beth Jackson jointly announced Senate Bill 561, to improve the California Consumer Privacy Act (CCPA). According to the announcement:

"SB 561 helps improve the workability of the [CCPA] by clarifying the Attorney General’s advisory role in providing general guidance on the law, ensuring a level playing field for businesses that play by the rules, and giving consumers the ability to enforce their new rights under the CCPA in court... SB 561 removes requirements that the Office of the Attorney General provide, at taxpayers’ expense, businesses and private parties with individual legal counsel on CCPA compliance; removes language that allows companies a free pass to cure CCPA violations before enforcement can occur; and adds a private right of action, allowing consumers the opportunity to seek legal remedies for themselves under the act..."

Senator Jackson introduced the proposed legislation into the sate Senate. Enacted in 2018, the CCPA will go into effect on January 1, 2020. The law prohibits businesses from discriminating against consumers for exercising their rights under the CCPA. The law also includes several key requirements businesses must comply with:

  • "Businesses must disclose data collection and sharing practices to consumers;
  • Consumers have a right to request their data be deleted;
  • Consumers have a right to opt out of the sale or sharing of their personal information; and
  • Businesses are prohibited from selling personal information of consumers under the age of 16 without explicit consent."

State Senator Jackson said in a statement:

"Our constitutional right to privacy continues to face unprecedented assault. Our locations, relationships, and interests are being tracked without our knowledge, bought and sold by corporate interests for their own economic gain and conducted in order to manipulate us... With the passage of the California Consumer Privacy Act last year, California took an important first step in protecting our fundamental right to privacy. SB 561 will ensure that the most significant privacy protections in the nation are effectively and robustly enforced."

Predictably, the pro-business lobby opposes the legislation. The Sacramento Bee reported:

"Punishment may be an incentive to increase compliance, but — especially where a law is new and vague — eliminating a right to cure does not promote compliance," the California Chamber of Commerce released in a statement on February 25. "SB 561 will not only hurt and possibly bankrupt small businesses in the state, it will kill jobs and innovation."

Sounds to me like fearmongering by the Chamber. Senator Jackson has it right. From the same Sacramento Bee article:

"If you don’t violate the law, you won’t get sued... To have very little recourse when these violations occur means that these large companies can continue with their inappropriate, improper behavior without any kind of recourse and sanction. In order to make sure they comply with the law, we need to make sure that people are able to exercise their rights."

Precisely. Two concepts seem to apply:

  • If you can't protect it, don't collect it (e.g.,  consumers' personal information), and
  • If the data collected is so value, compensate consumers for it

Regarding the second item, the National Law Review reported:

"Much has been made of California Governor Gavin Newsom’s recent endorsement of “data dividends”: payments to consumers for the use of their personal data. Common Sense Media, which helped pass the CCPA last year, plans to propose legislation in California to create such a dividend. The proposal has already proven popular with the public..."

Laws like the CCPA seem to be the way forward. Kudos to California for moving to better protect consumers. This proposed update puts teeth into existing law. Hopefully, other states will follow soon.


California Seeks To Close Loopholes In Its Data Breach Notification Law

California pursues legislation to close loopholes in its existing data breach notification law. Current state law in California does not require businesses to notify consumers when their passport and biometric data is exposed or stolen during a data breach. The proposed law would close that loophole.

The legislation was prompted by the gigantic data breach at Marriott's Starwood Hotels unit. The sensitive information of more than 327 million guests was accessed by unauthorized persons. The data accessed -- and probably stolen -- included guests' names, addresses, at least 25 million passport numbers, and more. California Attorney General Xavier Becerra announced the proposed legislation:

"Though [Marriott] did notify consumers of the breach, current law does not require companies to report breaches if only consumers’ passport numbers have been improperly accessed... In 2003, California became the first state to pass a data breach notification law requiring companies to disclose breaches of personal information to California consumers whose personal information was, or was reasonably believed to have been, acquired by an unauthorized person... This bill would update that law to include passport numbers as personal information protected under the statute. Passport numbers are unique, government-issued, static identifiers of a person, which makes them valuable to criminals seeking to create or build fake profiles and commit sophisticated identity theft and fraud. AB 1130 would also update the statute to include protection for a person’s unique biometric information, such as a fingerprint, or image of a retina or iris."

