Data Protection Law: An Overview
Congressional research reportMar 25, 2019
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Data Protection Law: An Overview
Stephen P. Mulligan
Legislative Attorney
Chris D. Linebaugh
Legislative Attorney
March 25, 2019
Congressional Research Service
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www.crs.gov
R45631
SUMMARY
Data Protection Law: An Overview
Recent high-profile data breaches and other concerns about how third parties protect the privacy
of individuals in the digital age have raised national concerns over legal protections of
Americans’ electronic data. Intentional intrusions into government and private computer
networks and inadequate corporate privacy and cybersecurity practices have exposed the personal
information of millions of Americans to unwanted recipients. At the same time, internet
connectivity has increased and varied in form in recent years. Americans now transmit their
personal data on the internet at an exponentially higher rate than in the past, and their data are
collected, cultivated, and maintained by a growing number of both “consumer facing” and
“behind the scenes” actors such as data brokers. As a consequence, the privacy, cybersecurity and
protection of personal data have emerged as a major issue for congressional consideration.
R45631
March 25, 2019
Stephen P. Mulligan
Legislative Attorney
-re-acte--@crs.loc.gov
Chris D. Linebaugh
Legislative Attorney
-re-acte--@crs.loc.gov
For a copy of the full report,
please call 7-.... or visit
www.crs.gov.
Despite the rise in interest in data protection, the legislative paradigms governing cybersecurity
and data privacy are complex and technical, and lack uniformity at the federal level. The constitutional “right to privacy”
developed over the course of the 20th century, but this right generally guards only against government intrusions and does
little to shield the average internet user from private actors. At the federal statutory level, there are a number of statutes that
protect individuals’ personal data or concern cybersecurity, including the Gramm-Leach-Bliley Act, Health Insurance
Portability and Accountability Act, Children’s Online Privacy Protection Act, and others. And a number of different
agencies, including the Federal Trade Commission (FTC), the Consumer Finance Protection Bureau (CFPB), and the
Department of Health and Human Services (HHS), enforce these laws. But these statutes primarily regulate certain industries
and subcategories of data. The FTC fills in some of the statutory gaps by enforcing a broad prohibition against unfair and
deceptive data protection practices. But no single federal law comprehensively regulates the collection and use of consumers’
personal data. Seeking a more fulsome data protection system, some governments—such as California and the European
Union (EU)—have recently enacted privacy laws regulating nearly all forms of personal data within their jurisdictional reach.
Some argue that Congress should consider creating similar protections in federal law, but others have criticized the EU and
California approaches as being overly prescriptive and burdensome.
Should the 116th Congress consider a comprehensive federal data protection law, its legislative proposals may involve
numerous decision points and legal considerations. Points of consideration may include the conceptual framework of the law
(i.e., whether it is prescriptive or outcome-based), the scope of the law and its definition of protected information, and the
role of the FTC or other federal enforcement agency. Further, if Congress wants to allow individuals to enforce data
protection laws and seek remedies for the violations of such laws in court, it must account for standing requirements in
Article III, Section 2 of the Constitution. Federal preemption also raises complex legal questions—not only of whether to
preempt state law, but what form of preemption Congress should employ. Finally, from a First Amendment perspective,
Supreme Court jurisprudence suggests that while some privacy, cybersecurity, or data security regulations are permissible,
any federal law that restricts protected speech, particularly if it targets specific speakers or content, may be subject to more
stringent review by a reviewing court.
Congressional Research Service
Data Protection Law: An Overview
Contents
Origins of American Privacy Protections ........................................................................................ 3
The Common Law and the Privacy Torts .................................................................................. 3
Constitutional Protections and the Right to Privacy ................................................................. 5
Federal Data Protection Law ........................................................................................................... 7
Gramm-Leach-Bliley Act (GLBA) ........................................................................................... 8
Health Insurance Portability and Accountability Act (HIPAA) .............................................. 10
Fair Credit Reporting Act (FCRA) .......................................................................................... 12
The Communications Act ........................................................................................................ 14
Common Carriers .............................................................................................................. 14
Cable Operators and Satellite Carriers .............................................................................. 17
Video Privacy Protection Act .................................................................................................. 19
Family Educational Rights and Privacy Act (FERPA) ............................................................ 20
Federal Securities Laws .......................................................................................................... 21
Children’s Online Privacy Protection Act (COPPA) ............................................................... 24
Electronic Communications Privacy Act (ECPA) ................................................................... 25
Computer Fraud and Abuse Act (CFAA) ................................................................................ 29
Federal Trade Commission Act (FTC Act) ............................................................................. 30
Consumer Financial Protection Act (CFPA) ........................................................................... 35
State Data Protection Law ............................................................................................................. 36
The California Consumer Privacy Act (CCPA)....................................................................... 38
The CCPA’s Scope............................................................................................................ 38
The CCPA’s Provisions and Requirements....................................................................... 38
Remedies, Liabilities, and Fines ....................................................................................... 39
The CCPA and the 116th Congress ......................................................................................... 39
The EU’s General Data Protection Regulation (GDPR) ............................................................... 40
European Data Privacy Laws and the Lead-Up to the GDPR .......................................... 41
GDPR Provisions and Requirements ...................................................................................... 42
Scope and Territorial Reach .............................................................................................. 42
Key Principles ................................................................................................................... 43
Bases for Processing and Consent Requirements ............................................................. 43
Individual Rights and Corresponding Obligations............................................................ 44
Data Governance and Security.......................................................................................... 46
Data Breach Notifications ................................................................................................. 47
Data Transfer Outside the EU ........................................................................................... 48
Remedies, Liability, and Fines .......................................................................................... 50
The GDPR and the 116th Congress ........................................................................................ 50
The Trump Administration’s Proposed Data Privacy Policy Framework ..................................... 51
Considerations for Congress.......................................................................................................... 54
Prescriptive Versus Outcome-Based Approach ....................................................................... 55
Defining Protected Information and Addressing Statutory Overlap ....................................... 56
Agency Enforcement ............................................................................................................... 57
Private Rights of Action and Standing .................................................................................... 59
Preemption .............................................................................................................................. 62
First Amendment ..................................................................................................................... 64
Conclusion ..................................................................................................................................... 69
Congressional Research Service
Data Protection Law: An Overview
Appendixes
Appendix. Summary of Federal Data Protection Laws ................................................................. 71
Contacts
Author Contact Information .......................................................................................................... 75
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Data Protection Law: An Overview
ecent high-profile data breaches and privacy violations have raised national concerns over
the legal protections that apply to Americans’ electronic data.1 While some concern over
data protection2 stems from how the government might utilize such data, mounting
worries have centered on how the private sector controls digital information,3 the focus of this
report. Inadequate corporate privacy practices4 and intentional intrusions into private computer
networks5 have exposed the personal information of millions of Americans. At the same time,
internet connectivity has increased and varied in form in recent years, expanding from personal
computers and mobile phones to everyday objects such as home appliances, “smart” speakers,
vehicles, and other internet-connected devices.6
R
Americans now transmit their personal data on the internet at an exponentially higher rate than
the past.7 Along with the increased connectivity, a growing number of “consumer facing” actors
1 See, e.g., Aaron Smith, Americans and Cybersecurity, PEW RESEARCH CTR. (Jan. 26, 2017),
http://www.pewinternet.org/2017/01/26/americans-and-cybersecurity/ (“This survey finds that a majority of Americans
have directly Experienced some form of data theft or fraud, that a sizeable share of the public thinks that their personal
data have become less secure in recent years, and that many lack confidence in various institutions to keep their
personal data safe from misuse.”).
2 As discussed in more detail infra § Considerations for Congress, the term “data protection” in this report refers to
both data privacy (i.e., how companies collect, use, and disseminate personal information) and data security (i.e., how
companies protect personal information from unauthorized access or use and respond to such unauthorized access or
use). Although data privacy and data security present distinct challenges and are discussed separately in this report
when appropriate, legislation addressing these fields increasingly has been unified into the singular field of data
protection. See, e.g., ANDREW BURT & ANDREW E. GEER, JR., STANFORD UNIV., HOOVER INST., AEGIS SERIES PAPER NO.
1816, FLAT LIGHT: DATA PROTECTION FOR THE DISORIENTED, FROM POLICY TO PRACTICE 9 (2018) (“What we call
‘privacy’ and ‘security’ are now best and jointly described as ‘data protection.’”); Woodrow Hartzog & Daniel J.
Solove, The Scope and Potential of FTC Data Protection, 83 GEO. WASH. L. REV. 2230, 2232 (2015) (referring to data
privacy and security as “two related areas that together we will refer to as ‘data protection.’”).
3 See, e.g., U.S. GOV’T ACCOUNTABILITY OFFICE, GAO-19-52, INTERNET PRIVACY: ADDITIONAL FEDERAL AUTHORITY
COULD ENHANCE CONSUMER PROTECTION AND PROVIDE FLEXIBILITY 16-17 (2019) [hereinafter GAO-19-52] (discussing
public opinion surveys related to public concerns over the protection of consumer data).
4 See, e.g., Paul Grewal, Deputy Vice President and General Counsel, Facebook, Suspending Cambridge Analytica and
SCL Group from Facebook, FACEBOOK (last updated Mar. 17, 2017, 9:50 AM PT), https://newsroom.fb.com/news/
2018/03/suspending-cambridge-analytica/ (reporting that the data analytics firm Cambridge Analytica exposed private
user information by violating Facebook’s privacy platform). In addition to violations of privacy protocols, Facebook
recently reported that hackers have intentionally infiltrated its private networks. See Guy Rosen, Vice President of
Product Management, Facebook, Security Update, FACEBOOK (Sept. 28, 2018), https://newsroom.fb.com/news/2018/
09/security-update/ (reporting that hackers exploited a vulnerability in Facebook’s code affecting nearly 50 million
accounts).
5 Large-scale intrusions into private networks have occurred at a variety of companies, including Equifax, Yahoo,
Sony, Target, and Home Depot. See CRS Report R43496, The Target and Other Financial Data Breaches: Frequently
Asked Questions, by N. Eric Weiss and Rena S. Miller; Anna Maria Andriotis, Robert McMillan and Christina
Rexrode, Equifax Hack Leaves Consumers, Financial Firms Scrambling, WALL ST. J., Sept. 8, 2017,
https://www.wsj.com/articles/equifax-hack-leaves-consumers-financial-firms-scrambling-1504906993.
6 See Joshua D. Wright, Comm’r, Fed. Trade Comm’n, Remarks at the U.S. Chamber of Commerce 7–8 (May 21,
2015), https://www.ftc.gov/system/files/documents/public_statements/644381/150521iotchamber.pdf (stating that
“[r]esearchers have estimated 900 million devices were connected to the Internet in 2009, increasing to 8.7 billion
devices in 2012, and now up to 14 billion devices today,” and describing predictions that between 25 billion and 50
billion devices will be connected to the “Internet of Things” by 2020). For background on the “Internet of Things” see
CRS Report R44227, The Internet of Things: Frequently Asked Questions, by Eric A. Fischer.
7 For statistics on the increasing use of computers and the internet in American homes, see CAMILLE RYAN, U.S.
CENSUS BUREAU, COMPUTER AND INTERNET USE IN THE UNITED STATES: 2016, AMERICAN COMMUNITY SURVEY
REPORTS 39 (Aug. 2018), https://www.census.gov/content/dam/Census/library/publications/2018/.../ACS-39.pdf and
Internet Broadband Fact Sheet, PEW RESEARCH CTR. (Feb. 5, 2018), http://www.pewinternet.org/fact-sheet/internetbroadband/. See also GAO-19-52, supra note 3, at 5–6 (summarizing recent statistics on internet usage in the United
States).
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(such as websites) and “behind the scenes” actors (such as data brokers and advertising
companies) collect, maintain, and use consumers’ information.8 While this data collection can
benefit consumers—for instance, by allowing companies to offer them more tailored products—it
also raises privacy concerns, as consumers often cannot control how these entities use their data.9
As a consequence, the protection of personal data has emerged as a major issue for congressional
consideration.10
Despite the increased interest in data protection, the legal paradigms governing the security and
privacy of personal data are complex and technical, and lack uniformity at the federal level. The
Supreme Court has recognized that the Constitution provides various rights protecting individual
privacy, but these rights generally guard only against government intrusions and do little to
prevent private actors from abusing personal data online.11 At the federal statutory level, while
there are a number of data protection statutes, they primarily regulate certain industries and
subcategories of data.12 The Federal Trade Commission (FTC) fills in some of the statutory gaps
by enforcing the federal prohibition against unfair and deceptive data protection practices.13 But
no single federal law comprehensively regulates the collection and use of personal data.14
In contrast to the “patchwork” nature of federal law, some state and foreign governments have
enacted more comprehensive data protection legislation.15 Some analysts suggest these laws,
which include the European Union’s (EU’s) General Data Protection Regulation (GDPR)16 and
state laws such as the California Consumer Privacy Act (CCPA),17 will create increasingly
8 Edith Ramirez, Chairwoman, Fed. Trade Comm’n, Opening Remarks at PrivacyCon 2017 (Jan. 12, 2017),
https://www.ftc.gov/system/files/documents/videos/privacycon-2017-part-1/ftc_privacycon_2017__transcript_segment_1.pdf (discussing the growing number of actors involved in compiling user data, including
“consumer facing companies” and “behind the scenes” companies); FED. TRADE COMM’N, DATA BROKERS: A CALL FOR
TRANSPARENCY AND ACCOUNTABILITY 11–13 (2014), https://www.ftc.gov/system/files/documents/reports/data-brokerscall-transparency-accountability-report-federal-trade-commission-may-2014/140527databrokerreport.pdf [hereinafter
DATA BROKERS REPORT] (discussing how data brokers obtain consumer information).
9 DATA BROKERS REPORT, supra note 8, at v–vi (discussing benefits and risk to data brokers’ collection of consumer
data).
10 See, e.g., Policy Principles for a Federal Data Privacy Framework in the United States: Hearing before the S.
Comm. on Commerce, Science, and Transp., 116th Cong. (2019) [hereinafter Policy Principles Hearing]; Protecting
Consumer Privacy in the Era of Big Data: Hearing Before the Subcomm. on Consumer Protection and Commerce of
the H. Comm. on Energy and Commerce, 116th Cong. (2019) [hereinafter Era of Big Data Hearing]; Consumer Data
Privacy: Examining Lessons from the European Union’s Data Protection Regulation and the California Consumer
Privacy Act: Hearing Before the S. Comm. on Commerce, Science, and Transp., 115th Cong. (2018) [hereinafter
GDPR and CCPA Hearing]; Examining Safeguards for Consumer Data Privacy: Hearing Before the S. Comm. on
Commerce, Science, and Transp., 115th Cong. (2018) [hereinafter Examining Safeguards Hearing]; Examining the
Current Data Security and Breach Regulatory Notification Regime: Hearing Before the Subcomm. on Fin. Inst. and
Consumer Credit of the H. Comm. on Fin. Servs., 115th Cong. (2018) [hereinafter Current Data Security Hearing].
11 See infra § Constitutional Protections and the Right to Privacy.
12 See infra § Federal Trade Commission Act (FTC Act).
13 See id.
14 See id.
15 Zachary S. Heck, A Litigator’s Primer on European Union and American Privacy Laws and Regulations, 44 LITIG.
59, 59 (2018) (“[T]he United States has a patchwork of laws at both the federal and state levels relating to data
protection and information sharing.”).
16 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the Protection of
Natural Persons with Regard to the Processing of Personal Data and on the Free Movement of Such Data, and
Repealing Directive 95/46/EC (General Data Protection Regulation) [hereinafter GDPR].
17 2018 Cal. Legis. Serv. Ch. 55 (A.B. 375) (West) (codified in CAL. CIV. CODE §§ 1798.100—1798.198).
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overlapping and uneven data protection regimes.18 This fragmented legal landscape coupled with
concerns that existing federal laws are inadequate has led many stakeholders to argue that the
federal government should assume a larger role in data protection policy.19 However, at present,
there is no consensus as to what, if any, role the federal government should play, and any
legislative efforts at data protection are likely to implicate unique legal concerns such as
preemption, standing, and First Amendment rights, among other issues.20
This report examines the current U.S. legal landscape governing data protection, contrasting the
current patchwork of federal data protection laws with the more comprehensive regulatory
models in the CCPA and GDPR. The report also examines potential legal considerations for the
116th Congress should it consider crafting more comprehensive federal data protection
legislation. The report lastly contains an Appendix, which contains a table summarizing the
federal data protection laws discussed in the report.
