Facebook Announces New Privacy Initiative

By Emily A. Bruemmer

Smartphone computerOn March 6, 2019, Facebook CEO Mark Zuckerberg announced via an interview and a Facebook blog post a planned shift to “building a privacy-focused messaging and social networking platform.”  Characterizing this shift as a “privacy-focused vision,” Zuckerberg said that this change in focus meant that Facebook and Instagram would not only function as “the digital equivalent of a town square” but also “the digital equivalent of the living room.”  This shift was billed in part as a response to user demand: according to the post, the “fastest growing areas of online communication” were private messaging, “ephemeral stories,” and small group communication. 

According to the blog post, Facebook’s “privacy-focused platform” will be based on six principles: private interactions, encryption, reducing permanence, safety, interoperability, and secure data storage.  “Interoperability” refers to Facebook’s plan to integrate its messaging services across Facebook Messenger, WhatsApp, and Instagram Direct.  The blog post did not provide much detail on what these principles would mean in practice or what changes users would see from an experiential perspective, but rather qualified its efforts as being in the “early stages.”  

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CFPB Releases Winter Supervisory Highlights Report

By Alexander M. Smith

AutoEarlier this month, the Consumer Financial Protection Bureau (CFPB) released the latest iteration of its Supervisory Highlights report, which summarizes some of the CFPB’s recent supervisory examinations and provides guidance to industry about practices to avoid.  The CFPB’s Supervisory Highlights report notes that the CFPB has recently examined the following practices:

  • Automobile Loan Servicing.  The CFPB has recently conducted examinations of captive automotive finance companies for unfair and deceptive acts and practices (UDAAPs) involving rebates for extended automobile warranties.  Typically, when a lessee purchases an extended warranty for a leased car and the car is a total loss, the lessee is entitled to a pro-rated rebate of the premium amount for the un-used portion of the warranty; the rebate is applied first to any deficiency balance on the lease, and the balance is returned to the lessee.  The CFPB found that some automotive finance companies had engaged in UDAAPs by (1) failing to apply the rebate to the deficiency balance or artificially deflating the value of the rebate (for instance, by overstating the number of miles on the car) and then (2) attempting to collect on the inflated deficiency balance.

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CSBS Releases Recommendations for FinTech Regulators

By Camila A. Connolly

New-Update-IconOn February 12, the Conference of State Bank Supervisors (CSBS) released its Fintech Industry Advisory Panel Recommendations.  CSBS is a national organization of financial regulators from around the United States, Guam, Puerto Rico, American Samoa, and the US Virgin Islands.  The recommendations are designed to improve the use of regulatory technology and harmonize regulatory standards throughout the United States.  The recommendations include a plan to develop a model state law for MSBs and to standardize licensing requirements.  The panel also recommended a pilot program for building a uniform state licensing examination.  Overall, the recommendations seek to create uniformity in state FinTech licensing and regulation.  To aid in the harmonizing process, the panel recommends creating repositories of the different state laws and licensing requirements so that financial companies can access all necessary regulations at once.  CSBS includes these recommendations as part of a broader effort to streamline state FinTech regulation called Vision 2020.  Read the full list of recommendations here.


Proposed Federal Privacy Legislation and the Year Ahead

Data securityIn a recent Corporate Counsel article, Jenner & Block Partner Jeffrey A. Atteberry examines the current federal privacy legislative proposals and the impact potential data privacy and cybersecurity legislation could have on businesses.  Mr. Atteberry explains that several recent high-profile data breaches and questions about how social media platforms share consumers’ personal data are contributing to increasing demand for passage of federal data privacy legislation.  He explains that the bills and proposals that have circulated in the last year are the best indicator of what lies ahead in terms of any potential federal privacy regime.  To help corporate counsel anticipate changes that may arise, Mr. Atteberry breaks down the current congressional proposals and provides key takeaways for in-house counsel.

To read the full article, please click here.


Jenner & Block’s Food and Beverage Practice Once Again Named a “Practice Group of the Year” by Law360

PGotY-B-Linkedin-Single-1400x800For the third consecutive year, Jenner & Block’s Food and Beverage Practice is recognized as a Law360 Practice Group of the Year for successfully leading a diverse array of matters for the titans of the food and beverage industry.  Law360 notes that the firm fended off claims against our clients that include household names such as Hain Celestial, Kraft and Mondelēz and led Snyder’s-Lance in its $6 billion sale to Campbell Soup.  In addition, Partner Dean N. Panos highlights that the group is handling cases in many areas, including commercial litigation, supplier, distributor, joint venture disputes, M&A, insurance coverage, antitrust and investigations and enforcement.  He adds that the practice is not “totally a litigation practice: it is transactional, litigation, and…a counseling practice.”  He explains that because of the group’s experience and knowledge, “we understand, as best as an outside counsel can, the business pressures our clients face and how these businesses are run so that we are being a net positive to their work environments.”

To read Law360’s profile, please click here.


Businesses Express Concerns with CCPA at Public Forum

ConsumerIn an article published by the Daily Journal, Jenner & Block Partner Jeffrey A. Atteberry discusses the recent public forum that was hosted by the California attorney general’s office regarding the California Consumer Privacy Act of 2018 (CCPA).  The forum was held in order to seek public comment on the CCPA as the attorney general moves forward with the initial phase of the rulemaking process.  Mr. Atteberry summarizes the concerns that businesses expressed at the forum, including a request to clarify the scope and meaning of the word “sell” as it relates to the sale of personal information, the need for guidance relating to the calculation of the revenue threshold in the CCPA, and the data security risks associated with the CCPA’s verification requirements, among others.

To read the full article, please click here.