Assembly member Marc Levine (D-San Rafael) introduced the proposed legislation to the California House, and said in a statement:

“There is a real danger when our personal information is not protected by those we trust... Businesses must do more to protect personal data, and I am proud to stand with Attorney General Becerra in demanding greater disclosure by a company when a data breach has occurred. AB 1130 will increase our efforts to protect consumers from fraud and affirms our commitment to demand the strongest consumer protections in the nation."

Good. There are too many examples of companies failing to announce data breaches affecting companies. TechCrunch reported that AB 1130:

"... comes less than a year after state lawmakers passed the California Privacy Act into law, greatly expanding privacy rights for consumers — similar to provisions provided to Europeans under the newly instituted General Data Protection Regulation. The state privacy law, passed in June and set to go into effect in 2020, was met with hostility by tech companies headquartered in the state... Several other states, like Alabama, Florida and Oregon, already require data breach notifications in the event of passport number breaches, and also biometric data in the case of Iowa and Nebraska, among others..."

Kudos to California for moving to better protect consumers. Hopefully, other states will also update their breach notification laws.


Large Natural Gas Producer to Pay West Virginia Plaintiffs $53.5 Million to Settle Royalty Dispute

[Editor's note: today's guest post by ProPublica discusses business practices within the energy industry. It is reprinted with permission.]

By Kate Mishkin and Ken Ward Jr., The Charleston Gazette-Mail

The second-largest natural gas producer in West Virginia will pay $53.5 million to settle a lawsuit that alleged the company was cheating thousands of state residents and businesses by shorting them on gas royalty payments, according to terms of the deal unsealed in court this week.

EQT Corporation logo Pittsburgh-based EQT Corp. agreed to pay the money to end a federal class-action lawsuit, brought on behalf of about 9,000 people, which alleged that EQT wrongly deducted a variety of unacceptable charges from peoples’ royalty checks.

The deal is the latest in a series of settlements in cases that accused natural gas companies of engaging in such maneuvers to pocket a larger share of the profits from the boom in natural gas production in West Virginia.

This lawsuit was among the royalty cases highlighted last year in a joint examination by the Charleston Gazette-Mail and ProPublica that showed how West Virginia’s natural gas producers avoid paying royalties promised to thousands of residents and businesses. The plaintiffs said EQT was improperly deducting transporting and processing costs from their royalty payments. EQT said its royalty payment calculations were correct and fair.

A trial was scheduled to begin in November but was canceled after the parties reached the tentative settlement. Details of the settlement were unsealed earlier this month.

Under the settlement agreement, EQT Production Co. will pay the $53.5 million into a settlement fund. The company will also stop deducting those post-production costs from royalty payments.

“This was an opportunity to turn over a new leaf in our relationship with our West Virginia leaseholders and this mutually beneficial agreement demonstrates our renewed commitment to the state of West Virginia,” EQT’s CEO, Robert McNally, said in a prepared statement.

EQT is working to earn the trust of West Virginians and community leaders, he said.

Marvin Masters, the lead lawyer for the plaintiffs, called the settlement “encouraging” after six years of litigation. (Masters is among a group of investors who bought the Charleston Gazette-Mail last year.)

Funds will be distributed to people who leased the rights to natural gas beneath their land in West Virginia to EQT between Dec. 8, 2009, and Dec. 31, 2017. EQT will also pay up to $2 million in administrative fees to distribute the settlement.

Settlement payments will be calculated based on such factors as the amount of gas produced and sold from each well, as well as how much was deducted from royalty payments. The number of people who submit claims could also affect settlement payments. Each member of the class that submits a claim will receive a minimum payment of at least $200. The settlement allows lawyers to collect up to one-third of the settlement, or roughly $18 million, subject to approval from the court.

The settlement is pending before U.S. District Judge John Preston Bailey in the Northern District of West Virginia. The judge gave it preliminary approval on February 11th, which begins a process for public notice of the terms and a fairness hearing July 11 in Wheeling, West Virginia. Payments would not be made until that process is complete.

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UK Parliamentary Committee Issued Its Final Report on Disinformation And Fake News. Facebook And Six4Three Discussed

On February 18th, a United Kingdom (UK) parliamentary committee published its final report on disinformation and "fake news." The 109-page report by the Digital, Culture, Media, And Sport Committee (DCMS) updates its interim report from July, 2018.

The report covers many issues: political advertising (by unnamed entities called "dark adverts"), Brexit and UK elections, data breaches, privacy, and recommendations for UK regulators and government officials. It seems wise to understand the report's findings regarding the business practices of U.S.-based companies mentioned, since these companies' business practices affect consumers globally, including consumers in the United States.