Origins of American Privacy Protections
The Common Law and the Privacy Torts
Historically, the common law in the United States had little need to protect privacy—as one
commentator has observed, “[s]olitude was readily available in colonial America.”21 Although
common law had long protected against eavesdropping and trespass,22 these protections said little
to nothing about individual rights to privacy, per se. Over time, gradual changes in the
technological and social environment caused a shift in the law. In 1890, Louis Brandeis and
Samuel Warren published a groundbreaking article in the Harvard Law Review entitled The Right
to Privacy.23 Reacting to the proliferation of the press and advancements in technology such as
more advanced cameras, the article argued that the law should protect individuals’ “right to
privacy” and shield them from intrusion from other individuals. The authors defined this
18 See Developing the Administration’s Approach to Consumer Privacy, 83 Fed. Reg. 48600 (Sept. 26, 2018) (“A
growing number of foreign countries, and some U.S. states, have articulated distinct versions for how to address
privacy concerns, leading to a nationally and globally fragmented regulatory landscape.”).
19 See, e.g., infra § The Trump Administration’s Proposed Data Privacy Policy Framework (discussing the Trump
Administration’s plans to develop a federal data privacy policy); Ben Kochman, Tech Giants Want Uniform Privacy
Law, But No GDPR, LAW360 (Sept. 26, 2018), https://www.law360.com/articles/1086064 (“Representatives from
Google LLC, Amazon.com Inc., Apple Inc., Twitter Inc., AT&T Inc. and Charter Communications Inc. all said they
would support some sort of privacy law that would give consumers more control over the way in which their data is
used.”); Harper Neidig, Advocates Draw Battle Lines over National Privacy Law, THE HILL (Nov. 13, 2018),
https://thehill.com/policy/technology/416341-advocates-draw-battle-lines-over-national-privacy-law (discussing
statement of 34 public interest groups advocating for comprehensive federal data privacy legislation).
20 See infra § Considerations for Congress.
21 Daniel J. Solove, A Brief History of Information Privacy Law, in PROSKAUER ON PRIVACY § 1-4 (2006) (citing DAVID
H. FLAHERTY, PRIVACY IN COLONIAL NEW ENGLAND 1 (1972)).
22 See 4 WILLIAM BLACKSTONE, COMMENTARIES ON THE LAWS OF ENGLAND 169 (1769) (“Eaves-droppers, or such as
listen under walls or windows, or the eaves of a house, to harken after discourse, and thereupon to frame slanderous
and mischievous tales, are a common nuisance . . .”); 3 WILLIAM BLACKSTONE, COMMENTARIES ON THE LAWS OF
ENGLAND 208–09 (1769) (discussing trespass).
23 4 HARV. L. REV. 193 (1890).
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emergent right as the “right to be let alone.”24 Scholars have argued that this article created a
“revolution” in the development of the common law.25
In the century that followed Brandeis’s and Warren’s seminal article, most states recognized the
so-called “privacy torts”—intrusion upon seclusion, public disclosure of private facts, false light
or “publicity,” and appropriation.26 These torts revolve around the central idea that individuals
should be able to lead, “to some reasonable extent, a secluded and private life.”27 The Supreme
Court described this evolution of privacy tort law as part of a “strong tide” in the twentieth
century toward the “so-called right of privacy” in the states.28
Despite this “strong tide,” some scholars have argued that these torts, which were developed
largely in the mid-twentieth century, are inadequate to face the privacy and data protection
problems of today.29 Furthermore, some states do not accept all four of these torts or have
narrowed and limited the applicability of the torts so as to reduce their effectiveness.30 As
discussed in greater detail below, state common law provides some other remedies and
protections relevant to data protection, via tort and contract law.31 However, while all of this state
common law may have some influence on data protection, the impact of this judge-made doctrine
is unlikely to be uniform, as courts’ application of these laws will likely vary based on the
particular facts of the cases in which they are applied and the precedents established in the
various states.32
24 Id. at 195–96.
25 Diane L. Zimmerman, Requiem for a Heavyweight: A Farewell to Warren and Brandeis’s Privacy Tort, 68 CORNELL
L. REV. 291 (1983). See also Dorothy J. Glancy, The Invention of the Right to Privacy, 21 ARIZ. L. REV. 1, 1 (1979)
(noting that the Brandeis and Warren article has done “nothing less than add a chapter to our law”) (quoting Letter from
Roscoe Pound to William Chilton (1916)).
26 Solove, supra note 21, § 1-14.
27 RESTATEMENT (SECOND) OF TORTS § 652A (Am. Law Inst. 2018).
28 See Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 487–88 (1975).
29 See, e.g., Neil M. Richards, The Limits of Tort Privacy, 9 J. on TELECOM & HIGH TECH L. 357, 359–60 (2011) (“For
better or for worse, American law currently uses tools developed in the nineteenth and mid-twentieth centuries to deal
with these problems of the twenty-first.”); Neil M. Richards & Daniel J. Solove, Prosser’s Privacy Law: A Mixed
Legacy, 98 CAL. L. REV. 1887, 1889 (2010); Zimmerman, supra note 25, at 362 (arguing that the privacy torts have
“failed to become a useable and effective means of redress for plaintiffs”).
30 See Richards, supra note 29 at 360.
31 See infra § State Data Protection Law.
32 See, e.g., In re Google Inc. Cookie Placement Consumer Privacy Litig., 806 F.3d 125, 150–51 (3d Cir. 2015)
(holding that plaintiffs stated a claim under California invasion of privacy law against Google for placement of tracking
cookies on users’ browsers); In re Vizio, Inc., Consumer Privacy Litig., 238 F. Supp. 3d 1204 (C.D. Cal. 2017)
(although acknowledging that “Courts have been hesitant to extend the tort of invasion of privacy to the routine
collection of personally identifiable information as part of electronic communications,” nonetheless concluding that
plaintiffs stated a claim for invasion of privacy under California and Massachusetts law against “smart TV” company
that collected information on consumer viewing habits); Opperman v. Path, Inc., 205 F. Supp. 3d 1064, 1078–80 (N.D.
Cal. 2016) (holding that there was a triable question of fact in invasion of privacy claim under California law against
software developer that allegedly improperly uploaded address book data without customers’ consent). But see Low v.
LinkedIn Corp., 900 F. Supp. 2d 1010, 1024–25 (N.D. Cal. 2012) (dismissing claim for invasion of privacy under
California law against social networking site that allegedly disclosed to third parties information about users browsing
on LinkedIn); Dwyer v. American Express Co., 652 N.E.2d 1351, 1353–56 (Ill. App. Ct. 1995) (dismissing claims for
invasion of privacy against credit card company for renting lists of consumer purchasing patterns for advertising
purposes).
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Constitutional Protections and the Right to Privacy
As reflected in the common law’s limited remedies, at the time of the founding, concerns about
privacy focused mainly on protecting private individuals from government intrusion rather than
on protecting private individuals from intrusion by others.33 Accordingly, the Constitution’s Bill
of Rights protects individual privacy from government intrusion in a handful of ways and does
little to protect from non-governmental actors. Some provisions protect privacy in a relatively
narrow sphere, such as the Third Amendment’s protection against the quartering of soldiers in
private homes34 or the Fifth Amendment’s protection against self-incrimination.35 The most
general and direct protection of individual privacy is contained in the Fourth Amendment, which
states that “[t]he right of the people to be secure in their persons, houses, papers, and effects,
against unreasonable searches and seizures, shall not be violated . . .”36
For more than 100 years, the Fourth Amendment was generally read to prohibit only entry into
private places rather than to provide general right to privacy.37 However, alongside the
developments in the common law, constitutional law evolved over time to place a greater
emphasis on protecting an individual’s personal privacy. In particular, in 1967, the Supreme
Court in Katz v. United States38 explained that the Fourth Amendment, while not creating a
general “right to privacy,” nonetheless protected “people, not places,” and guarded individual
privacy against certain types of governmental intrusion.39 This principle has continued to evolve
over time, and has come to protect, to some extent, individuals’ interest in their digital privacy.
For example, in the 2018 case of Carpenter v. United States,40 the Supreme Court concluded that
the Fourth Amendment’s protection of privacy extended to protecting some information from
government intrusion even where that information was shared with a third party. In Carpenter,
the Court concluded that individuals maintain an expectation of privacy, protected by the Fourth
Amendment, in the record of their movements as recorded by their cellular provider.41 Carpenter
distinguished earlier cases which had relied upon the principle that information shared with third
parties was generally not subject to Fourth Amendment scrutiny, concluding that “an individual
maintains a legitimate expectation of privacy in the record of his physical movements as captured
through [his cellular phone].”42 The Court’s holding means that, in the future, the government
33 Solove, supra note 21, at § 1-4.
34 U.S. CONST. amend. III (forbidding the quartering of soldiers in private homes).
35 Id. amend. V (in part, prohibiting the government from compelling persons toward self-incrimination in criminal
cases).
36 Id. amend. IV.
37 See e.g., Olmstead v. United States, 277 U.S. 438, 464 (1928) (in rejecting claim that Fourth Amendment prohibited
listening to private telephone calls, stating that “There was no searching. There was no seizure. The evidence was
secured by the use of the sense of hearing and that only. There was no entry of the houses or offices of the
defendants.”).
38 389 U.S. 347 (1967).
39 Id. at 353 (“The government’s activities in electronically listening to and recording the petitioner’s words violated
the privacy upon which he justifiably relied . . . .”).
40 138 S. Ct. 2206 (2018).
41 Id. at 2218–20.
42 Id. at 2217 (citing United States v. Miller, 425 U.S. 435, 443 (1976) and Smith v. Maryland, 442 U.S. 735, 741
(1979)).
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must obtain a warrant supported by probable cause to obtain this information.43 The Fourth
Amendment thus provides a limited bulwark against government intrusion into digital privacy.
In addition to the protection provided by the Fourth Amendment, in the 1960s and 1970s, the
Court concluded that the Fourteenth Amendment’s guarantee of “liberty”44 implied the existence
of a more general right of privacy, protecting individuals from government intrusion even outside
the “search and seizure” context.45 In the 1977 case Whalen v. Roe, the Supreme Court explained
that this constitutional right of privacy “in fact involve[s] at least two different kinds of interests.
One is the individual interest in avoiding disclosure of personal matters, and another is the
interest in independence in making certain kinds of important decisions.”46 The second of these
interests relates primarily to individual rights concerning the “intimacies of [persons’] physical
relationship,”47 as well as the right to abortion,48 and has little connection to data protection.
However, the first of the interests listed in Whalen could potentially relate to data protection. This
interest, the right to avoid certain disclosures, has come to be known as the right to “informational
privacy.”49
Despite its broad expression in Whalen, every Supreme Court case to consider the informational
privacy right has rejected the constitutional claim and upheld the government program alleged to
have infringed on the right.50 In Whalen itself, physicians and patients challenged a New York law
that required the recording of the names and addresses of all persons who had obtained certain
drugs for which there was both a lawful and unlawful market.51 Although the Court
acknowledged that the statute “threaten[ed] to impair . . . [the plaintiffs’] interest in the
nondisclosure of private information,” the Court observed that the disclosures were an “essential
part of modern medical practice” and the New York law had protections in place against
unwarranted disclosure that showed a “proper concern” for the protection of privacy.52 Together,
the Court found these factors sufficient to uphold the law.53 In the wake of Whalen and Nixon v.
Administrator of General Services54—a case decided the same year as Whalen that also
43 Id. at 2213–14.
44 U.S. CONST. amend. V (“No person shall . . . be deprived of life, liberty, or property, without due process of law.”);
id. amend. XIV (“[N]or shall any State deprive any person of life, liberty, or property, without due process of law
. . . .”).
45 See Whalen v. Roe, 429 U.S. 589, 599–600, 599 n.23 (1977); Griswold v. Connecticut, 381 U.S. 479, 485 (1965)
(“The present case, then, concerns a relationship lying within the zone of privacy created by several fundamental
constitutional guarantees.”).
46 Whalen, 429 U.S. at 600.
47 See Lawrence v. Texas, 539 U.S. 558, 577–78 (2003). See also Eisenstadt v. Baird, 405 U.S. 438, 453 (1972) (“If the
right of privacy means anything, it is the right of the individual, married or single, to be free from unwarranted
governmental intrusion into matters so fundamentally affecting a person as the decision whether to bear or beget a
child.”); Griswold, 381 U.S. at 485.
48 See Roe v. Wade, 410 U.S. 113, 152–53 (1973) (“This right of privacy, whether it be founded in the Fourteenth
Amendment’s concept of personal liberty and restrictions upon state action, as we feel it is, or, as the District Court
determined, in the Ninth Amendment’s reservation of rights to the people, is broad enough to encompass a woman’s
decision whether or not to terminate her pregnancy.”) (internal citations omitted).
49 NASA v. Nelson, 562 U.S. 134, 159 (2011).
50 DANIEL J. SOLOVE & PAUL M. SCHWARTZ, INFORMATION PRIVACY LAW 564 (6th ed. 2018) (“Subsequent to Whalen
and Nixon the Court did little to develop the right of information privacy . . .”).
51 Whalen, 429 U.S. at 591.
52 Id. at 604–05.
53 Id. at 605.
54 433 U.S. 425, 458–60 (1977) (rejecting constitutional privacy claim against Presidential Recordings and Materials
Preservation Act; observing that Act had regulations aimed at preventing “undue dissemination of private materials”
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considered the right to informational privacy—courts have struggled to articulate the precise
contours of the right. The most recent Supreme Court case to consider the right to informational
privacy, NASA v. Nelson,55 went so far as to suggest that the right might not exist, “assuming
without deciding” that the right existed in the course of rejecting the constitutional claim
challenge to a government background check program for hiring.56 Despite the Supreme Court’s
lack of clarity about the right to informational privacy, “most federal circuit courts” recognize the
right to various extents.57
All of the constitutional rights involving privacy, like the common law privacy torts, focus on
public disclosure of private facts. This focus limits their potential influence on modern data
privacy debates, which extends beyond the disclosure issue to more broadly concern how data is
collected, protected, and used.58 Perhaps more importantly, whatever the reach of the
constitutional right to privacy, the “state action doctrine” prevents it from being influential
outside the realm of government action. Under this doctrine, only government action is subject to
scrutiny under the Constitution, but purely private conduct is not proscribed, “no matter how
unfair that conduct may be.”59 As a result, neither the common nor constitutional law provides a
complete framework for considering many of the potential threats to digital privacy and consumer
data. Rather, the most important data protection standards come from statutory law.
Federal Data Protection Law
Given the inherent limitations in common law and constitutional protections, Congress has
enacted a number of federal laws designed to provide statutory protections of individuals’
personal information. In contrast with the scheme prevalent in Europe and some other countries,
rather than a single comprehensive law, the United States has a “patchwork” of federal laws that
govern companies’ data protection practices.60
These laws vary considerably in their purpose and scope. Most impose data protection obligations
on specific industry participants—such as financial institutions, health care entities, and
and that any privacy intrusion must be weighed against “public interest”).
55 562 U.S. 134 (2011).
56 See NASA, 562 U.S. at 138 (“We assume, without deciding, that the Constitution protects a privacy right of the sort
mentioned in Whalen and Nixon. We hold, however, that the challenged portions of the Government’s background
check do not violate this right in the present case.”). Justices Scalia and Thomas concurred in the judgment, expressing
their view that “[a] federal constitutional right to ‘informational privacy’ does not exist.” Id. at 159–60 (Scalia, J.,
concurring).
57 See SOLOVE & SCHWARTZ, supra note 50, at 564 (citing cases). See also Hancock v. Cty. of Renssalaer, 882 F.3d 58,
65–68 (2d Cir. 2018) (articulating the test for balancing the interests in the disclosure of medical records to the
government, concluding that general issues of material fact precluded summary judgment on claim that county jail had
violated employees’ Fourteenth Amendment rights); Big Ridge, Inc. v. Fed. Mine Safety and Health Review Comm’n,
715 F.3d 631, 649 (7th Cir. 2013) (“Whether the government can require banks, medical providers, or employers to
turn over private medical records of customers, patients, or employees that are in their possession is a difficult question
of balancing.”).
58 See supra notes 3, 10, 18–20 and accompanying text. See also infra § Considerations for Congress.
59 National Collegiate Athletic Ass’n v. Tarkanian, 488 U.S. 179, 191 (1988).
60 Heck, supra note 15, at 59; see also Daniel Solove & Woodrow Hartzog, The FTC and the New Common Law of
Privacy, 114 Colum. L. Rev. 583, 587 (2014) (“The statutory law is diffuse and discordant . . . . Unlike the privacy
laws of many industrialized nations, which protect all personal data in an omnibus fashion, privacy law in the United
States is sectoral, with different laws regulating different industries and economic sectors. . . . This sectoral approach
also leaves large areas unregulated . . . .”).