En Banc Ninth Circuit Rejects Compelled-Commercial Speech Ordinance on First Amendment Grounds

By Gabriel K. Gillett

Beverage1Last week the en banc Ninth Circuit unanimously struck down San Francisco’s ordinance requiring warnings on ads for certain sugary beverages as a violation of the First Amendment.  In American Beverage Ass’n v. City and County of San Francisco, No. 16-16072, the court held that the Ordinance is an “unjustified or unduly burdensome disclosure requirement[] [that] might offend the First Amendment by chilling protected commercial speech.”  Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 651 (1985).  (Jenner & Block filed an amicus brief in the case, on behalf of the Retail Litigation Center.) 

Four of the eleven judges who participated joined three special concurrences, however, explaining why they believed the majority had erred even though it reached the right result.  Those three concurrences highlight a number of issues related to commercial speech for courts to address in the wake of the Supreme Court’s decision in National Institute of Family & Life Advocates v. Becerra (NIFLA), 138 S. Ct. 2361 (2018).   
 

San Francisco’s “Sugar-Sweetened Beverage” Ordinance

The American Beverage Association v. City and County of San Francisco centers on a 2015 ordinance that required ads for certain “Sugar-Sweetened Beverages” to include the following:  “WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay. This is a message from the City and County of San Francisco.”  Slip op. 8.

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What’s In Your Baby Powder? New York Proposes Stringent New Disclosure Requirements on Cleaning and Personal Care Products

By Alexander M. Smith

Personal-Care-ProductsLast week, New York Governor Andrew Cuomo announced the Consumer Right to Know Act (“Act”) as part of his proposed executive budget.  The Act would authorize the New York Department of Environmental Conservation, along with the New York Department of Health and the New York Department of State, to promulgate regulations requiring product manufacturers to disclose the presence of potentially hazardous substances on their product labeling.  Among other things, the Act would require these agencies to assess the feasibility of on-package labeling; develop regulations establishing a labeling requirement for designated products; develop a list of more than 1,000 substances that must be labeled; and identify the types of consumer products that will be subject to these new labeling requirements.  The Act would also extend the Department of Environmental Conservation’s disclosure requirements for household cleaning products to encompass all cleaning products sold in New York, and it would empower the Department of Health to require similar disclosures for personal care products like shampoo, deodorant, or baby powder.  Needless to say, these disclosure requirements would be among the most stringent—if not the most stringent—in the United States. 

Governor Cuomo’s announcement is available here.  We will keep our readers updated on the progress of Governor Cuomo’s proposal. 


Top 10 of 2018: The Best Consumer Law Round-Up Posts of the Year

2018 was another busy year for the Consumer Law Round-Up. Launched by the firm’s Consumer Law Practice, the blog updates readers on key developments within consumer law and provides insights that are relevant to companies and individuals that may be affected by the ever-increasing patchwork of federal and state consumer protection statutes. In 2018, the Consumer Law Round-Up featured posts by approximately 20 different authors on a wide array of topics. 

Below is a list of the Top 10 most popular posts of 2018. 


#1 SDNY Rules CFPB Unconstitutional, Creating Split of Authority and Raising New Questions

Since its inception, the Consumer Financial Protection Bureau (CFPB) has faced controversy over its structure as an independent agency headed by a single director who can be removed by the President only for cause. Critics have invoked the unitary executive theory to argue that the Constitution permits an agency to enjoy independence from at-will termination by the President only if the agency is headed by multiple commissioners, directors, or board members...Read more

#2 SEC Take on Tokens Clarifies Some Crypto Community Quandaries

In a June 14 speech, William Hinman, the SEC’s Director of the Division of Corporate Finance, began to place additional definition around the raging debate over whether digital assets, including tokens, are securities. Until that speech, much commentary had focused on the repeat statements by SEC officials that digital assets distributed in initial coin offerings (ICOs) are almost always securities in the SEC’s view, with the possible exception of widely disseminated cryptocurrencies like Bitcoin...Read more

#3 The Supreme Court Reaffirms the Reach and Force of the Federal Arbitration Act, This Time in Employment Cases

On May 21, 2018, the Supreme Court issued its long-awaited decision in the consolidated cases Epic Systems Corp. v. Lewis, No. 16-285; Ernst & Young LLP v. Morris, No. 16-300; and NLRB v. Murphy Oil USA, No. 16-307. In a 5-4 opinion by Justice Gorsuch, the Court held that courts must enforce arbitration agreements requiring employees to bring employment-related claims in individualized arbitration proceedings, and barring them from pursuing those claims...Read more

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Crypto Winter Continues With Ongoing Enforcement

   

By Michael W. Ross, Andrew J. Lichtman and Emily A. Bruemmer

Crypto-winterSeveral recent “first of kind” enforcement proceedings continue the flurry of enforcement activity by regulators.  In two settled proceedings, the Securities and Exchange Commission (SEC) brought two cases for failure to register digital tokens as securities in connection with initial coin offerings (ICOs), without allegations of fraud.  With such enforcement actions now commonplace, a “crypto winter” has clearly set in.  In another development, a federal court recently issued the first opinion concluding that the SEC had failed to establish that a digital asset issued in connection with an ICO was a “security” under the federal securities laws, underscoring that digital assets will not be subject to a one-size-fits-all analysis.

As for the two settled charges, according to the SEC’s orders, Paragon Coin, Inc.[1] and AirFox[2] launched their ICOs in 2017.  Paragon is an online company that was established to implement blockchain technology in the cannabis industry, as well as to work towards legalization of cannabis.  Through its ICO, Paragon raised approximately $12 million in digital assets to develop and expand its business.  As for AirFox, it sells mobile technology intended to allow customers to earn free or discounted data by watching advertisements on their phones.  AirFox raised approximately $15 million in its ICO to help expand its business overseas.  Neither Paragon nor AirFox registered their ICOs.

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