Issues Identified

First, the DCMS' final report built upon issues identified in its:

"... Interim Report: the definition, role and legal liabilities of social media platforms; data misuse and targeting, based around the Facebook, Cambridge Analytica and Aggregate IQ (AIQ) allegations, including evidence from the documents we obtained from Six4Three about Facebook’s knowledge of and participation in data-sharing; political campaigning; Russian influence in political campaigns; SCL influence in foreign elections; and digital literacy..."

The final report includes input from 23 "oral evidence sessions," more than 170 written submissions, interviews of at least 73 witnesses, and more than 4,350 questions asked at hearings. The DCMS Committee sought input from individuals, organizations, industry experts, and other governments. Some of the information sources:

"The Canadian Standing Committee on Access to Information, Privacy and Ethics published its report, “Democracy under threat: risks and solutions in the era of disinformation and data monopoly” in December 2018. The report highlights the Canadian Committee’s study of the breach of personal data involving Cambridge Analytica and Facebook, and broader issues concerning the use of personal data by social media companies and the way in which such companies are responsible for the spreading of misinformation and disinformation... The U.S. Senate Select Committee on Intelligence has an ongoing investigation into the extent of Russian interference in the 2016 U.S. elections. As a result of data sets provided by Facebook, Twitter and Google to the Intelligence Committee -- under its Technical Advisory Group -- two third-party reports were published in December 2018. New Knowledge, an information integrity company, published “The Tactics and Tropes of the Internet Research Agency,” which highlights the Internet Research Agency’s tactics and messages in manipulating and influencing Americans... The Computational Propaganda Research Project and Graphika published the second report, which looks at activities of known Internet Research Agency accounts, using Facebook, Instagram, Twitter and YouTube between 2013 and 2018, to impact US users"

Why Disinformation

Second, definitions matter. According to the DCMS Committee:

"We have even changed the title of our inquiry from “fake news” to “disinformation and ‘fake news’”, as the term ‘fake news’ has developed its own, loaded meaning. As we said in our Interim Report, ‘fake news’ has been used to describe content that a reader might dislike or disagree with... We were pleased that the UK Government accepted our view that the term ‘fake news’ is misleading, and instead sought to address the terms ‘disinformation’ and ‘misinformation'..."

Overall Recommendations

Summary recommendations from the report:

  1. "Compulsory Code of Ethics for tech companies overseen by independent regulator,
  2. Regulator given powers to launch legal action against companies breaching code,
  3. Government to reform current electoral communications laws and rules on overseas involvement in UK elections, and
  4. Social media companies obliged to take down known sources of harmful content, including proven sources of disinformation"

Role And Liability Of Tech Companies

Regarding detailed observations and findings about the role and liability of tech companies, the report stated:

"Social media companies cannot hide behind the claim of being merely a ‘platform’ and maintain that they have no responsibility themselves in regulating the content of their sites. We repeat the recommendation from our Interim Report that a new category of tech company is formulated, which tightens tech companies’ liabilities, and which is not necessarily either a ‘platform’ or a ‘publisher’. This approach would see the tech companies assume legal liability for content identified as harmful after it has been posted by users. We ask the Government to consider this new category of tech company..."

The UK Government and its regulators may adopt some, all, or none of the report's recommendations. More observations and findings in the report:

"... both social media companies and search engines use algorithms, or sequences of instructions, to personalize news and other content for users. The algorithms select content based on factors such as a user’s past online activity, social connections, and their location. The tech companies’ business models rely on revenue coming from the sale of adverts and, because the bottom line is profit, any form of content that increases profit will always be prioritized. Therefore, negative stories will always be prioritized by algorithms, as they are shared more frequently than positive stories... Just as information about the tech companies themselves needs to be more transparent, so does information about their algorithms. These can carry inherent biases, as a result of the way that they are developed by engineers... Monika Bickert, from Facebook, admitted that Facebook was concerned about “any type of bias, whether gender bias, racial bias or other forms of bias that could affect the way that work is done at our company. That includes working on algorithms.” Facebook should be taking a more active and urgent role in tackling such inherent biases..."

Based upon this, the report recommended that the UK's new Centre For Ethics And Innovation (CFEI) should play a key role as an advisor to the UK Government by continually analyzing and anticipating gaps in governance and regulation, suggesting best practices and corporate codes of conduct, and standards for artificial intelligence (AI) and related technologies.