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communications common carriers—or specific types of data, such as children’s data.61 Other
laws, however, supplement the Constitution’s limited privacy protections and apply similar
principles to private entities. The Stored Communications Act (SCA), for instance, generally
prohibits the unauthorized access or disclosure of certain electronic communications stored by
internet service providers.62 Lastly, some laws prohibit broad categories of conduct that, while not
confined to data protection, limit how companies may handle personal data. Most notably, the
Federal Trade Commission Act (FTC Act) prohibits “unfair or deceptive acts or practices.”63 As
some scholars have pointed out, the FTC has used its authority under the FTC Act to develop
norms and principles that effectively fill in the gaps left by other privacy statutes.64
These laws are organized below, beginning with those most narrowly focused on discrete
industries and moving toward more generally applicable laws. In light of its gap-filling function,
this section lastly discusses the FTC Act—along with the Consumer Financial Protection Act
(CFPA), which covers similar types of conduct.65 The Appendix to this report contains a table
summarizing the federal data protection laws discussed.66
Gramm-Leach-Bliley Act (GLBA)
The Gramm-Leach-Bliley Act (GLBA)67 imposes several data protection obligations on financial
institutions.68 These obligations are centered on a category of data called “consumer”69
“nonpublic personal information”70 (NPI), and generally relate to: (1) sharing NPI with third
61 See infra §§ Gramm-Leach-Bliley Act (GLBA), Health Insurance Portability and Accountability Act (HIPAA), The
Communications Act, and Children’s Online Privacy Protection Act (COPPA).
62 Orin S. Kerr, A User’s Guide to the Stored Communications Act, and a Legislator’s Guide to Amending It, 72 GEO.
WASH. L. REV. 1208, 1212 (2004) (“The [SCA] creates a set of Fourth Amendment-like privacy protections by statute,
regulating the relationship between government investigators and service providers in possession of users’ private
information.”).
63 15 U.S.C. § 45(a).
64 Solove & Hartzog, supra note 60, at 587–88 (“It is fair to say that today FTC privacy jurisprudence is the broadest
and most influential regulating force on information privacy in the United States . . . . Because so many companies fall
outside of specific sectoral privacy laws, the FTC is in many cases the primary source of regulation.”); Anna
Karapetyan, Developing a Balanced Privacy Framework, 27 S. CAL REV. L. & SOC. JUST. 197, 213 (“The Federal Trade
Commission (‘FTC’) . . . steps in to fill gaps in statutory protections. The FTC uses its broad authority to restrict ‘unfair
or deceptive acts or practices’ to protect consumer privacy. Unlike federal statutory laws, the FTC is not limited to
specific sectors of the economy and its authority applies to most companies acting in commerce.”).
65 This section focuses on federal laws applicable to companies that collect and maintain personal information. It does
not cover federal laws primarily applicable to government agencies or government employees, such as the Privacy Act
(5 U.S.C. § 552a) or the E-Government Act (44 U.S.C. § 3501 note).
66 See infra § Summary of Federal Data Protection Laws.
67 15 U.S.C. §§ 6801–6809.
68 Under GLBA, a “financial institution” is defined as “any institution the business of which is engaging in financial
activities” as described in section 49(k) of the Bank Holding Company Act (12 U.S.C. § 1843(k)). 15 U.S.C. § 6809(3).
This definition encompasses a broad range of entities, such as “banks; real estate appraisers and title companies;
companies that provide consumer financing, insurance underwriters and agents; wire transfer, check cashing, and check
printing companies; mortgage brokers; and travel agents that operate in connection with financial services.” SARAH J.
AUCHTERLONIE & ALEXANDRA E. SICKLER, CONSUMER FINANCE LAW AND COMPLIANCE 13–45 (2017).
69 GBLA defines “consumer” as an “individual who obtains, from a financial institution, financial products or services
which are to be used primarily for personal, family, or household purposes” or “the legal representative of such an
individual.” 15 U.S.C. § 6809(9).
70 GBLA defines “nonpublic personal information” as “personally identifiable financial information” that is not
“publicly available” and is either is “provided by a consumer to a financial institution,” “resulting from any transaction
with the consumer or any service performed for the consumer,” or “otherwise obtained by the financial institution.” Id.
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parties, (2) providing privacy notices to consumers, and (3) securing NPI from unauthorized
access.
First, unless an exception applies, GLBA and its implementing regulations prohibit financial
institutions from sharing NPI with non-affiliated third parties unless they first provide the
consumers with notice and an opportunity to “opt-out.”71 Furthermore, financial institutions are
prohibited altogether from sharing account numbers or credit card numbers to third parties for use
in direct marketing.72 Second, financial institutions must provide “clear and conspicuous” initial
and annual notices to customers describing their privacy “policies and practices.”73 These notices
must include, among other things, the categories of NPI collected and disclosed, the categories of
third parties with which the financial institution shares NPI, and policies and practices with
respect to protecting the confidentiality and security of NPI.74 Third, GLBA and its implementing
regulations (often referred to as the “Safeguards Rule”75) require financial institutions to maintain
“administrative, technical, and physical safeguards” to “insure the security and confidentiality” of
“customer”76 (as opposed to “consumer”) NPI, and to protect against “any anticipated threats or
hazards” or “unauthorized access” to such information.77 Financial institutions regulated by
federal banking agencies78 are further required to implement a program for responding to the
unauthorized access of customer NPI.79
The Consumer Financial Protection Bureau (CFPB), FTC, and federal banking agencies share
civil enforcement authority for GLBA’s privacy provisions.80 However, the CFPB has no
§ 6809(4).
71 Id. § 6802; 12 C.F.R. § 1016.10(a). The opt-out notice must be “clear and conspicuous” and must provide a
“reasonable means” to exercise the opt-out right, such as through “designate[d] check boxes” or providing a “toll-free
telephone number” that consumers may call. 12 C.F.R. § 1016.7(a). The opt-out notice can be given in the same
electronic or written form as the initial notice of the company’s privacy policy. Id. § 1016.7(b). Exceptions to the optout requirement include situations where a financial institution shares NPI with a third party performing services on
behalf of the financial institution, such as the marketing of the financial institution’s own products, provided that the
third party is contractually obligated to maintain the confidentiality of the information. 15 U.S.C. § 6802(b)(2); 12
C.F.R. § 1016.13. Exceptions further include situations where a financial institution shares NPI with third parties to
“effect, administer, or enforce a transaction” requested by the consumer. 15 U.S.C. § 6802(e); 12 C.F.R. § 1016.14.
72 Specifically, financial institutions are prohibited from disclosing such information to third parties, other than a
consumer reporting agency, “for use in telemarketing, direct mail marketing, or other marketing through electronic mail
to the consumer.” 15 U.S.C. § 6802(d); 16 C.F.R. § 313.12(a).
73 15 U.S.C. § 6803(a); 12 C.F.R. §§ 1016.4–1016.6.
74 12 C.F.R. § 1016.6(a).
75 See, e.g., Financial Institutions and Customer Information: Complying with the Safeguards Rule, FED. TRADE
COMM’N (Apr. 2006), https://www.ftc.gov/tips-advice/business-center/guidance/financial-institutions-customerinformation-complying.
76 Unlike the disclosure requirements, the safeguard requirements only apply to customers’ NPI, rather than consumers’
NPI. 15 U.S.C. § 6801(b); 16 C.F.R. § 314.3. A customer is defined as someone who has a “continuing relationship”
with the financial institution, such as someone who has obtained a loan or who has opened a credit or investment
account. 16 C.F.R. § 313.3(h)–(i); see also 12 C.F.R. § 1016.3(i)–(j).
77 15 U.S.C. § 6801(a); 16 C.F.R. § 314.3. Such safeguards must include, among other things, the designation of an
information security program coordinator, a risk assessment process, and the implementation and testing of information
safeguards designed to control risks identified through the risk assessment process. 16 C.F.R. § 314.4.
78 Federal banking agencies include the Comptroller of the Currency, the Board of Governors of the Federal Reserve
System, and the Federal Deposit Insurance Corporation. 12 U.S.C. § 1813.
79 70 Fed. Reg. 15736 (2005).
80 15 U.S.C. § 6805(a). The CFPB has exclusive enforcement authority over depository institutions (such as banks,
thrifts, and credit unions) with over $10 billion in total assets, and federal banking agencies have exclusive enforcement
authority over depository institutions and credit unions with $10 billion or less in total assets. Id. § 6805(a). The CFPB
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enforcement authority over GLBA’s data security provisions.81 Under the data security
provisions, federal banking regulators have exclusive enforcement authority for depository
institutions, and the FTC has exclusive enforcement authority for all non-depository institutions.82
GLBA does not specify any civil remedies for violations of the Act, but agencies can seek
remedies based on the authorities provided in their enabling statutes, as discussed below.83 GLBA
also imposes criminal liability on those who “knowingly and intentionally” obtain or disclose
“customer information” through false or fraudulent statements or representations.84 Criminal
liability can result in fines and up to five years’ imprisonment.85 GLBA does not contain a private
right of action that would allow affected individuals to sue violators.86
Health Insurance Portability and Accountability Act (HIPAA)
Under the Health Insurance Portability and Accountability Act (HIPAA), the Department of
Health and Human Services (HHS) has enacted regulations protecting a category of medical
information called “protected health information” (PHI).87 These regulations apply to health care
providers, health plans, and health care clearinghouses (covered entities), as well as certain
“business associates”88 of such entities.89 The HIPAA regulations generally speak to covered
and FTC share enforcement authority over the remaining non-depository financial institutions the GLBA covers. Id.
81 Id. § 6805(a)(8) (excluding the CFPB from jurisdiction over the data security provisions).
82 Id. § 6805(a)(1)–(7).
83 See, e.g., JOSEPH BECKMAN, LAW AND BUSINESS OF COMPUTER SOFTWARE § 13:3 (2018) (“The agency enforcing the
GLBA will then typically proceed under its own grant of authority and general ability to impose fines.”). For instance,
under the CFPA, the CFPB can seek a broad range of remedies, including equitable relief and penalties, and under the
FTC Act the FTC can seek equitable relief. See infra §§ Consumer Financial Protection Act (CFPA) and Federal Trade
Commission Act (FTC Act).
84 15 U.S.C. §§ 6821, 6823.
85 Id. § 6823.
86 See, e.g., Barroga-Hayes v. Settenbrino, P.C., No. 10-CV-5298, 2012 WL 1118194, at *6 n. 5 (E.D.N.Y. Mar. 30,
2012) (noting that “there is no private right of action under the GLBA”).
87 45 C.F.R. part 164. HIPAA regulations define “protected health information” as “individually identifiable health
information” transmitted or maintained in “electronic media” or “any other form or medium.” Id. § 160.103. In turn,
“individually identifiable health information” is defined as health information that: (1) “identifies” or can reasonably
“be used to identify” an individual; (2) is “created or received by a health care provider, health plan, employer, or
health care clearinghouse”; and (3) relates to an individual’s physical or mental health, health care provision, or
payment for provision of health care. Id. “Individually identifiable heath information” does not include data meeting
certain “de-identification” requirements. Id. § 164.514. Under these requirements, information will not be considered
individually identifiable if either: (1) an expert determines that “the risk is very small that the information could be
used” to “identify an individual who is a subject of the information” and the expert “[d]ocuments the methods and
results of the analysis that justify such determination”; or (2) the information excludes 18 listed identifiers—such as the
individual’s name, address information, Social Security number, and contact information—and the covered entity does
not have “actual knowledge” that the information could be used to identify the individual. Id.
88 A “business associate” is defined as “with respect to a covered entity, a person who: (i) [o]n behalf of such covered
entity . . . , but other than in the capacity of a member of the workforce of such covered entity or arrangement, creates,
receives, maintains, or transmits protected health information for a function or activity regulated by this subchapter
. . . ; or (ii) [p]rovides, other than in the capacity of a member of the workforce of such covered entity, legal, actuarial,
accounting, consulting, data aggregation . . . , management, administrative, accreditation, or financial services to or for
such covered entity, or to or for an organized health care arrangement in which the covered entity participates, where
the provision of the service involves the disclosure of protected health information from such covered entity or
arrangement, or from another business associate of such covered entity or arrangement, to the person.” Id. § 160.103.
89 Id. §§ 164.104, 164.306, 164.502.
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entities’: (1) use or sharing of PHI, (2) disclosure of information to consumers, (3) safeguards for
securing PHI, and (4) notification of consumers following a breach of PHI.
First, with respect to sharing, HIPAA’s privacy regulations generally prohibit covered entities
from using PHI or sharing it with third parties without patient consent,90 unless such information
is being used or shared for treatment, payment, or “health care operations”91 purposes, or unless
another exception applies.92 Covered entities generally may not make treatment or services
conditional on an individual providing consent.93 Second, with respect to consumer disclosures,
covered entities must provide individuals with “adequate notice of the uses and disclosures of
[PHI] that may be made by the covered entity, and of the individual’s rights and the covered
entity’s legal duties with respect to [PHI].”94 These notices must be provided upon consumer
request, and covered entities maintaining websites discussing their services or benefits must
“prominently post” the notices on their websites.95 Furthermore, an individual has the right to
request that a covered entity provide him with a copy of his PHI that is maintained by the covered
entity.96 In some cases, an individual may also request that the covered entity provide information
regarding specific disclosures of the individual’s PHI, including the dates, recipients, and
purposes of the disclosures.97 Third, with respect to data security, covered entities must maintain
safeguards to prevent threats or hazards to the security of electronic PHI.98 Lastly, HIPAA
regulations contain a data breach notification requirement, requiring covered entities to, among
other things, notify the affected individuals within 60 calendar days after discovering a breach of
“unsecured”99 PHI.100
90 Valid consent must be accompanied by, among other things, a description of the information to be used or disclosed,
and a description of the purpose of the requested use or disclosure, and the individual’s signature. Id. § 164.508(c).
91 “Health care operations” are defined as including a number of activities, such as: (1) “[c]onducting quality
assessment and improvement activities,” (2) evaluating health care professionals and health plan performance,
(3) underwriting and “other activities related to the creation, renewal, or replacement” of health insurance or health
benefits contracts; (4) “conducting or arranging for medical review, legal services, and auditing functions, including
fraud and abuse detection and compliance programs”; (5) business planning and development such as “conducting costmanagement and planning-related analyses related to managing and operating the entity,” and (6) “business
management and general administrative activities of the entity.” Id. § 164.501.
92 Id. §§ 164.506–508. Exceptions to the consent requirement include, among other things, when the use or disclosure
is required by law, for public health activities, or for law enforcement purposes. Id. § 164.512.
93 Id. § 164.508 (b)(4). Several exceptions apply to this rule, such as when the treatment is research-related or when
“the authorization sought is for the health plan’s eligibility or enrollment determinations relating to the individual or for
its underwriting or risk rating determinations.” Id.
94 Id. § 164.520(a).
95 Id. § 164.520(c). The regulations further contain specific requirements for certain categories of covered entities; in
particular, health plans must provide notices at the time an individual enrolls in the plan and at least once every three
years thereafter. Id. § 164.520(c)(1). Health care providers must provide the notice by the “date of the first service
delivery,” or, for emergency treatment situations, “as reasonably practicable” after the treatment; they must further
make a “good faith effort” to obtain a written acknowledgement of receipt (except for emergency treatment situations),
and they must post the notice in a “clear and prominent location” at any physical service delivery site and have the
notices available for individuals to take with them upon request. Id. § 164.520(c)(2).
96 Id. § 164.524(a). There are several exceptions to this right; in particular, individuals do not have a right to access: (1)
psychotherapy notices or (2) information compiled in reasonable anticipation of, or for use in, a civil, criminal, or
administrative proceeding. Id. § 164.524(a)(1).
97 Id. §164.528.
98 Id. §§ 164.302–318.
99 “Unsecured” PHI is defined as PHI that “is not rendered unusable, unreadable, or indecipherable to unauthorized
persons through the use of a technology or methodology specified by the Secretary . . . .” Id. § 164.402.