Inferred Data

The report also discussed a critical issue related to algorithms (emphasis added):

"... When Mark Zuckerberg gave evidence to Congress in April 2018, in the wake of the Cambridge Analytica scandal, he made the following claim: “You should have complete control over your data […] If we’re not communicating this clearly, that’s a big thing we should work on”. When asked who owns “the virtual you”, Zuckerberg replied that people themselves own all the “content” they upload, and can delete it at will. However, the advertising profile that Facebook builds up about users cannot be accessed, controlled or deleted by those users... In the UK, the protection of user data is covered by the General Data Protection Regulation (GDPR). However, ‘inferred’ data is not protected; this includes characteristics that may be inferred about a user not based on specific information they have shared, but through analysis of their data profile. This, for example, allows political parties to identify supporters on sites like Facebook, through the data profile matching and the ‘lookalike audience’ advertising targeting tool... Inferred data is therefore regarded by the ICO as personal data, which becomes a problem when users are told that they can own their own data, and that they have power of where that data goes and what it is used for..."

The distinction between uploaded and inferred data cannot be overemphasized. It is critical when evaluating tech companies statements, policies (e.g., privacy, terms of use), and promises about what "data" users have control over. Wise consumers must insist upon clear definitions to avoided getting misled or duped.

What might be an exampled of inferred data? What comes to mind is Facebook's Ad Preferences feature allows users to review and delete the "Interests" -- advertising categories -- Facebook assigns to each user's profile. (The service's algorithms assign Interests based groups/pages/events/advertisements users "Liked" or clicked on, posts submitted, posts commented upon, and more.) These "Interests" are inferred data, since Facebook assigned them, and uers didn't.

In fact, Facebook doesn't notify its users when it assigns new Interests. It just does it. And, Facebook can assign Interests whether you interacted with an item once or many times. How relevant is an Interest assigned after a single interaction, "Like," or click? Most people would say: not relevant. So, does the Interests list assigned to users' profiles accurately describe users? Do Facebook users own the Interests list assigned to their profiles? Any control Facebook users have seems minimal. Why? Facebook users can delete Interests assigned to their profiles, but users cannot stop Facebook from applying new Interests. Users cannot prevent Facebook from re-applying Interests previously deleted. Deleting Interests doesn't reduce the number of ads users see on Facebook.

The only way to know what Interests have been assigned is for Facebook users to visit the Ad Preferences section of their profiles, and browse the list. Depending how frequently a person uses Facebook, it may be necessary to prune an Interests list at least once monthly -- a cumbersome and time consuming task, probably designed that way to discourage reviews and pruning. And, that's one example of inferred data. There are probably plenty more examples, and as the report emphasizes users don't have access to all inferred data with their profiles.

Now, back to the report. To fix problems with inferred data, the DCMS recommended:

"We support the recommendation from the ICO that inferred data should be as protected under the law as personal information. Protections of privacy law should be extended beyond personal information to include models used to make inferences about an individual. We recommend that the Government studies the way in which the protections of privacy law can be expanded to include models that are used to make inferences about individuals, in particular during political campaigning. This will ensure that inferences about individuals are treated as importantly as individuals’ personal information."

Business Practices At Facebook

Next, the DCMS Committee's report said plenty about Facebook, its management style, and executives (emphasis added):

"Despite all the apologies for past mistakes that Facebook has made, it still seems unwilling to be properly scrutinized... Ashkan Soltani, an independent researcher and consultant, and former Chief Technologist to the US Federal Trade Commission (FTC), called into question Facebook’s willingness to be regulated... He discussed the California Consumer Privacy Act, which Facebook supported in public, but lobbied against, behind the scenes... By choosing not to appear before the Committee and by choosing not to respond personally to any of our invitations, Mark Zuckerberg has shown contempt towards both the UK Parliament and the ‘International Grand Committee’, involving members from nine legislatures from around the world. The management structure of Facebook is opaque to those outside the business and this seemed to be designed to conceal knowledge of and responsibility for specific decisions. Facebook used the strategy of sending witnesses who they said were the most appropriate representatives, yet had not been properly briefed on crucial issues, and could not or chose not to answer many of our questions. They then promised to follow up with letters, which -- unsurprisingly -- failed to address all of our questions. We are left in no doubt that this strategy was deliberate."