100 Id. §§ 164.400–414. HIPAA regulations define a “breach” as the “acquisition, access, use, or disclosure of protected
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Violations of HIPAA’s privacy requirements can result in criminal or civil enforcement. HHS
possesses civil enforcement authority and may impose civil penalties, with the amount varying
based on the level of culpability.101 The Department of Justice has criminal enforcement authority
and may seek fines or imprisonment against a person who, in violation of HIPAA’s privacy
requirements, “knowingly” obtains or discloses “individually identifiable health information” or
“uses or causes to be used a unique health identifier.”102 HIPAA does not, however, contain a
private right of action that would allow aggrieved individuals to sue alleged violators.103
Fair Credit Reporting Act (FCRA)
The Fair Credit Reporting Act (FCRA)104 covers the collection and use of information bearing on
a consumer’s creditworthiness. FCRA and its implementing regulations govern the activities of
three categories of entities: (1) credit reporting agencies (CRAs),105 (2) entities furnishing
information to CRAs (furnishers),106 and (3) individuals who use credit reports issued by CRAs
(users).107 In contrast to HIPAA or GLBA, there are no privacy provisions in FCRA requiring
entities to provide notice to a consumer or to obtain his opt-in or opt-out consent before collecting
or disclosing the consumer’s data to third parties. FCRA further has no data security provisions
requiring entities to maintain safeguards to protect consumer information from unauthorized
access. Rather, FCRA’s requirements generally focus on ensuring that the consumer information
reported by CRAs and furnishers is accurate and that it is used only for certain permissible
purposes.108
health information in a manner not permitted under [HIPAA’s privacy regulations] which compromises the security or
privacy of the protected health information.” Id. § 164.402. This definition contains several exclusions, including where
the covered entity has a “good faith belief that an unauthorized person to whom the disclosure was made would not
reasonably have been able to retain such information.” Id
101 42 U.S.C. § 1320d-5; 45 C.F.R. § 160.404. The amounts range from $100 per violation (with a total maximum of
$25,000 per year for identical violations) up to $50,000 per violation (with a total maximum of $1,500,000 per year for
identical violations). 45 C.F.R. § 160.404(b). The low-end of the penalty spectrum applies when the offender “did not
know and, by exercising reasonable diligence, would not have known” of the violation, and the high-end of the penalty
spectrum applies when “it is established that the violation was due to willful neglect and was not corrected during the
30-day period beginning on the first date the covered entity or business associate liable for the penalty knew, or by
exercising reasonable diligence, would have known that the violation occurred.” Id.
102 42 U.S.C. § 1320d-6. See also Office of Civil Rights, Enforcement Process, HEALTH & HUMAN SERVICES (June 7,
2017), https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/enforcement-process/index.html (“OCR
also works in conjunction with the Department of Justice (DOJ) to refer possible criminal violations of HIPAA.”).
Ordinary criminal violations can result in up to $50,000 in fines and up to one year imprisonment. 42 U.S.C. § 1320d6(b)(1). However, if the offense is committed under false pretenses, then liability can result in up to $100,000 in fines
and up to five years imprisonment. Id. § 1320d-6(b)(2). If the offense is committed with an intent to “sell, transfer, or
use” individually identifiable health information for commercial advantage, personal gain, or malicious harm, then
liability can result in up to $250,000 in fines and up to ten years imprisonment. Id. § 1320d-6(b)(3).
103 See, e.g., Univ. of Colo. Hosp. v. Denver Pub. Co., 340 F. Supp. 2d 1142, 1143 (D. Colo. 2004) (holding that no
private right of action exists under HIPAA).
104 15 U.S.C. §§ 1681–1681x.
105 A CRA is any entity that, for a fee or on a cooperative nonprofit basis, regularly assembles or evaluates “consumer
credit information” or “other information on consumers for the purpose of furnishing consumer reports to third parties,
and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer
reports.” Id. § 1681a(f).
106 FCRA regulations define a “furnisher” as any entity that provides a CRA with information “relating to consumers”
for inclusion in a consumer report. 12 C.F.R. § 1022.41(c).
107 AUCHTERLONIE & SICKLER, supra note 68, at 13-39.
108 See, e.g., CHI CHI WU, FAIR CREDIT REPORTING § 1.3.1 (2013) (“The FCRA attempts to protect consumers’ privacy
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With respect to accuracy, CRAs must maintain reasonable procedures to ensure the accuracy of
information used in “consumer reports.”109 CRAs must further exclude adverse information, such
as “accounts placed in collection” or civil judgements, from consumer reports after a certain
amount of time has elapsed.110 Furnishers must similarly establish reasonable policies and
procedures to ensure the accuracy of the information reported to CRAs and may not furnish to a
CRA any consumer information if they have reasonable cause to believe that information is
inaccurate.111 Consumers also have the right to review the information CRAs have collected on
them to ensure such information is accurate. CRAs must disclose information contained in a
consumer’s file upon the consumer’s request, as well as the sources of the information and the
identity of those who have recently procured consumer reports on the consumer.112 Should a
consumer dispute the accuracy of any information in his file, CRAs and furnishers must
reinvestigate the accuracy of the contested information.113
In addition to the accuracy requirements, under FCRA consumer reports may be used only for
certain permissible purposes such as credit transactions.114 Accordingly, a CRA may generally
furnish consumer reports to a user only if it “has a reason to believe” the user intends to use it for
a permissible purpose.115 Likewise, users may “use or obtain a consumer report” only for a
permissible purpose.116 Along with the permissible purpose requirement, users must further notify
consumers of any “adverse action” taken against the consumer based on the report.117 Adverse
actions include refusing to grant credit on substantially the terms requested, reducing insurance
coverage, and denying employment.118
and reputations by placing various obligations on persons who use or disseminate credit information about consumers.
Consumer reporting agencies must adopt reasonable procedures to ensure that the information they disseminate is
accurate and up-to-date and that it is furnished only to users with certain permissible purposes.”).
109 15 U.S.C. § 1681e(b). “Consumer reports” are defined as communications by a CRA about a consumer, which are
“used or expected to be used” to evaluate the consumer for credit, insurance, employment or another permissible
purpose under the Act. Id. § 1681a(d).
110 Id. § 1681c(a). Generally, adverse information may not be reported once the information “antedates the report by
more than seven years.” Id. There are certain exceptions, however, to this general rule. For instance, bankruptcy cases
may be reported for up to ten years. Id. § 1681c(a)(1).
111 Id. § 1681s-2(a)(1)(A); 12 C.F.R. § 1022.42.
112 15 U.S.C. § 1681g(a). If the report was procured for employment purposes, then CRAs must identify each procuring
individual in the past two years. Id. § 1681g(a)(3)(A)(i). For any other purpose, CRAs need only identify any individual
who has procured a consumer report in the past year. Id. § 1681g(a)(3)(A)(ii).
113 15 U.S.C. §§ 1681i(a), 1681s-2(b); 12 C.F.R. § 1022.43.
114 Other permissible purposes include, among other things, using the information for (1) employment purposes,
(2) insurance underwriting involving the consumer, (3) evaluating a consumer’s eligibility for a “license or benefit
granted by a governmental instrumentality required by law to consider an applicant’s financial responsibility or status,”
or (4) a “legitimate business need” in connection with a business transaction initiated by the consumer or the review of
an account to determine whether the consumer continues to meet the terms of the account. 15 U.S.C. § 1681b(a).
115 Id. at § 1681b(a)(3).
116 Id. § 1681m(f).
117 Id. § 1681m(a).
118 Id. §§ 1681a(k)(1), 1691(d)(6).
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The FTC and the CFPB share civil enforcement authority over FCRA,119 with each agency
possessing enforcement authority over entities subject to their respective jurisdictions.120 In
addition to government enforcement, FCRA provides a private right of action for consumers
injured by willful or negligent violations of the Act.121 Consumers bringing such actions for
negligent violations of the Act may recover actual damages, attorney’s fees, and other litigation
costs.122 For willful violations, consumers may recover either actual damages or statutory
damages ranging from $100 to $1,000, attorney’s fees, other litigation costs, and “such amount of
punitive damages as the court may allow.”123 FCRA also imposes criminal liability on any
individual who knowingly and willfully obtains consumer information from a CRA under false
pretenses and on any officer or employee of a CRA who knowingly and willfully provides
consumer information to a person not authorized to receive that information.124
The Communications Act
The Communications Act of 1934 (Communications Act or Act), as amended,125 established the
Federal Communications Commission (FCC) and provides a “comprehensive scheme” for the
regulation of interstate communication.126 Most relevant to this report, the Communications Act
includes data protection provisions applicable to common carriers, cable operators, and satellite
carriers.
Common Carriers
The Telecommunications Act of 1996127 amended the Communications Act to impose data
privacy and data security requirements on entities acting as common carriers.128 Generally,
common carrier activities include telephone and telegraph services but exclude radio
broadcasting, television broadcasting, provision of cable television, and provision of broadband
119 Id. § 1681s; see also ROBERT BROWNSTONE & TYLER NEWBY, FAIR CREDIT REPORTING ACT GENERALLY, DATA
SECURITY & PRIVACY LAW § 9:139 (2018) (“[T]he Consumer Financial Protection Bureau (CFPB) assumed concurrent
jurisdiction, and now rulemaking and enforcement duties for the FCRA are shared by the CFPB and the FTC.”).
Because the two agencies’ jurisdiction overlaps, the FTC and CFPB have executed a Memorandum of Understanding
(MOU) in which they agreed to coordinate enforcement activities. See Memorandum of Understanding Between the
Consumer Financial Protection Bureau and the Federal Trade Commission (2012), https://www.ftc.gov/system/files/
120123ftc-cfpb-mou.pdf.
120 15 U.S.C. §§ 1681s(a), (b)(H).
121 Id. §§ 1681n–1681o. But see infra § Private Rights of Action and Standing (discussing limitations on this private
right of action).
122 15 U.S.C. § 1681o(a).
123 Id. § 1681n(a).
124 Id. §§ 1681q–1681r. Criminal liability can result in fines and up to two years imprisonment. Id.
125 47 U.S.C. ch. 5.
126 Benanti v. United States, 355 U.S. 96, 104 (1957).
127 Pub. L. No. 104-104, 110 Stat. 56 (1996) (codified throughout 47 U.S.C.).
128 Specifically, the act uses the term “telecommunications carrier,” which the FCC has interpreted as synonymous with
a “common carrier.” In the Matter of AT&T Submarine Systems, Inc., 13 FCC Rcd. 21585, 21587–21588 (F.T.C.
1998) (“As the Commission has previously held, the term ‘telecommunications carrier’ means essentially the same as
common carrier.”). The term “telecommunications carrier” is defined as “any provider of telecommunications
services.” 47 U.S.C. § 153(51). “Telecommunication service” is further defined as “the offering of telecommunications
for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless
of the facilities used.” Id. § 153(53).
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internet.129 The privacy and security requirements imposed on entities acting as common
carriers130 are primarily centered on a category of information referred to as “customer
proprietary network information (CPNI).”131 CPNI is defined as information relating to the
“quantity, technical configuration, type, destination, location, and amount of use of a
telecommunications service subscribed to by any customer of a telecommunications carrier,” and
is “made available to the carrier by the customer solely by virtue of the carrier-customer
relationship.”132
Section 222(c) of the Communications Act and the FCC’s implementing regulations set forth
carriers’ obligations regarding CPNI. These provisions cover three main issues. First, carriers
must comply with certain use and disclosure rules. Section 222(c) imposes a general rule that
carriers may not “use, disclose, or permit access to” “individually identifiable”133 CPNI without
customer approval,134 unless a particular exception applies.135 Before a carrier may solicit a
customer for approval to use or disclose their CPNI, it must notify customers of their legal rights
regarding CPNI and provide information regarding the carrier’s use and disclosure of CPNI.136
Second, carriers must implement certain safeguards to ensure the proper use and disclosure of
CPNI.137 These safeguards must include, among other things, a system by which the “status of a
customer’s CPNI approval can be clearly established” prior to its use, employee training on the
authorized use of CPNI, and “reasonable measures” to discover and protect against attempts to
129 See, e.g., id. § 153(11) (“a person engaged in radio broadcasting shall not . . . be deemed a common carrier”); United
States v. Radio Corp. of Am., 358 U.S. 334, 349 (1959) (“In contradistinction to communication by telephone and
telegraph, which the Communications Act recognizes as a common carrier activity . . . the Act recognizes that
broadcasters are not common carriers and are not to be dealt with as such.”) (internal quotations omitted); FCC v.
Midwest Video Corp., 440 U.S. 689, 708–9 (1979) (“The Commission may not regulate cable systems as common
carriers, just as it may not impose such obligations on television broadcasters.”); FCC Order, Restoring Internet
Freedom, FCC 17-166 (Jan. 4, 2018) (reversing a 2015 order classifying broadband internet access service as a
common-carriage service and instead classifying it as an “information service”).
130 As a recent decision by the U.S. Court of Appeals for the Ninth Circuit clarified, common carrier classification is
activity-based rather than status-based. FTC v. AT&T Mobility LLC, 883 F.3d 848, 850 (9th Cir. 2018) (“[W]e
conclude that the [common carrier exemption under the FTC Act] is activity-based. The phrase ‘common carriers
subject to the Acts to regulate commerce’ thus provides immunity from FTC regulation only to the extent that a
common carrier is engaging in common-carrier services.”); see also Nat’l Ass’n of Regulatory Util. Comm’rs v. FCC,
533 F.2d 601, 608 (D.C. Cir. 1976) (“[O]ne can be a common carrier with regard to some activities but not to others.”).
131 47 U.S.C. § 222(h)(1).
132 Id. § 222(h)(1). The Act further states that CPNI includes “information contained in the bills pertaining to telephone
exchange service or telephone service received by a customer of a carrier” but does not include “subscriber list
information.” Id.
133 “Individually identifiable” is not defined in the statute or regulations. See id. §§ 153, 222(h); 47 C.F.R. § 64.2003.
134 The regulations provide that, generally, customer approval must be “opt-in” approval. 47 C.F.R. §§ 64.2007(b).
“Opt-in approval” requires that “the carrier obtain from the customer “affirmative, express consent allowing the
requested CPNI usage, disclosure, or access . . . .” Id. § 64.2003(k). However, carriers only need to obtain “opt-out
approval” to use or disclose individually identifiable CPNI to its agents and affiliates for marketing communicationsrelated service. Id. § 64.2007(b). Under “opt-out approval,” a customer is deemed to have consented if he has “failed to
object” within a specified waiting period after being provided the “appropriate notification of the carrier’s request for
consent.” Id. § 64.2003(l).
135 47 U.S.C. § 222(c); 47 C.F.R. § 64.2007. Exceptions include, among other things, using or disclosing individually
identifiable CPNI to disclose “aggregate customer information,” provide or market service offerings for services to
which the customer already subscribes, or provide “inside wiring installation, maintenance, and repair services.” 47
U.S.C. §§ 222(c)–(d); 47 C.F.R. § 64.2005.
136 47 C.F.R. § 64.2008.
137 Id. §§ 64.2009–64.2010.
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gain unauthorized access to CPNI.”138 Lastly, carriers must comply with data breach
requirements. Following a “breach”139 of customers’ CPNI, a carrier must disclose such a breach
to law enforcement authorities no later than seven days following a “reasonable determination of
the breach.”140 After it has “completed the process of notifying law enforcement,” it must notify
customers whose CPNI has been breached.141
In addition to the CPNI requirements, the Communications Act contains three other potentially
relevant data privacy and security provisions pertaining to common carriers. First, Section 222(a)
of the Act states that carriers must “protect the confidentiality of proprietary information” of
“customers.”142 Second, Section 201(b) of the Act declares unlawful “any charge, practice,
classification, and regulation” in connection with a carrier’s communication service that is
“unjust or unreasonable.”143 Lastly, Section 202(a) provides that it shall “be unlawful for any
common carrier to make any unjust or unreasonable discrimination in charges, practices,
classification, regulations, facilities, or services . . . .”144
In a 2016 rule,145 which was subsequently overturned pursuant to the Congressional Review
Act,146 the FCC attempted to rely on these three provisions to regulate a broad category of data
called “customer proprietary information” (customer PI).147 While customer PI is not defined in
the statute, the FCC’s 2016 rule defined it broadly to include CPNI, as well as other “personally
identifiable information” and the “content of communications.” The FCC reasoned that Section
222(a) imposes a general duty, independent from Section 222(c), on carriers to protect the
confidentiality of customer PI.148 It further maintained that Sections 201(b) and 202(a) provide
independent “backstop authority” to ensure that no gaps are formed in commercial data privacy
and security practices, similar to the FTC’s authority under the FTC Act.149 However, given that
Congress overturned the 2016 rule, the FCC may be prohibited under the CRA from relying on
these three provisions to regulate data privacy and security. Under the CRA, the FCC may not
reissue the rule in “substantially the same form” or issue a “new rule that is substantially the
138 Id.
139 The regulations provide that a “breach” occurs “when a person, without authorization or exceeding authorization,
has intentionally gained access to, used, or disclosed CPNI.” Id. § 64.2011(e).
140 Id. § 64.2011(b).
141 Id. § 64.2011(c). The regulations do not specify a timeline for notifying customers of a breach following the
notification of law enforcement. See id.
142 47 U.S.C. § 222(a).
143 Id. § 201(b).
144 Id. § 202(a).
145 Protecting the Privacy of Customers of Broadband and Other Telecommunications Services, 81 Fed. Reg. 87274
(Dec. 2, 2016).
146 S.J. Res. 34, 115th Cong. (2017) (enacted). Senator Jeff Flake, who introduced the joint resolution, criticized the
FCC’s rule as “restricting the free speech of its regulatory target” and creating a “dual track regulatory environment
where some consumer data is regulated one way if a company is using it under the FCC’s jurisdiction and an entirely
different way if its use falls under the FTC . . . .” 163 Cong Rec. S. 1,925 (2017). He further stated that overturning the
rules would “restor[e] a single, uniform set of privacy rules for the internet” and “send a powerful message that Federal
agencies can’t unilaterally restrict constitutional rights and expect to get away with it.” Id.
147 The FCC rule defined “customer proprietary information” to include “individually identifiable CPNI,” “personally
identifiable information,” and “content of communications.” 81 Fed. Reg. 87274, 87275.
148 Id. at 87323–87327.
149 Id. at 87328. See § Federal Trade Commission Act (FTC Act), infra, for more information on the FTC’s authority.
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same” as the overturned rule “unless the reissued or new rule is specifically authorized by a law
enacted after the date of the joint resolution disapproving the original rule.”150
The FCC is empowered to enforce civil violations of the Communications Act’s provisions,
including its common carrier provisions.151 The FCC may impose a “forfeiture penalty” against
any person who “willfully or repeatedly” violates the Act or the FCC’s implementing
regulations.152 The Communications Act further imposes criminal penalties on those who
“willfully and knowingly” violate the statute or the FCC’s implementing regulations.153 Along
with its general civil and criminal provisions, the Communications Act provides a private right of
action for those aggrieved by violations of its common carrier provisions; in such actions,
plaintiffs may seek actual damages and reasonable attorney’s fees.154
Cable Operators and Satellite Carriers
In addition to common carriers, the Communications Act imposes a number of data privacy and
security requirements on how “cable operators”155 and “satellite carriers”156 (i.e., covered entities)
150 5 U.S.C. § 801(b)(2). The CRA does not define “substantially the same.” See id. § 804. Further, the CRA may
preclude courts from determining whether a rule is “substantially the same,” as it states that “no determination, finding,
action, or omission under this chapter shall be subject to judicial review.” Id. § 805. Some courts have suggested this
provision prevents them from reviewing all actions alleging noncompliance with the CRA. See, e.g., Montanans for
Multiple Use v. Barbouletos, 568 F.3d 225, 229 (D.C. Cir. 2009) (“The [CRA] provision denies courts the power to
void rules on the basis of agency noncompliance with the Act. The language of § 805 is unequivocal and precludes
review of this claim—even assuming that the plan amendments qualify as rules subject to the Act in the first place.”);
but see Ctr. for Biological Diversity v. Zinke, 313 F. Supp. 3d 976, 991 n.89 (D. Alaska 2018) (“CBD is not seeking
review of action taken under the CRA. Instead, CBD is claiming that DOI, at the behest of Congress, acted ultra
vires in taking action beyond the authority provided by the CRA. Therefore, § 805‘s restriction on judicial review does
not apply.”). For more information on the CRA, see CRS Report R45248, The Congressional Review Act: Determining
Which “Rules” Must Be Submitted to Congress, by Valerie C. Brannon and Maeve P. Carey, and CRS Insight
IN10660, What Is the Effect of Enacting a Congressional Review Act Resolution of Disapproval?, by Maeve P. Carey.
151 47 U.S.C. §§ 151, 503(b). In recent years the FCC has brought several data privacy enforcement actions against
common carriers. For instance, in 2015, in what the FCC called its “largest data security enforcement action,” AT&T
settled allegations that it violated the Communications Act’s common carrier privacy provisions. Press Release, Fed.
Commc’ns Comm’n, AT&T to Pay $25 Million to Settle Consumer Privacy Investigation (Apr. 8, 2015),
https://docs.fcc.gov/public/attachments/DOC-332911A1.pdf. In that case, the FCC alleged that employees at AT&T
call centers in Mexico, Colombia, and the Philippines accessed customer CPNI without authorization and also
disclosed other non-CPNI sensitive customer information, such as names and full or partial Social Security numbers.
AT&T Services, Inc., 30 FCC Rcd. 2808 (Apr. 8, 2015) (order and consent decree).
152 47 U.S.C. § 503(b)(1). For common carriers, forfeiture penalties may be up to $160,000 for each violation or each
day of a continuing violation but may not exceed $1,575,000 for any “single act or failure to act.” Id. § 503(b)(2)(B);
47 C.F.R. § 1.80(b)(2).
153 Any person who “willfully and knowingly” violates the Act’s requirements may be fined up to $10,000 and
imprisoned up to one year, and anyone who “willfully and knowingly” violates any FCC “rule, regulation, restriction or
condition” made under the authority of the Act shall be fined up to $500 for “each and every day during which such
offense occurs.” 47 U.S.C. §§ 501–502.
154 Common carriers violating the Act “shall be liable to the person or persons injured thereby for the full amount of
damages,” along with reasonable attorney fees. Id. § 206.
155 “Cable operators” are defined to include anyone who uses the “cable system” to provide any video or other
programming service. Id. §§ 522(5)–(6).
156 “Satellite carriers” are defined as any “entity that uses the facilities of a satellite or satellite service . . . to establish
and operate a channel of communications for point-to-multipoint distribution of television station signals . . . .”
Id.§ 338(k)(7); 17 U.S.C. § 119(d)(6).
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treat their subscribers’157 “personally identifiable information” (PII).158 These requirements relate
to: (1) data collection and disclosure; (2) subscribers’ access to, and correction of, their data; (3)
data destruction; (4) privacy policy notification; and (5) data security.
First, covered entities must obtain the “prior written or electronic consent” of a subscriber before
collecting the subscriber’s PII or disclosing it to third parties.159 There are several exceptions to
this consent requirement. Among other things, covered entities may collect a subscriber’s PII in
order to obtain information necessary to render service to the subscriber,160 and they may disclose
a subscriber’s PII if the disclosure is necessary to “render or conduct a legitimate business
activity” related to the service they provide.161 Second, covered entities must provide subscribers,
at “reasonable times and a convenient place,” with access to all of their PII “collected and
maintained,” and they must further provide subscribers a reasonable opportunity to correct any
error in such information.162 Third, covered entities are obligated to destroy PII if it is “no longer
necessary for the purpose for which it is was collected” and there are “no pending requests or
orders for access to such information.”163 Fourth, covered entities must provide subscribers with a
privacy policy notice at the “time of entering into an agreement” for services and “at least once a
year thereafter.”164 These notices must describe, among other things: (1) the nature of the
subscriber’s PII that has been, or will be, collected, (2) the nature, frequency, and purpose of any
disclosure of such information and the types of persons to whom the disclosure is made, and
(3) the times and place at which the subscriber may have access to such information.165 Lastly, the
Communications Act imposes a general data security requirement on covered entities; they must
“take such actions as are necessary to prevent unauthorized access to [PII] by a person other than
the subscriber” or the covered entity.166
157 FCC regulations define a “subscriber” in the “context of cable of service” as “a member of the general public who
receives broadcast programming distributed by a cable television system and does not further distribute it.” 47 C.F.R.
§ 76.5(ee)(1). FCC regulations further define a “subscriber” in the “context of satellite service” as “a person who
receives a secondary transmission service from a satellite carrier and pays a fee for the service, directly or indirectly, to
the satellite carrier or to a distributor.” Id. § 76.5(ee)(2).
158 The Communications Act only defines PII as information that “does not include any record of aggregate data which
does not identify particular persons.” 47 U.S.C. §§ 338(i)(2)(A), 551(a)(2)(A). See also Klimas v. Comcast Cable
Commc’ns, Inc., 465 F.3d 271, 275 (6th Cir. 2006) (“The phrase ‘personally identifiable information’ is not defined in
the statute except in the negative. The term ‘does not include any record of aggregate data which does not identify
particular persons.’”).
159 47 U.S.C. §§ 338(i)(3)–(4), 551(b)–(c).
160 Id. §§ 338(i)(3)(B), 551(b)(2)(A). Cable operators are also allowed to collect PII without the prior written or
electronic consent in order to “detect unauthorized reception of cable communications,” and satellite carriers may
similarly collect PII in order to “detect unauthorized reception of satellite communications.” Id. §§ 338(i)(3)(B),
551(b)(2)(B).
161 Id. §§ 338(i)(4)(B), 551(c)(2)(B). Covered entities may also disclose PII without consent include situations where:
(1) the disclosure is made pursuant to a court order; (2) the disclosure (i) only consists of a subscriber’s name and
address, (ii) the covered entity has given the subscriber the “opportunity to prohibit or limit such disclosure,” and
(iii) the disclosure does not reveal the “extent of any viewing or other use by the subscriber” of the service provided or
“the nature of any transaction made by the subscriber”; or (3) the disclosure is authorized by a government entity and
the disclosure does not include records revealing the subscriber’s selection of video programming. Id. §§ 338(i)(4)(B),
553(c)(2).
162 Id. §§ 338(i)(5), 551(d).
163 Id. §§ 338(i)(6), 551(e).
164 Id. §§ 338(i)(1), 551(a)(1).
165 Id.
166 Id. §§ 338(i)(4)(A), 551(c)(1).
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The Communications Act provides a private right of action for “[a]ny person aggrieved by any
act” of a covered entity in violation of these requirements.167 In such actions, a court may award
actual damages, punitive damages, and reasonable attorneys’ fees and other litigation costs.168
Additionally, covered entities violating these provisions may be subject to FCC civil enforcement
and criminal penalties that, as previously noted, are generally applicable to violations of the
Communications Act.169
Video Privacy Protection Act
The Video Privacy Protection Act (VPPA)170 was enacted in 1988 in order to “preserve personal
privacy with respect to the rental, purchase, or delivery of video tapes or similar audio visual
materials.”171 The VPPA does not have any data security provisions requiring entities to maintain
safeguards to protect consumer information from unauthorized access. However, it does have
privacy provisions restricting when covered entities can share certain consumer information.
Specifically, the VPPA prohibits “video tape service providers”172—a term that includes both
digital video streaming services and brick-and-mortar video rental stores173—from knowingly
disclosing PII174 concerning any “consumer”175 without that consumer’s opt-in consent.176 The
VPPA provides several exceptions to this general rule. In particular, video tape service providers
may disclose PII to “any person if the disclosure is incident to the ordinary course of business.”177
Providers may also disclose PII if the disclosure solely includes a consumer’s name and address
and does not identify the “title, description, or subject matter of any video tapes or other audio
visual material,”178 and the consumer has been provided with an opportunity to opt out of such
disclosure.179 The VPPA does not empower any federal agency to enforce violations of the Act
167 Id. §§ 338(i)(7), 551(f)(1).
168 Id. §§ 338(i)(7), 551(f)(2).
169 Id. §§ 501–503.
170 Video Privacy Protection Act of 1988, Pub. L. No. 100-619, 102 Stat. 3195 (1988) (codified at 18 U.S.C. § 2710).
171 Id. (“An Act . . . to preserve personal privacy with respect to the rental, purchase, or delivery of video tapes or
similar audio visual materials.”).
172 “Videotape service provider” is defined as “any person, engaged in the business, in or affecting interstate or foreign
commerce, of rental, sale or delivery of prerecorded video cassette tapes or similar audio visual materials . . .” See 18
U.S.C. § 2710(a)(4).
173 See, e.g., In re Hulu Privacy Litigation, No. C 11-0374, 2012 WL 3282960, at *5–*6 (N.D. Cal. Aug. 10, 2012)
(holding that Hulu, a video-streaming business, is a “video tape service provider” under VPPA); Mollett v. Netflix,
Inc., No. 5:11–CV–01629, 2012 WL 3731542, at *2 (N.D. Cal., Aug. 17, 2012) (“Netflix does not challenge the
allegations that it is a ‘video tape service provider” and a ‘person providing video recording . . . rental services . . .’”).
174 “[T]he term ‘personally identifiable information’ includes information which identifies a person as having requested
or obtained specific video materials or services from a video tape service provider . . . .” 18 U.S.C. § 2710(a)(3).
175 “Consumer” is defined as “any renter, purchaser, or subscriber of goods or services from a video tape service
provider.” Id. § 2710(a)(1).
176 Id. § 2710(b). The statute specifies that the consumer must provide “informed, written consent (including through an
electronic means using the Internet)” that is “in a form distinct and separate from any form setting forth other legal or
financial obligations of the consumer” and includes an opportunity, provided in a “clear and conspicuous manner,” for
the “consumer to withdraw on a case-by-case basis or to withdraw from ongoing disclosures, at the consumer’s
election.” Id. § 2710(b)(2)(B).
177 Id. § 2710(b)(2)(E).
178 The subject matter of such materials may be disclosed, however, if the disclosure is “for the exclusive use of
marketing goods and services directly to the consumer.” Id. § 2710(b)(2)(D).
179 Id. Other exceptions include disclosures to a law enforcement agency pursuant to a warrant and disclosure pursuant
to a court order in a civil proceeding. Id. §§ 2710(b)(2)(C), (F).
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and there are no criminal penalties for violations, but it does provide for a private right of action
for persons aggrieved by the Act.180 In such actions, courts may award actual damages, punitive
damages, preliminary and equitable relief, and reasonable attorneys’ fees and other litigation
costs.181
Family Educational Rights and Privacy Act (FERPA)
The Family Educational Rights and Privacy Act of 1974 (FERPA)182 creates privacy protections
for student education records. “Education records” are defined broadly to generally include any
“materials which contain information directly related to a student” and are “maintained by an
educational agency or institution.”183 FERPA defines an “educational agency or institution” to
include “any public or private agency or institution which is the recipient of funds under any
applicable program.”184 FERPA generally requires that any “educational agency or institution”
(i.e., covered entities) give parents or, depending on their age, the student185 (1) control over the
disclosure of the student’s educational records, (2) an opportunity to review those records, and (3)
an opportunity to challenge them as inaccurate.
First, with respect to disclosure, covered entities must not have a “policy or practice” of
permitting the release of education records or “personally identifiable information contained
therein” without the consent of the parent or the adult student.186 This consent requirement is
subject to certain exceptions. Among other things, covered entities may disclose educational
records to (1) certain “authorized representatives,”187 (2) school officials with a “legitimate
educational interest,”188 or (3) “organizations conducting studies” for covered entities “for the
purpose of developing, validating, or administering predictive tests, administering student aid
programs, and improving instructions.”189 Covered entities may also disclose the information
180
Id. § 2710(c)(1).
181 Id. § 2710(c)(2).
182 Pub. L. No. 93-380, § 513, 88 Stat. 484, 571–74 (1974) (codified at 20 U.S.C. § 1232g).
183 Id. § 1232g(a)(4)(A). However, FERPA excludes certain things from the “education records” definition,
specifically: (1) records made by “instructional, supervisory, and administrative personnel” that are kept “in the sole
possession of the maker thereof and which are not accessible or revealed to any other person except a substitute”; (2)
“records maintained by a law enforcement unit of the educational agency or institution that were created by that law
enforcement unit for the purpose of law enforcement”; and (3) records made or maintained by a “physician,
psychiatrist, psychologist or other recognized professional or paraprofessional” on a student who is “eighteen years of
age or older, or is attending an institution of postsecondary education,” that are only used “in connection with the
provision of treatment” and are “not available to anyone other than the person providing such treatment,” except for a
“physician or other appropriate professional of the student’s choice.” Id. § 1232g(a)(4)(B).
184 Id. § 1232g(a)(3).
185 FERPA rights transfer from the parent to the student once the student turns 18 years old or attends a postsecondary
institution. Id. § 1232g(d).
186 Id. § 1232g(b).
187 Specifically, this exemption applies to “authorized representatives” of “the Comptroller General of the United
States,” “the Secretary [of Education],” “State educational authorities,” or “authorized representatives of the Attorney
General for law enforcement purposes.” Id. § 1232g(b)(C). Department of Education regulations further define the term
“authorized representative” as meaning “any entity or individual designated by a State or local educational authority or
an agency headed by [the Comptroller General, Attorney General, or the Secretary of Education] to conduct—with
respect to Federal- or State-supported education programs—any audit or evaluation, or any compliance or enforcement
activity in connection with Federal legal requirements that relate to these programs.” 34 C.F.R. § 99.3(b).
188 20 U.S.C. § 1232g(b)(1)(A).