So, based upon Facebook's actions (or lack thereof), the DCMS concluded that Facebook executives intentionally ducked and dodged issues and questions.

While discussing data use and targeting, the report said more about data breaches and Facebook:

"The scale and importance of the GSR/Cambridge Analytica breach was such that its occurrence should have been referred to Mark Zuckerberg as its CEO immediately. The fact that it was not is evidence that Facebook did not treat the breach with the seriousness it merited. It was a profound failure of governance within Facebook that its CEO did not know what was going on, the company now maintains, until the issue became public to us all in 2018. The incident displays the fundamental weakness of Facebook in managing its responsibilities to the people whose data is used for its own commercial interests..."

So, internal management failed. That's not all. After a detailed review of the GSR/Cambridge Analytica breach and Facebook's 2011 Consent Decree with the U.S. Federal Trade Commission (FTC), the DCMS Committee concluded (emphasis and text link added):

"The Cambridge Analytica scandal was facilitated by Facebook’s policies. If it had fully complied with the FTC settlement, it would not have happened. The FTC Complaint of 2011 ruled against Facebook -- for not protecting users’ data and for letting app developers gain as much access to user data as they liked, without restraint -- and stated that Facebook built their company in a way that made data abuses easy. When asked about Facebook’s failure to act on the FTC’s complaint, Elizabeth Denham, the Information Commissioner, told us: “I am very disappointed that Facebook, being such an innovative company, could not have put more focus, attention and resources into protecting people’s data”. We are equally disappointed."

Wow! Not good. There's more:

"... a current court case at the San Mateo Superior Court in California also concerns Facebook’s data practices. It is alleged that Facebook violated the privacy of US citizens by actively exploiting its privacy policy... The published ‘corrected memorandum of points and authorities to defendants’ special motions to strike’, by the complainant in the case, the U.S.-based app developer Six4Three, describes the allegations against Facebook; that Facebook used its users’ data to persuade app developers to create platforms on its system, by promising access to users’ data, including access to data of users’ friends. The case also alleges that those developers that became successful were targeted and ordered to pay money to Facebook... Six4Three lodged its original case in 2015, after Facebook removed developers’ access to friends’ data, including its own. The DCMS Committee took the unusual, but lawful, step of obtaining these documents, which spanned between 2012 and 2014... Since we published these sealed documents, on 14 January 2019 another court agreed to unseal 135 pages of internal Facebook memos, strategies and employee emails from between 2012 and 2014, connected with Facebook’s inappropriate profiting from business transactions with children. A New York Times investigation published in December 2018 based on internal Facebook documents also revealed that the company had offered preferential access to users data to other major technology companies, including Microsoft, Amazon and Spotify."

"We believed that our publishing the documents was in the public interest and would also be of interest to regulatory bodies... The documents highlight Facebook’s aggressive action against certain apps, including denying them access to data that they were originally promised. They highlight the link between friends’ data and the financial value of the developers’ relationship with Facebook. The main issues concern: ‘white lists’; the value of friends’ data; reciprocity; the sharing of data of users owning Android phones..."

You can read the report's detailed descriptions of those issues. A summary: a) Facebook allegedly used promises of access to users' data to lure developers (often by overriding Facebook users' privacy settings); b) some developers got priority treatment based upon unclear criteria; c) developers who didn't spend enough money with Facebook were denied access to data previously promised; d) Facebook's reciprocity clause demanded that developers also share their users' data with Facebook; e) Facebook's mobile app for Android OS phone users collected far more data about users, allegedly without consent, than users were told; and f) Facebook allegedly targeted certain app developers (emphasis added):

"We received evidence that showed that Facebook not only targeted developers to increase revenue, but also sought to switch off apps where it considered them to be in competition or operating in a lucrative areas of its platform and vulnerable to takeover. Since 1970, the US has possessed high-profile federal legislation, the Racketeer Influenced and Corrupt Organizations Act (RICO); and many individual states have since adopted similar laws. Originally aimed at tackling organized crime syndicates, it has also been used in business cases and has provisions for civil action for damages in RICO-covered offenses... Despite specific requests, Facebook has not provided us with one example of a business excluded from its platform because of serious data breaches. We believe that is because it only ever takes action when breaches become public. We consider that data transfer for value is Facebook’s business model and that Mark Zuckerberg’s statement that “we’ve never sold anyone’s data” is simply untrue.” The evidence that we obtained from the Six4Three court documents indicates that Facebook was willing to override its users’ privacy settings in order to transfer data to some app developers, to charge high prices in advertising to some developers, for the exchange of that data, and to starve some developers—such as Six4Three—of that data, thereby causing them to lose their business. It seems clear that Facebook was, at the very least, in violation of its Federal Trade Commission settlement."