189 Id. § 1232g(b)(1)(F). These studies must be conducted in “such a manner as will not permit the personal
identification of students and their parents by persons other than representatives of such organizations,” and the
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without consent if it constitutes “directory information”190 and the entity has given notice and a
“reasonable period of time” to opt out of the disclosure.191 Second, in addition to the disclosure
obligations, covered entities must not have a “policy of denying” or “effectively prevent[ing]”
parents or an adult student from inspecting and reviewing the underlying educational records.192
Covered entities must further “establish appropriate procedures” to grant parents’ review requests
“within a reasonable period of time, but in no case more than forty-five days after the request has
been made.”193 Lastly, covered entities must provide an “opportunity for a hearing” to challenge
the contents of the student’s education records as “inaccurate, misleading, or otherwise in
violation of the privacy rights of students.”194 Covered entities must further “provide an
opportunity for the correction or deletion of any such inaccurate, misleading or otherwise
inappropriate data contained therein and to insert into such records a written explanation of the
parents respecting the content of such records.”195
Parents or adult students who believe that their rights under FERPA have been violated may file a
complaint with the Department of Education.196 FERPA authorizes the Secretary of Education to
“take appropriate actions,” which may include withholding federal education funds, issuing a
“cease and desist order,” or terminating eligibility to receive any federal education funding.197
FERPA does not, however, contain any criminal provisions or a private right of action.198
Federal Securities Laws
While federal securities statutes and regulations do not explicitly address data protection, two
requirements under these laws have implications for how companies prevent and respond to data
breaches.
First, federal securities laws may require companies to adopt controls designed to protect against
data breaches. Under Section 13(b)(2)(B) of the Securities and Exchange Act of 1934 (Exchange
information must be “destroyed when no longer needed for the purpose which it is conducted.” Id. Other exceptions to
the consent requirement include the disclosure of educational records: (1) to “officials of other schools or school
systems in which the student seeks or intends to enroll, upon condition that the student’s parents be notified of the
transfer, receive a copy of the record if desired, and have an opportunity for a hearing to challenge the content of the
record”; (2) “in connection with a student’s application for, or receipt of, financial aid”; (3) to “appropriate persons”
necessary to “protect the health or safety of the student or other person” in connection with an “emergency”; (4) to
“accrediting organizations in order to carry out their accrediting functions”; (5) to parents of a student who is a
“dependent” as defined in the Internal Revenue Code; or (6) to comply with a subpoena. Id. § 1232g(b).
190 FERPA defines “directory information” as “the student’s name, address, telephone listing, date and place of birth,
major field of study, participation in officially recognized activities and sports, weight and height of members of
athletic teams, dates of attendance, degrees and awards received, and the most previous educational agency or
institution attended by the student.” Id. § 1232g(5)(A).
191 Id. § 1232g(a)(5)(B).
192 Id. § 1232g(a)(1)(A).
193 Id. § 1232g(a)(1)(A).
194 Id. § 1232g(a)(2).
195 Id.
196 34 C.F.R. § 99.63.
197 20 U.S.C. § 1232g(f); 34 C.F.R. § 99.67.
198 See Gonzaga University v. Doe, 536 U.S. 273, 290 (2002) (“FERPA’s nondisclosure provisions contain no rightscreating language, they have an aggregate, not individual, focus, and they serve primarily to direct the Secretary of
Education’s distribution of public funds to educational institutions.”).
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Act),199 public companies and certain other companies200 are required to “devise and maintain a
system of internal accounting controls sufficient to provide reasonable assurances” that
“transactions are executed in accordance with management’s general or specific authorization,”
and that “access to assets is permitted only in accordance with management’s general or specific
authorization.”201 In a recent report, the Securities and Exchange Commission (SEC) suggested
that, in order to comply with this requirement, companies should consider “cyber-related threats”
when formulating accounting controls.202 The report discussed the SEC’s investigation of
companies that wrongly transferred millions of dollars in response to fraudulent emails, generally
noting that “companies should pay particular attention to the obligations imposed by Section
13(b)(2)(B)” in light of the “risks associated with today’s ever expanding digital
interconnectedness.”203
Second, federal securities laws may require companies to discuss data breaches when making
required disclosures under securities laws. The Exchange Act, Securities Act of 1933 (Securities
Act),204 and their implementing regulations205 require certain companies to file a number of
disclosures with the SEC. Specifically, the Securities Act requires companies issuing securities in
a public offering to file detailed statements registering the offering (registration statements),206
and the Exchange Act requires public companies to file periodic reports on an annual, quarterly,
and ongoing basis.207 These filings must contain certain categories of information, such as a
description of the most significant factors that make investing in the company speculative or risky
(known as “risk factors”)208 and a description of any “events, trends, or uncertainties that are
reasonably likely to have a material effect on its results of operations, liquidity, or financial
condition . . . .”209 Further, when making these filings, or any other statements in connection with
the purchase or sale of a security, companies are required to include any “material”210 information
necessary to make the statements made therein “not misleading.”211 In interpretive guidance
199
15 U.S.C. §§ 78a–78qq.
200 Companies are subject to these obligations if they have a class of securities registered with the Securities and
Exchange Commission (SEC) under Section 12 of the Exchange Act or if they must file reports with the SEC under
Section 15(d) of the Exchange Act. Id. § 78m(b)(2). Such companies include all companies with securities traded on a
national securities exchange, such as the New York Stock Exchange or the Nasdaq Stock Market. Id. § 78l.
201 Id. §§ 78m(b)(2)(B)(i), (iii).
202 SEC. EXCHANGE COMM’N, SEC RELEASE NO. 34-84429, REPORT OF INVESTIGATION PURSUANT TO 21(A) OF THE
SECURITIES AND EXCHANGE ACT OF 1934 REGARDING CERTAIN CYBER-RELATED FRAUDS PERPETRATED AGAINST PUBLIC
COMPANIES AND RELATED INTERNAL ACCOUNTING CONTROLS REQUIREMENTS (Oct. 16, 2018), https://www.sec.gov/
litigation/investreport/34-84429.pdf.
203 Id. at 5.
204 15 U.S.C. §§ 77a–77aa.
205 17 C.F.R. Pts. 200–301.
206 15 U.S.C. §§ 77f–77g.
207 Id. § 78m; 17 C.F.R. §§ 240.13a-1, 240.13a-11, 240.13a-13.
208 17 C.F.R. § 229.503(c).
209 Commission Statement on Guidance on Public Company Cybersecurity Disclosures, 83 Fed Reg. 8166, 8170 (Feb.
26, 2018).
210 The Supreme Court has explained that for an omitted fact to be “material” there “must be a substantial likelihood
that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly
altered the ‘total mix’ of information made available.” Basic Inc. v. Levinson, 485 U.S. 224, 231–232 (1988) (quoting
TSC Industries v. Northway, Inc., 426 U.S. 438, 449 (1976)).
211 15 U.S.C. § 77k (imposing liability where “any part of the registration statement . . . contained an untrue statement
of material fact or omitted to state a material fact required to be stated therein or necessary to make the statements
therein not misleading . . . “); id. § 77l (imposing liability on “[a]ny person who . . . offers or sells a security . . . by
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issued in February 2018, the SEC indicated that, pursuant to these obligations, companies may be
required to disclose in their filings cyber incidents such as data breaches.212
The SEC can enforce violations of the Securities Act and the Exchange Act, including the
accounting controls requirement and the disclosure requirements, through civil actions filed in
court213 or administrative “cease and desist” proceedings.214 The SEC may seek civil penalties,
disgorgement, and injunctive relief (in civil actions) or a cease and desist order (in administrative
proceedings).215 Furthermore, under both the Exchange Act and the Securities Act, individuals
aggrieved by a company’s misrepresentation or omission of a material fact in connection with the
purchase or sale of a security may sue the company for actual damages incurred by the
individual.216 There is not, however, a private right of action for violations of the Exchange Act’s
accounting controls requirement.217 Lastly, in addition to civil enforcement, both the Securities
Act and the Exchange Act impose criminal liability; any person who “willfully” violates the acts
or their implementing regulations may be subject to fines and imprisonment. 218
means of a prospectus or oral communication, which includes an untrue statement of material fact or omits to state a
material fact necessary in order to make the statements, in light of the circumstances under which they were made, not
misleading . . .”); id. § 78j (“It shall be unlawful for any person . . . [t]o use or employ, in connection with the purchase
or sale of any security registered on a national securities exchange or any security not so registered . . . any
manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may
prescribe . . . .”); 17 C.F.R. § 240.10b-5 (“It shall be unlawful for any person . . . to make any untrue statement of a
material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading . . . .”).
212 83 Fed Reg. 8166. The SEC guidance does not provide a bright-line approach defining when companies must report
cyber incidents. Rather, it generally directs companies to consider whether they are required to discuss such incidents
as part of the required categories of disclosure, such as the risk factors or the description of events impacting the
company’s operations. Id. at 8169–8171. It further directs companies to consider whether cyber incidents are “material”
and whether disclosure is required to make the filings “not misleading.” Id. at 8168–8169. When evaluating materiality,
the guidance explains that relevant factors include the nature of the compromised information, potential magnitude of
the breach, and range of harm caused by the breach. Id. at 8169.
213 15 U.S.C. §§ 77t(d), 78u(d).
214 Id. §§ 77h-1, 78u-3.
215 Id. §§ 77h-1, 77t, 78u, 78u-2, 78u-3.
216 Id. § 77l (providing a private right of action to investors who purchased a security from someone who offered or
sold a security by means of a prospectus or oral communication containing an untrue statement of a material fact or
omission of a material fact); Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S. 258, 267 (2014) (“Although section
10(b) does not create an express private cause of action, we have long recognized an implied private cause of action to
enforce the provision and its implementing regulation.”); Pelletier v. Stuart-James Co., Inc., 863 F.2d 1550, 1557 (11th
Cir. 1989) (“In securities fraud cases, therefore, damages are determined in accordance with the extent to which a
plaintiff is actually damaged as a result of the defendant’s fraudulent conduct.”).
217 See, e.g., In re Remec Inc. Sec. Litig., 388 F. Supp. 2d. 1170, 1177 (S.D. Cal. 2005) (“The parties recognize that
there is no private right of action under § 78m(b)(2) . . . .”); Eisenberger v. Spectex Indus., Inc., 644 F. Supp. 48, 51
(E.D.N.Y. 1986) (“The court holds that no private cause of action exists under section 78m(b)(2).”); Lewis v. Sporck,
612 F. Supp. 1316, 1333 (N.D. Cal. 1985) (“I conclude that Section 13(b)(2) was not enacted to provide private
litigants another cause of action . . . .”).
218 15 U.S.C. §§ 77x, 78ff(a).
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Children’s Online Privacy Protection Act (COPPA)
The Children’s Online Privacy Protection Act (COPPA)219 and the FTC’s implementing
regulations220 regulate the online collection and use of children’s information.221 Specifically,
COPPA’s requirements apply to: (1) any “operator”222 of a website or online service that is
“directed to children,” or (2) any operator that has any “actual knowledge that it is collecting
personal information from a child” (i.e., covered operators).223 Covered operators must comply
with various requirements regarding data collection and use, privacy policy notifications, and data
security.
First, COPPA and the FTC’s implementing regulations prohibit covered operators from collecting
or using “personal information”224 from children under the age of thirteen without first obtaining
parental consent.225 Such consent must be “verifiable” and must occur before the information is
collected.226 Second, covered operators must provide parents with direct notice of their privacy
policies, describing their data collection and sharing policies.227 Covered operators must further
post a “prominent and clearly labeled link” to an online notice of its privacy policies at the home
page of its website and at each area of the website in which it collects personal information from
children.228 Lastly, covered operators that have collected information from children must establish
and maintain “reasonable procedures” to protect the “confidentiality, security, and integrity” of
the information, including ensuring that the information is provided only to third parties that will
similarly protect the information.229 They must also comply with certain data retention and
deletion requirements.230 Under COPPA’s safe harbor provisions, covered operators will be
219 Id. §§ 6501–6506.
220 16 C.F.R. pt. 312.
221 Id. §§ 6501–6506.
222 “Operator” is defined as “any person who operates a Web site located on the Internet or an online service and who
collects or maintains personal information from or about the users of or visitors to such Web site or online service, or
on whose behalf such information is collected or maintained, or offers products or services for sale through that Web
site or online service,” but does not include any “nonprofit entity that would otherwise be exempt from coverage under
Section 5 of the Federal Trade Commission Act.” 16 C.F.R. § 312.2.
223 15 U.S.C. § 6502; 16 C.F.R. § 312.3.
224 “Personal information” is defined as “individually identifiable information about an individual collected online,
including—(A) a first and last name; (B) a home or other physical address including street name and name of a city or
town; (C) an e-mail address; (D) a telephone number; (E) a Social Security number; (F) any other identifier that the
Commission determines permits the physical or online contacting of a specific individual; or (G) information
concerning the child or parents of that child that the website collects online from the child and combines with an
identifier described in this paragraph.” 15 U.S.C. § 6501(8). FTC regulations further define “personal information” as
including (1) a “persistent identifier that can be used to recognize a user over time and across different Web sites or
online services,” such as “a customer number held in a cookie, an Internet Protocol (IP) address, a processor or device
serial number, or unique device identifier”; (2) a “photograph, video, or audio file where such file contains a child’s
image or voice”; or (3) “[g]eolocation information sufficient to identify street name and name of a city or town.” 16
C.F.R. § 312.2.
225 15 U.S.C. §§ 6502(a)–(b).
226 Id. § 6502(b)(1)(A)(ii); 16 C.F.R. § 312.5(a)(1). See also United States v. UMG, No. cv-04-1050 (C.D. Cal. 2004)
(settlement decree), https://www.ftc.gov/sites/default/files/documents/cases/2004/02/040217cagumgrecordings.pdf
(settling charges that website operator violated COPPA by notifying parents after it collected the children’s
information).
227 15 U.S.C. § 6502(b)(1)(A)(i); 16 C.F.R. §§ 312.4(a), (c).
228 16 C.F.R § 312.4(d).
229 Id. § 312.8.
230 Operators may only retain children’s personal information for “as long as is reasonably necessary to fulfill the
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deemed to have satisfied these requirements if they follow self-regulatory guidelines the FTC has
approved.231
COPPA provides that violations of the FTC’s implementing regulations will be treated as “a
violation of a rule defining an unfair or deceptive act or practice” under the FTC Act.232 Under the
FTC Act, as discussed in more detail below, the FTC has authority to enforce violations of such
rules by seeking penalties or equitable relief.233 COPPA also authorizes state attorneys general to
enforce violations affecting residents of their states.234 COPPA does not contain any criminal
penalties235 or any provision expressly providing a private right of action.236
Electronic Communications Privacy Act (ECPA)
The Electronic Communications Privacy Act (ECPA) was enacted in 1986,237 and is composed of
three acts: the Wiretap Act,238 the Stored Communications Act (SCA),239 and the Pen Register
Act.240 Much of ECPA is directed at law enforcement, providing “Fourth Amendment like privacy
protections” to electronic communications.241 However, ECPA’s three acts also contain privacy
obligations relevant to non-governmental actors. ECPA is perhaps the most comprehensive
federal law on electronic privacy, as it is not sector-specific, and many of its provisions apply to a
wide range of private and public actors. Nevertheless, its impact on online privacy practices has
been limited. As some commentators have observed, ECPA “was designed to regulate
wiretapping and electronic snooping rather than commercial data gathering,” and litigants
attempting to apply ECPA to online data collection have generally been unsuccessful.242
purpose for which the information was collected” and must “delete such information using reasonable measures to
protect against unauthorized access to, or use of, the information in connection with its deletion.” Id. § 312.10.
231 15 U.S.C. § 6503; 16 C.F.R. § 312.11.
232 15 U.S.C. § 6502(c).
233 Id. § 45(m)(1)(A). For further discussion of the FTC’s enforcement authority under the FTC Act, see § Federal
Trade Commission Act (FTC Act), infra.
234 Id. § 6504.
235 See, e.g., John Soma, J. Zachary Courson, & John Cadkin, Corporate Privacy Trend: The “Value” of Personally
Identifiable Information (“PII”) Equals the “Value” of Financial Assets, 15 RICH. J. L. & TECH. 11, 30 (2009)
(“COPPA does not carry criminal penalties”).
236 Moreover, no court appears to have considered whether an implied right of action can be read into COPPA.
However, the Supreme Court has explained that Congress must create private rights of action in “clear and
unambiguous terms,” Gonzaga University v. Doe, 536 U.S. 273, 290 (2002) (“In sum, if Congress wishes to create new
rights enforceable under § 1983, it must do so in clear and unambiguous terms—no less and no more than what is
required for Congress to create new rights enforceable under an implied private right of action.”), suggesting that
Congress did not create a private cause of action under COPPA. See Dorothy Hertzel, Don’t Talk to Strangers: an
Analysis of Government and Industry Efforts to Protect a Child’s Privacy Online, 52 FED. COMM. L. J. 429, 439 (2000)
(“The COPPA does not provide parents or children with a private right of action . . .”).