"The Information Commissioner told the Committee that Facebook needs to significantly change its business model and its practices to maintain trust. From the documents we received from Six4Three, it is evident that Facebook intentionally and knowingly violated both data privacy and anti-competition laws. The ICO should carry out a detailed investigation into the practices of the Facebook Platform, its use of users’ and users’ friends’ data, and the use of ‘reciprocity’ of the sharing of data."

The Information Commissioner's Office (ICO) is one of the regulatory agencies within the UK. So, the Committee concluded that Facebook's real business model is, "data transfer for value" -- in other words: have money, get access to data (regardless of Facebook users' privacy settings).

One quickly gets the impression that Facebook acted like a monopoly in its treatment of both users and developers... or worse, like organized crime. The report concluded (emphasis added):

"The Competitions and Market Authority (CMA) should conduct a comprehensive audit of the operation of the advertising market on social media. The Committee made this recommendation its interim report, and we are pleased that it has also been supported in the independent Cairncross Report commissioned by the government and published in February 2019. Given the contents of the Six4Three documents that we have published, it should also investigate whether Facebook specifically has been involved in any anti-competitive practices and conduct a review of Facebook’s business practices towards other developers, to decide whether Facebook is unfairly using its dominant market position in social media to decide which businesses should succeed or fail... Companies like Facebook should not be allowed to behave like ‘digital gangsters’ in the online world, considering themselves to be ahead of and beyond the law."

The DCMS Committee's report also discussed findings from the Cairncross Report. In summary, Damian Collins MP, Chair of the DCMS Committee, said:

“... we cannot delay any longer. Democracy is at risk from the malicious and relentless targeting of citizens with disinformation and personalized ‘dark adverts’ from unidentifiable sources, delivered through the major social media platforms we use everyday. Much of this is directed from agencies working in foreign countries, including Russia... Companies like Facebook exercise massive market power which enables them to make money by bullying the smaller technology companies and developers... We need a radical shift in the balance of power between the platforms and the people. The age of inadequate self regulation must come to an end. The rights of the citizen need to be established in statute, by requiring the tech companies to adhere to a code of conduct..."

So, the report seems extensive, comprehensive, and detailed. Read the DCMS Committee's announcement, and/or download the full DCMS Committee report (Adobe PDF format, 3,5o7 kilobytes).

Once can assume that governments' intelligence and spy agencies will continue to do what they've always done: collect data about targets and adversaries, use disinformation and other tools to attempt to meddle in other governments' activities. It is clear that social media makes these tasks far easier than before. The DCMS Committee's report provided recommendations about what the UK Government's response should be. Other countries' governments face similar decisions about their responses, if any, to the threats.

Given the data in the DCMS report, it will be interesting to see how the FTC and lawmakers in the United States respond. If increased regulation of social media results, tech companies arguably have only themselves to blame. What do you think?


Walgreens To Pay About $2 Million To Massachusetts To Settle Multiple Price Abuse Allegations. Other Settlement Payments Exceed $200 Million

Walgreens logo The Office of the Attorney General of the Commonwealth of Massachusetts announced two settlement agreements with Walgreens, a national pharmacy chain. Walgreens has agreed to pay about $2 million to settle multiple allegations of pricing abuses. According to the announcement:

"Under the first settlement, Walgreens will pay $774,486 to resolve allegations that it submitted claims to MassHealth in which it reported prices for certain prescription drugs at levels that were higher than what Walgreens actually charged, resulting in fraudulent overpayments."

"Under the second settlement, Walgreens will pay $1,437,366 to resolve allegations that from January 2006 through December 2017, rather than dispensing the quantity of insulin called for by a patient’s prescription, Walgreens exceeded the prescription amount and falsified information on claims submitted for reimbursement to MassHealth, including the quantity of insulin and/or days’ supply dispensed."

Both settlements arose from whistle-blower activity. MassHealth is the state's healthcare program based upon a state law passed in 2006 to provide health insurance to all Commonwealth residents. The law was amended in 2008 and 2010 to make it consistent with the federal Affordable Care Act.