237 Electronic Communications Privacy Act of 1986, Pub. L. No. 99-508, 100 Stat. 1848 (1986) (codified at 18 U.S.C.
§§ 2510–3127).
238 18 U.S.C. §§ 2510–2523.
239 Id. §§ 2701–2713.
240 Id. §§ 3121–3127.
241 Kerr, supra note 62, at 1212 (“[T]he [SCA] creates a set of Fourth Amendment-like privacy protections by statute,
regulating the relationship between government investigators and service providers in possession of users’ private
information.”); see also Suzlon Energy Ltd. v. Microsoft Corp., 671 F.3d 726, 730 (9th Cir. 2011) (noting that “ECPA
was intended to shore up Fourth Amendment rights”).
242 Solove & Hartzog, supra note 60, at 592 (“An attempt was made early on to apply existing statutory law to online
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The Wiretap Act applies to the interception of a communication in transit. A person violates the
Act if, among other acts,243 he “intentionally intercepts . . . any wire, oral, or electronic
communication.”244 The Wiretap Act defines an “electronic communication” broadly, and courts
have held that the term includes information conveyed over the internet.245 Several thresholds
must be met for an act to qualify as an unlawful “interception.” Of particular relevance are three
threshold issues.246 First, the communication must be acquired contemporaneously with the
transmission of the communication.247 Consequently, there is no “interception” where the
communication in question is in storage.248 Furthermore, the acquired information must relate to
the “contents” of the communication, defined as information concerning the “substance, purport,
or meaning of that communication.”249 As a result, while the Act applies to information like the
header or body of an email,250 the Act does not apply to non-substantive information
automatically generated about the characteristics of the communication, such as IP addresses.251
data gathering practices. . . . ECPA was indeed a poor fit, as it was designed to regulate wiretapping and electronic
snooping rather than commercial data gathering. . . . These rare attempts to apply existing law nearly all failed . . . .”).
243 The Wiretap Act also prohibits: (1) any person from intentionally disclosing or using of the contents of a
communication obtained through an unlawful interception; (2) any person from disclosing information obtained
through a lawful interception in connection with a criminal investigation, where the disclosure is made with the intent
to “improperly obstruct, impede, or interfere with a duly authorized criminal investigation”; and (3) electronic service
providers from “intentionally divulging the contents of any communication” in transmission to anyone other than the
sender or intended recipient. 18 U.S.C. §§ 2511(1)(c)–(e), (3)(a).
244 Id. § 2511(1)(a).
245 The Wiretap Act defines an “electronic communication” as “any transfer of signs, signals, writing, images, sounds,
data, or intelligence of any nature transmitted in whole or in part by a wire, radio, electromagnetic photo electronic or
photooptical system that affects interstate or foreign commerce . . .” Id. § 2510(12). Courts have held that this
definition encompasses information transmitted via the internet, such as emails or computer viruses. See, e.g., United
States v. Steiger, 318 F.3d 1039, 1049 (11th Cir. 2003) (“Here, the source penetrated Steiger’s computer by using a
‘Trojan Horse’ virus that enabled him to discover and download files stored on Steiger’s hard drive. That information
was transferred from Steiger’s computer to the source over one of the specified media and thus falls within the Wiretap
Act’s definition of ‘electronic communications.’”); United States v. Councilman, 418 F.3d 67, 84 (1st Cir. 2005) (“The
simplest reading of the statute is that the e-mail messages were ‘electronic communications’ under the statute at the
point where they were intercepted.”).
246 There are a number of other exceptions to the Wiretap Act not discussed here. For instance, the Act allows law
enforcement to intercept communications pursuant to a court order. 18 U.S.C. §§ 2516–2518.
247 See, e.g., Luis v. Zang, 833 F.3d 619, 629 (6th Cir. 2016) (“We therefore hold that, in order for an ‘intercept’ to
occur for purposes of the Wiretap Act, the electronic communication at issue must be acquired contemporaneously with
the transmission of that communication.”).
248 Communications in storage are generally covered by the SCA, rather than the Wiretap Act. Konop v. Hawaiian
Airlines, Inc., 302 F.3d 868, 878–879 (9th Cir. 2002) (“We therefore hold that for a website such as Konop’s to be
‘intercepted’ in violation of the Wiretap Act, it must be acquired during transmission, not while it is in electronic
storage. . . . [This conclusion] is consistent with the structure of ECPA, which created the SCA for the express purpose
of addressing ‘access to stored . . . electronic communications and transactional records.’”) (emphasis in original).
249 18 U.S.C. §§ 2510(4), (8).
250 Optiver Australia Pty. Ltd. & Anor. v. Tibra Trading Pty. Ltd. & Ors., No. C12-80242 EJD (PSG), 2013 WL
256771, *2 (N.D. Cal. 2013) (“The subject lines of emails and other electronic communications serve to convey a
substantive message about the body of the email. In the sense that they communicate information concerning the
‘substance, purport, or meaning’ of the topic of the email, subject lines are no different from the body of the email.”).
251 See, e.g., In re Zynga Privacy Litig., 750 F.3d 1098, 1106 (9th Cir. 2014) (“[W]e hold that under ECPA, the term
‘contents’ refers to the intended message conveyed by the communication, and does not include record information
regarding the characteristics of the message that is generated in the course of the communication.”). Courts have noted
that IP address information, identifying the server or device with which an internet user communicated, does not reveal
“contents” of a communication. See, e.g., United States v. Ulbricht, 858 F.3d 71, 97 (2nd Cir. 2017) (“We therefore
join the other circuits that have considered this narrow question and hold that collecting IP address information devoid
of content is ‘constitutionally indistinguishable from the use of a pen register.’”). However, uniform resource locators
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Third, individuals do not violate the Wiretap Act if they are a “party to the communication” or
received “prior consent” from one of the parties to the communication.252 The party-to-thecommunication and consent exceptions have been subject to significant litigation; in particular,
courts have often relied on the exceptions to dismiss suits alleging Wiretap Act violations due to
online tracking, holding that websites or third-party advertisers who tracked users’ online activity
were either parties to the communication or received consent from a party to the
communication.253
The SCA prohibits the improper access or disclosure of certain electronic communications in
storage. With respect to improper access, a person violates the SCA if he obtains an “electronic
communication”254 in “electronic storage”255 from “a facility through which an electronic
communication service is provided” by either: (1) “intentionally access[ing] [the facility] without
authorization” or (2) “intentionally exceed[ing] an authorization.”256 Although the statute does not
define the term “facility,” most courts have held that the term is limited to a location where
network service providers store communications.257 However, courts have differed over whether a
personal computer is a “facility.” Most courts have excluded personal computers from the reach
of the SCA,258 but some have disagreed.259
(URLs), which reveal more information than IP addresses, may, in some cases, reveal “contents” of a communication
and be excluded from the reach of the Pen Register Act. See, e.g., United States v. Forrester, 512 F.3d 500, 510 n. 6
(9th Cir. 2008) (“A URL, unlike an IP address, identifies the particular document within a website that a person views
and thus reveals much more information about the person’s Internet activity.”). For instance, if a URL contains a search
term entered by the user, then it may reveal “content.” See, e.g., In re Application of U.S. for an Order Authorizing use
of A Pen Register and Trap, 396 F. Supp. 2d 45, 49 (D. Mass. 2005).
252 18 U.S.C. § 2511(2)(d).
253 In re DoubleClick Inc. Privacy Litigation, 154 F. Supp. 2d 497, 514 (S.D.N.Y. 2001) (holding that third-party
advertising company’s placement of cookies on users’ computers that track their activities on affiliated websites did not
violate the Wiretap Act because the affiliated sites were “parties to the communication” and had consented to the
interception); In re Google Inc. Cookie Placement Consumer Privacy Litigation, 806 F. 3d 125, 139–142 (3d Cir. 2015)
(holding that third-party advertising companies were parties to the communications because the users’ servers sent a
request to their servers asking them to populate the websites with ads, and in response to these requests the advertising
companies either placed a cookie on the users’ browsers or collected information from an existing cookie). But see In
re Pharmatrak, Inc., 329 F.3d 9 (1st Cir. 2003) (reversing district court’s dismissal of plaintiffs’ Wiretap Act claim and
holding that defendants’ actions constituted an “interception” and defendants did not have “consent”).
254 For the Wiretap Act’s definition of “electronic communication,” see supra note 245. This definition also applies to
the SCA. 18 U.S.C. § 2711(1) (“the terms defined in section 2510 of this title have, respectively, the definitions given
such terms in that section”).
255 “Electronic storage” means: “(A) any temporary, intermediate storage of a wire or electronic communication
incidental to the electronic transmission thereof; and (B) any storage of such communication by an electronic
communication service for purposes of backup protection of such communication.” Id. § 2510(17).
256 Id. § 2701(a).
257 See, e.g., Google, 806 F. 3d at 147 (“‘[F]acility’ is a term of art denoting where network service providers store
private communications.”).
258 See, e.g., Morgan v. Preston, No. 13–cv–0403, 2013 WL 5963563, at *5 (M.D. Tenn. Nov. 7, 2013) (“[T]he
overwhelming body of law” supports the conclusion that “an individual’s personal computer is not a ‘facility through
which an electronic communication service is provided.’”).
259 See, e.g., Chance v. Ave. A, Inc., 165 F. Supp. 2d 1153, 1161 (W.D. Wash. 2001) (“Viewing this factual dispute in
the light most favorable to the nonmovant, as is required on summary judgment, it is possible to conclude that modern
computers, which serve as a conduit for the web server’s communication to Avenue A, are facilities covered under the
Act.”).
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With respect to improper disclosure, the SCA generally prohibits260 entities providing “electronic
communication services”261 or “remote computing services”262 from knowingly divulging the
contents of a communication while holding the communication in electronic storage.263 Similar to
the Wiretap Act, the SCA’s access and disclosure prohibitions are subject to certain exceptions. In
particular, individuals do not violate the SCA if they are the sender or intended recipient of the
communication or when a party to the communication consents to the access or disclosure.264 As
with the Wiretap Act, courts have relied on these two exceptions to dismiss suits under the SCA
related to online tracking.265
The Pen Register Act prohibits the installation of a “pen register” or “trap and trace device”
without a court order.266 A pen register is a “device or process” that “records or decodes” outgoing
“dialing, routing, addressing, or signaling information,” and a trap and trace device is a “device or
process” that “captures the incoming . . . dialing, routing, addressing, and signaling
information.”267 In contrast to the Wiretap Act, the Pen Register Act applies to the capture of noncontent information, as the definitions of pen registers and trap and trace devices both exclude
any device or process that captures the “contents of any communication.”268 Furthermore, the Pen
Register Act prohibits only the use of a pen register or trap and trace device and does not
separately prohibit the disclosure of non-content information obtained through such use.269 The
statute does, however, have several exceptions similar to those contained in the Wiretap Act and
SCA. Among other things, providers of an electronic or wire communication service will not
violate the Act when they use a pen register or trap and trace device in order to “protect their
rights or property” or “where the consent of the user of that service has been obtained.”270
The Wiretap Act and the SCA both provide for private rights of action. Persons aggrieved by
violations of either act may bring a civil action for damages, equitable relief, and reasonable
attorney’s fees.271 For actions under the Wiretap Act, damages are the greater of: (1) actual
damages suffered by the plaintiff, or (2) “statutory damages of whichever is the greater of $100 a
260 This disclosure prohibition applies to remote computing service providers only when they maintain the
communication: (A) on behalf of “a subscriber or customer of such service”; and (B) “solely for the purpose of
providing storage or computer processing services to such subscriber or customer, if the provider is not authorized to
access the contents of any such communications for purposes of providing any services other than storage or computer
processing.” 18 U.S.C. § 2702(a)(2).
261 The SCA incorporates the Wiretap Act’s definition of an “electronic communication service.” Id. § 2711(1) (“[T]he
terms defined in section 2510 of this title have, respectively, the definitions given such terms in that section.”). Under
the Wiretap Act’s definition, an “electronic communication service” is “any service which provides to users thereof the
ability to send or receive wire or electronic communications.” Id. § 2510(15).
262 “Remote computing service” means the “provision to the public of computer storage or processing services by
means of an electronic communications system.” Id. § 2711(2).
263 Id. § 2702(a).
264 Id. §§ 2701(c), 2702(b). There are a number of other exceptions to the SCA. For instance, service providers may
disclose the contents of a communication when the disclosure is “necessarily incident” to the “rendition of the service”
or the “protection of [the provider’s] rights or property” of the provider. Id. at § 2702(b).
265 See, e.g., DoubleClick, 154 F. Supp. 2d at 507–511 (holding that, under the SCA, website was a party to the
communications and consented to a third-party advertiser’s access to the communications.).
266 18 U.S.C. § 3121(a).
267 Id. §§ 3127(3)–(4).
268 Id.
269 Id. § 3121.
270 Id. § 3121(b).
271 Id. §§ 2520(a)–(b), 2707(a)–(b).
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day for each day of violation or $10,000.”272 For actions under the SCA, damages are “the sum of
the actual damages suffered by the plaintiff and the profits made by the violator,” provided that all
successful plaintiffs are entitled to receive at least $1,000.273 Violations of the Wiretap Act and
SCA are also subject to criminal prosecution and can result in fines and imprisonment.274 In
contrast, the Pen Register Act does not provide for a private right of action, but knowing
violations can result in criminal fines and imprisonment.275
Computer Fraud and Abuse Act (CFAA)
The Computer Fraud and Abuse Act (CFAA)276 was originally intended as a computer hacking
statute and is centrally concerned with prohibiting unauthorized intrusions into computers, rather
than addressing other data protection issues such as the collection or use of data.277 Specifically,
the CFAA imposes liability when a person “intentionally accesses a computer without
authorization or exceeds authorized access, and thereby obtains . . . information from any
protected computer.”278 A “protected computer” is broadly defined as any computer used in or
affecting interstate commerce or communications, functionally allowing the statute to apply to
any computer that is connected to the internet.279
Violations of the CFAA are subject to criminal prosecution and can result in fines and
imprisonment.280 The CFAA also allows for a private right of action, allowing aggrieved
individuals to seek actual damages and equitable relief, such as an injunction against the
defendant. 281 As with ECPA, internet users have attempted to use this private right of action to
sue companies tracking their online activity, arguing that companies’ use of tracking devices
constitutes an unauthorized access of their computers.282 In this vein, CFAA is theoretically a
more generous statute than ECPA for such claims because it requires authorization from the
owner of the computer (i.e., the user), rather than allowing any party to a communication (i.e.,
either the user or the website visited by the user) to give consent to the access.283 In practice,
272 Id. § 2520(c)(2).
273 18 U.S.C. § 2707(c). Courts may also assess punitive damages where the SCA violation is willful or intentional. Id.
274 Id. §§ 2511(4), 2701(b).
275 Id. § 3121(d).
276 Id. § 1030.
277 See, e.g., LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1130 (9th Cir. 2009) (“The [CFAA] was originally
designed to target hackers who accessed computers to steal information or to disrupt or destroy computer functionality,
as well as criminals who possessed the capacity to access and control high technology processes vital to our everyday
lives.”) (internal quotations omitted).
278 Id. § 1030(a)(2)(c).
279 Id. § 1030(e)(2).
280 Id. § 1030(c).
281 Id. § 1030(g) (“Any person who suffers damage or loss by reason of a violation of this section may maintain a civil
action against the violator to obtain compensatory damages and injunctive relief or other equitable relief.”).
282 See, e.g., Complaint at ¶¶ 92–96, In re DoubleClick Inc. Privacy Litigation, 154 F. Supp. 2d 497 (S.D.N.Y. 2001)
No. 00-Civ-0641 (BRB), 2000 WL 34326002 (alleging that third-party advertiser, which placed cookies on users’
computers that tracked their activities on affiliated websites, violated CFAA because plaintiffs’ computers are
“protected computers” and the third-party advertiser intentionally accessed them “without authorization or by
exceeding authorized access and thereby obtained information from such protected computers”).