Massachusetts Attorney General (AG) Maura Healey said:

"Walgreens repeatedly failed to provide MassHealth with accurate information regarding its dispensing and billing practices, resulting in overpayment to the company at taxpayers’ expense... We will continue to investigate cases of fraud and take action to protect the integrity of MassHealth."

In a separate case, Walgreen's will pay $1 million to the state of Arkansas to settle allegations of Medicaid fraud. Last month, the New York State Attorney General announced that New York State, other states, and the federal government reached:

"... an agreement in principle with Walgreens to settle allegations that Walgreens violated the False Claims Act by billing Medicaid at rates higher than its usual and customary (U&C) rates for certain prescription drugs... Walgreens will pay the states and federal government $60 million, all of which is attributable to the states’ Medicaid programs... The national federal and state civil settlement will resolve allegations relating to Walgreens’ discount drug program, known as the Prescription Savings Club (PSC). The investigation revealed that Walgreens submitted claims to the states’ Medicaid programs in which it identified U&C prices for certain prescription drugs sold through the PSC program that were higher than what Walgreens actually charged for those drugs... This is the second false claims act settlement reached with Walgreens today. On January 22, 2019, AG James announced that Walgreens is to pay New York over $6.5 million as part of a $209.2 million settlement with the federal government and other states, resolving allegations that Walgreens knowingly engaged in fraudulent conduct when it dispensed insulin pens..."

States involved in the settlement include New York, California, Illinois, Indiana, Michigan and Ohio. Kudos to all Attorneys General and their staffs for protecting patients against corporate greed.


Senators Demand Answers From Facebook And Google About Project Atlas And Screenwise Meter Programs

After news reports surfaced about Facebook's Project Atlas, a secret program where Facebook paid teenagers (and other users) for a research app installed on their phones to track and collect information about their mobile usage, several United States Senators have demanded explanations. Three Senators sent a join letter on February 7, 2019 to Mark Zuckerberg, Facebook's chief executive officer.

The joint letter to Facebook (Adobe PDF format) stated, in part:

"We write concerned about reports that Facebook is collecting highly-sensitive data on teenagers, including their web browsing, phone use, communications, and locations -- all to profile their behavior without adequate disclosure, consent, or oversight. These reports fit with Longstanding concerns that Facebook has used its products to deeply intrude into personal privacy... According to a journalist who attempted to register as a teen, the linked registration page failed to impose meaningful checks on parental consent. Facebook has more rigorous mechanism to obtain and verify parental consent, such as when it is required to sign up for Messenger Kids... Facebook's monitoring under Project Atlas is particularly concerning because the data data collection performed by the research app was deeply invasive. Facebook's registration process encouraged participants to "set it and forget it," warning that if a participant disconnected from the monitoring for more than ten minutes for a few days, that they could be disqualified. Behind the scenes, the app watched everything on the phone."

The letter included another example highlighting the alleged lack of meaningful disclosures:

"... the app added a VPN connection that would automatically route all of a participant's traffic through Facebook's servers. The app installed a SSL root certificate on the participant's phone, which would allow Facebook to intercept or modify data sent to encrypted websites. As a result, Facebook would have limitless access to monitor normally secure web traffic, even allowing Facebook to watch an individual log into their bank account or exchange pictures with their family. None of the disclosures provided at registration offer a meaningful explanation about how the sensitive data is used, how long it is kept, or who within Facebook has access to it..."

The letter was signed by Senators Richard Blumenthal (Democrat, Connecticut), Edward J. Markey (Democrat, Massachusetts), and Josh Hawley (Republican, Mississippi). Based upon news reports about how Facebook's Research App operated with similar functionality to the Onavo VPN app which was banned last year by Apple, the Senators concluded:

"Faced with that ban, Facebook appears to have circumvented Apple's attempts to protect consumers."

The joint letter also listed twelve questions the Senators want detailed answers about. Below are selected questions from that list:

"1. When did Project Atlas begin and how many individuals participated? How many participants were under age 18?"

"3. Why did Facebook use a less strict mechanism for verifying parental consent than is Required for Messenger Kids or Global Data Protection Requlation (GDPR) compliance?"

"4.What specific types of data was collected (e.g., device identifieers, usage of specific applications, content of messages, friends lists, locations, et al.)?"

"5. Did Facebook use the root certificate installed on a participant's device by the Project Atlas app to decrypt and inspect encrypted web traffic? Did this monitoring include analysis or retention of application-layer content?"

"7. Were app usage data or communications content collected by Project Atlas ever reviewed by or available to Facebook personnel or employees of Facebook partners?"

8." Given that Project Atlas acknowledged the collection of "data about [users'] activities and content within those apps," did Facebook ever collect or retain the private messages, photos, or other communications sent or received over non-Facebook products?"

"11. Why did Facebook bypass Apple's app review? Has Facebook bypassed the App Store aproval processing using enterprise certificates for any other app that was used for non-internal purposes? If so, please list and describe those apps."

Read the entire letter to Facebook (Adobe PDF format). Also on February 7th, the Senators sent a similar letter to Google (Adobe PDF format), addressed to Hiroshi Lockheimer, the Senior Vice President of Platforms & Ecosystems. It stated in part:

"TechCrunch has subsequently reported that Google maintained its own measurement program called "Screenwise Meter," which raises similar concerns as Project Atlas. The Screenwise Meter app also bypassed the App Store using an enterprise certificate and installed a VPN service in order to monitor phones... While Google has since removed the app, questions remain about why it had gone outside Apple's review process to run the monitoring program. Platforms must maintain and consistently enforce clear policies on the monitoring of teens and what constitutes meaningful parental consent..."

The letter to Google includes a similar list of eight questions the Senators seek detailed answers about. Some notable questions:

"5. Why did Google bypass App Store approval for Screenwise Meter app using enterprise certificates? Has Google bypassed the App Store approval processing using enterprise certificates for any other non-internal app? If so, please list and describe those apps."

"6. What measures did Google have in place to ensure that teenage participants in Screenwise Meter had authentic parental consent?"

"7. Given that Apple removed Onavoo protect from the App Store for violating its terms of service regarding privacy, why has Google continued to allow the Onavo Protect app to be available on the Play Store?"

The lawmakers have asked for responses by March 1st. Thanks to all three Senators for protecting consumers' -- and children's -- privacy... and for enforcing transparency and accountability.


Technology And Human Rights Organizations Sent Joint Letter Urging House Representatives Not To Fund 'Invasive Surveillance' Tech Instead of A Border Wall

More than two dozen technology and human rights organizations sent a joint letter Tuesday to representatives in the House of Representatives, urging them not to fund "invasive surveillance technologies" in replacement of a physical wall or barrier along the southern border of the United States. The joint letter cited five concerns:

"1. Risk-based targeting: The proposal calls for “an expansion of risk-based targeting of passengers and cargo entering the United States.” We are concerned that this includes the expansion of programs — proven to be ineffective and to exacerbate racial profiling — that use mathematical analytics to make targeting determinations. All too often, these systems replicate the biases of their programmers, burden vulnerable communities, lack democratic transparency, and encourage the collection and analysis of ever-increasing amounts of data... 3. Biometrics: The proposal calls for “new cutting edge technology” at the border. If that includes new face surveillance like that deployed at international airline departures, it should not. Senator Jeff Merkley and the Congressional Black Caucus have expressed serious concern that facial recognition technology would place “disproportionate burdens on communities of color and could stifle Americans’ willingness to exercise their first amendment rights in public.” In addition, use of other biometrics, including iris scans and voice recognition, also raise significant privacy concerns... 5. Biometric and DNA data: We oppose biometric screening at the border and the collection of immigrants’ DNA, and fear this may be another form of “new cutting edge technology” under consideration. We are concerned about the threat that any collected biometric data will be stolen or misused, as well as the potential for such programs to be expanded far beyond their original scope..."

The letter was sent to Speaker Nancy Pelosi, Minority Leader Kevin McCarthy, Minority Leader Steny Hoyer, Minority Whip Steve Scalise, Chair Nita Lowey a Ranking Member of House Appropriations, and Kay Granger of the House Appropriations committee.

27 organizations signed the joint letter, including Fight for the Future, the Electronic Frontier Foundation, the American Civil Liberties Union (ACLU), the American-Arab Anti-Discrimination Committee, the Center for Media Justice, the Project On Government Oversight, and others. Read the entire letter.

Earlier this month, a structural and civil engineer cited several reasons why a physical wall won't work and would be vastly more expensive than the $5.7 billion requested.

Clearly, the are distinct advantages and disadvantages for each and all border-protection solutions the House and President are considering. It is a complex problem. These advantages and disadvantages of all proposals need to be clear, transparent, and understood by taxpayers prior to any final decisions.