283 See, e.g., Craiglist Inc. v. 3Taps Inc., 964 F.Supp. 2d 1178, 1183 (N.D. Cal. 2013) (“[T]he Ninth Circuit’s
interpretation of the CFAA’s phrase ‘without authorization’ confirms that computer owners have the power to revoke
the authorizations they grant.”); Sargeant v. Maroil Trading Inc., No. 17-81070, 2018 WL 3031841, *6 (S.D. Fla. 2018)
(“[U]nder the CFAA, the person who can ‘authorize’ access to the protected computer is the person who retains
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however, such claims have typically been dismissed due to plaintiffs’ failure to meet CFAA’s
damages threshold.284 Specifically, as a threshold to bring a private right of action, a plaintiff must
show damages in excess of $5,000 or another specific type of damages such as physical injury or
impairment to medical care.285
Federal Trade Commission Act (FTC Act)
The FTC Act has emerged as a critical law relevant to data privacy and security. As some
commentators have noted, the FTC has used its authority under the Act to become the “go-to
agency for privacy,” effectively filling in gaps left by the aforementioned federal statutes.286
While the FTC Act was originally enacted in 1914 to strengthen competition law, the 1938
Wheeler-Lea amendment revised Section 5 of the Act to prohibit a broad range of unscrupulous
or misleading practices harmful to consumers.287 The Act gives the FTC jurisdiction over most
individuals and entities, although there are several exemptions.288 For instance, the FTC Act
exempts common carriers,289 nonprofits,290 and financial institutions such as banks, savings and
loan institutions, and federal credit unions.291
The key provision of the FTC Act, Section 5, declares unlawful “unfair or deceptive acts or
practices” (UDAP) “in or affecting commerce.”292 The statute provides that an act or practice is
dominion and control over that computer and/or the relevant information contained on that computer.”). For a
discussion of ECPA’s scope, see § Electronic Communications Privacy Act (ECPA), supra.
284 See, e.g., Double Click, 154 F. Supp. 2d at 520–526 (holding that plaintiffs could not meet CFAA’s $5,000
threshold by aggregating their damages, as damages could only be aggregated across multiple victims for a “single act”
against a “particular computer”); Google, 806 F.3d at 148–149 (holding that plaintiffs failed to meet damages threshold
because they failed to show they suffered any concrete harm); Mount v. Pulse Point, No. 13-6592-CV, 2016 WL
5080131, at *7–*9 (S.D.N.Y. Aug. 17, 2016) (same); but see In re Toys R Us, Inc., Privacy Litig., No. 00-CV-2746,
2001 WL 34517252, at *9 –*12 (N.D. Cal. Oct. 9, 2001) (rejecting defendants’ motion to dismiss CFAA action based
on defendants’ use of web bugs and cookies to track plaintiffs’ online activities and holding that plaintiffs adequately
pleaded damages under CFAA). Relatedly, plaintiffs’ failure to allege concrete harm through the use of cookies has led
some courts to conclude that the standing requirements under Article III of the Constitution were not met. See, e.g.,
LaCourt v. Specific Media, Inc., No. SACV 10-1256-GW, 2011 WL 1661532, *3–*6, *8 (C.D. Cal., Apr. 28, 2011)
(dismissing, with leave to amend, CFAA action for failure to allege harm giving rise to Article III standing). See also
infra § Private Rights of Action and Standing (discussing constitutional limitations on private rights of action).
285 18 U.S.C. §§ 1030(c)(4)(A)(i), (g).
286 Solove & Hartzog, supra note 60, at 588, 604 (“Because so many companies fall outside of specific sectoral privacy
laws, the FTC is in many cases the primary source of regulation. . . . [P]artly due to the FTC’s embrace of the selfregulatory approach, its impeccable timing, a large void in U.S. privacy law, and lack of existing alternatives, the FTC
became the go-to agency for privacy.”).
287 LabMD, Inc. v. Fed. Trade Comm’n, 894 F.3d 1221, 1228 (11th Cir. 2018) (“[A]t the time of the FTC Act’s
inception, the FTC’s primary mission was understood to be the enforcement of antitrust law. In 1938, the Act was
amended to provide that the FTC had authority to prohibit ‘unfair . . . acts or practices.’ This amendment sought to
clarify that the FTC’s authority applied not only to competitors but, importantly, also to consumers.”).
288 15 U.S.C. § 45(a)(2) (providing the FTC with jurisdiction over all “persons, partnerships, or corporations” except
certain exempted entities).
289 Id. For a discussion of common carriers regulated under the Communications Act, see supra § Common Carriers.
290 See, e.g., Nat’l Fed’n of the Blind v. Fed. Trade Comm’n, 420 F.3d 331, 334 (4th Cir. 2005) (“[A]ccording to the
FTC’s organic statute, non-profit organizations fall outside the scope of the agency’s jurisdiction.”).
291 15 U.S.C. § 45(a)(2).
292 Id. § 45(a)(1); see also FED. TRADE COMM’N, REPORT ON PRIVACY & DATA SECURITY 1 (2017), https://www.ftc.gov/
system/files/documents/reports/privacy-data-security-update-2017-overview-commissions-enforcement-policyinitiatives-consumer/privacy_and_data_security_update_2017.pdf (noting that the FTC’s “primary legal authority
comes from Section 5 of the [FTC] Act”).
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“unfair” only if it “causes or is likely to cause substantial injury to consumers which is not
reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to
consumers or to competition.”293 While the statute does not define “deceptive,” the FTC has
clarified in guidance that an act or practice is to be considered deceptive if it involves a material
“representation, omission, or practice that is likely to mislead [a] consumer” who is “acting
reasonably in the circumstances.”294 Under the FTC Act, the agency may enact rules defining
specific acts or practices as UDAPs,295 often referred to as “trade regulation rules” (TRRs)296 or
“Magnuson-Moss” rulemaking.297 However, to enact TRRs the FTC must comply with several
procedures that are not required under the notice-and-comment rulemaking procedures set forth in
Section 553 of the Administrative Procedure Act (APA), which are the default rulemaking
procedures for federal agencies.298 Among other things, these additional procedures require the
FTC to publish an advance notice of proposed rulemaking (ANPRM), give interested persons an
opportunity for an informal hearing, and issue a statement accompanying the rule regarding the
“prevalence of the acts or practices treated by the rule.”299 Consequently, the FTC rarely uses its
TRR rulemaking authority300 and has not enacted any TRRs regarding data protection.301 Rather,
293 15 U.S.C. § 45(n).
294 FED. TRADE COMM’N, POLICY STATEMENT ON DECEPTION 1–2 (Oct. 14, 1983), https://www.ftc.gov/system/files/
documents/public_statements/410531/831014deceptionstmt.pdf; see also, In re International Harvester, 104 F.T.C.
949, 1984 WL 565290, *85 (1984) (“Our approach to deception cases was described in a policy statement that the
Commission issued in 1983. . . . In brief, a deception case requires a showing of three elements: (1) there must be a
representation, practice, or omission likely to mislead consumers; (2) the consumers must be interpreting the message
reasonably under the circumstances; and (3) the misleading effects must be ‘material,’ that is, likely to affect
consumers’ conduct or decision with regard to a product.”).
295 15 U.S.C. § 57a(a)(1)(B) (“[T]he Commission may prescribe . . . rules which define with specificity acts or practices
which are unfair or deceptive . . .”).
296 FED. TRADE COMM’N, OPERATING MANUAL: CHAPTER SEVEN 2, https://www.ftc.gov/sites/default/files/attachments/
ftc-administrative-staff-manuals/ch07rulemaking.pdf (last visited Jan. 3, 2019) (stating that rules promulgated under
the FTC Act are “referred to as ‘trade regulation rules’ (TRRs).”).
297 The Magnuson-Moss Warranty—Federal Trade Commission Improvements Act amended the FTC Act to include
this rulemaking authority. Pub. L. No. 93-637 § 202(d), 88 Stat. 2183, 2198 (1975) (codified at 15 U.S.C. § 57a).
15 U.S.C. § 57a (providing that the FTC “shall proceed in accordance with section 553 of [the
APA]” as well as the other specified procedures); see also Auchterlonie & Sickler, supra note 68, at 1-28 (“The
298
[rulemaking procedures under the FTC Act] exceed the notice-and-comment procedures mandated in Section 553 of
the APA which otherwise typically apply to agency rulemakings.”). For an overview of the notice-and-comment
procedures under Section 553 of the APA, see CRS Report R41546, A Brief Overview of Rulemaking and Judicial
Review, by Todd Garvey.
299 15 U.S.C. § 57a(b)–(d).
300 See, e.g., Jeffrey S. Lubbers, It’s Time to Remove the ‘Mossified’ Procedures for FTC Rulemaking, 83 GEO. WASH.
L. REV. 1979, 1989–1990 (2015) (explaining that “no new rule makings under the Magnuson-Moss Procedures have
been initiated since 1980, when the procedures were made more complex by that year’s FTC Improvements Act,” other
than the FTC amending some if its “original trade regulation rules . . . after conducting period reviews of their
effectiveness”); see also Hartzog & Solove, supra note 2, at 2300 n.160 (“[Under Section 5] the FTC has only
Magnuson-Moss rulemaking which is so procedural burdensome that it is largely ineffective . . . . These rules require
the FTC Staff to engage in an industry-wide investigation, prepare draft staff reports, propose a rule, and engage in a
series of public hearings, including cross-examination opportunities prior to issuing a final rule in any area. These
processes are so burdensome that the FTC has not engaged in a Magnuson-Moss rule-making in 32 years.”) (internal
citations omitted).
301 See 16 C.F.R. pts. 408–460; see also Lubbers, supra note 300, at 1985–1989 (describing FTC rulemakings before
and under the Magnuson-Moss rulemaking procedures).
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as discussed further below, the agency largely uses enforcement actions to signal the types of acts
and practices it considers to be impermissible UDAPs.302
The FTC has brought hundreds of enforcement actions against companies alleging deceptive or
unfair data protection practices.303 Most of these actions result in companies entering into consent
decrees requiring the companies to take certain measures to prevent any further violations.304
While these consent decrees are not legally binding on those who are not a party to them, they are
significant because they reflect the type of practices that the FTC views as “unfair” or
“deceptive.”305 Indeed, some scholars view the principles arising from them as a type of
“common law of privacy.”306 Given the uniquely important role FTC enforcement plays in the
U.S. data protection landscape, it is worth noting the types of data protection practices the FTC
has viewed as “unfair” or “deceptive.”
Perhaps the most settled principle of the FTC’s “common law of privacy” is that companies are
bound by their data privacy and data security promises.307 The FTC has taken the position that
companies act deceptively when they gather, use, or disclose personal information in a way that
contradicts their posted privacy policy or other statements,308 or when they fail to adequately
protect personal information from unauthorized access despite promises that that they would do
so.309 In addition to broken promises, the FTC has alleged that companies act deceptively when
they make false representations in order to induce disclosure of personal information.310 For
example, in FTC v. Sun Spectrum Commc’ns Org., Inc., the FTC alleged that several
telemarketers acted “deceptively” by misrepresenting themselves as a credit card company and
302 Solove & Harzog, supra note 60, at 620–621 (“[F]or Section 5 enforcement . . . the FTC has only Magnuson-Moss
rulemaking authority, which is so procedurally burdensome that it is largely ineffective. The FTC must rely heavily on
its settlements to signal the basic rules that it wants companies to follow.”).
303 FED. TRADE COMM’N, REPORT ON PRIVACY & DATA SECURITY 2 (2017), https://www.ftc.gov/system/files/
documents/reports/privacy-data-security-update-2017-overview-commissions-enforcement-policy-initiativesconsumer/privacy_and_data_security_update_2017.pdf (“The Commission has brought over 500 enforcement actions
protecting the privacy of consumer information.”).
304 Solove & Hartzog, supra note 60, at 610 (“[V]irtually every [privacy-related] complaint has either been dropped or
settled.”).
305 Id. at 621 (“[FTC settlements] have a kind of precedential value, and they serve as a useful way to predict future
FTC activity.”).
306 Id. at 619 (“Although the FTC’s privacy cases nearly all consist of complaints and settlements, they are in many
respects the functional equivalent of common law.”). FTC commissioners have similarly referred to the FTC’s
enforcement as a common law approach. See, e.g., Justin Hurwitz, Data Security and the FTC’s Uncommon Law, 101
IOWA L. REV. 955, 966–967 (2016) (describing various statements from FTC commissioners regarding the FTC’s
common law approach).
307 Id. at 628 (“Much of the FTC’s privacy jurisprudence is based on a deception theory of broken promises.”).
308 See, e.g., Complaint, In the Matter of Myspace LLC, No. C-4369 (F.T.C. Aug. 30, 2012) (alleging Myspace
provided advertisers with users’ personally identifiable information, despite promises in its privacy policy that it would
not share such information); Complaint, In the Matter of Liberty Financial Companies, Inc., No. C-3891 (F.T.C. Aug.
12, 1999); Press Release, Fed. Trade Comm’n, Online Auction Site Settles FTC Privacy Charges (Jan. 6, 2000),
https://www.ftc.gov/news-events/press-releases/2000/01/online-auction-site-settles-ftc-privacy-charges (describing
settlement of allegations that an online operator used personal identifying information to generate spam, despite
agreeing to a privacy policy stating it would only gather personal identifying information from users for certain
authorized purposes).
309 See, e.g., Complaint, Fed. Trade Comm’n v. Ruby Corp., No. 1:16-CV-02438 (D.D.C. Dec. 14, 2016) (alleging that
operators of dating site AshleyMadison.com deceived consumers by assuring them personal information would be
protected but failing to implement the necessary security to prevent a data breach).
310 Solove & Hartzog, supra note 60, at 630 (“The FTC has also developed a general theory of deception in its
complaints based upon a company’s deceptive actions taken in order to induce disclosure of personal information.”).
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requesting personal information from individuals, ostensibly for the purpose of providing nonexistent credit cards to the individuals.311 The FTC has further maintained that companies act
deceptively when their privacy policies or other statements provide insufficient notice of their
privacy practices. For instance, in In the Matter of Sears Holdings Management Co., the FTC
alleged that Sears acted deceptively by failing to disclose the extent to which downloadable
software would monitor users’ internet activity, merely telling users that it would track their
“online browsing.”312
Along with “deceptive claims,” the FTC has also alleged that certain data privacy or data security
practices may be “unfair.” Specifically, the FTC has maintained that it is unfair for a company to
retroactively apply a materially revised privacy policy to personal data that it collected under a
previous policy.313 The FTC has also taken the position that certain default privacy settings are
unfair. In the case FTC v. Frostwire, for example, the FTC alleged that a peer-to-peer file sharing
application had unfair privacy settings because, immediately upon installation, the application
would share the personal files stored on users’ devices unless the users went through a
burdensome process of unchecking many pre-checked boxes.314 With respect to data security, the
FTC has more recently maintained that a company’s failure to safeguard personal data may be
“unfair,” even if the company did not contradict its privacy policy or other statements.315 While at
least one court has agreed that such conduct may be “unfair” under the FTC Act,316 a recent U.S.
Court of Appeals for the Eleventh Circuit317 case, LabMD v. FTC, suggests that any FTC cease
and desist order based on a company’s “unfair” data security measures must allege specific data
failures and specific remedies.318 In LabMD, the court noted that the FTC’s order “contain[ed] no
prohibitions” but “command[ed] [the company] to overhaul and replace its data-security program
311 Complaint, Fed. Trade Comm’n v. Sun Spectrum Commc’ns Org., Inc., No. 03-8110 (S.D.N.Y. Dec. 2, 2003); Press
Release, Fed. Trade Comm’n, U.S. and Canadian Telemarketers Pay $415,000 to Settle FTC Charges (Oct. 24, 2005),
https://www.ftc.gov/news-events/press-releases/2005/10/us-and-canadian-telemarketers-pay-415000-settle-ftc-charges.
312 See, e.g., Complaint, In the Matter of Sears Holdings Management Co., No. C-4264 (F.T.C. Aug. 31, 2009),
(alleging that Sears failed to disclose the extent to which downloadable software would monitor users’ internet activity,
merely telling users that it would track their “online browsing”); see also Complaint, In the Matter of Lenovo, No. C4636 (F.T.C. Dec. 20, 2017) (alleging that Lenovo acted deceptively by installing third-party software on consumers’
computers that collected extensive personal data and simply telling consumers that the software would let them
“discover visually similar products and best prices while [they] shop”).
313 See, e.g., Complaint at 9, In the Matter of Facebook, FTC File No. 0923184 (F.T.C. Nov. 9, 2011) (alleging that
Facebook acted unfairly by materially changing its privacy policy regarding what information users could keep private
and retroactively applying these changes to previously collected information ); Complaint at 5, In re Gateway Learning
Corp., FTC File No. 0423047 (F.T.C. Sept. 17, 2004) (alleging that Gateway Learning acted unfairly by changing its
privacy policy to allow it to share personal information with third parties and retroactively applying this new policy to
previously collected data).
314 Complaint, Fed. Trade Comm’n v. Frostwire LLC, No. 1:11-cv-23643 (S.D. Fla. Oct. 7, 2011), available at
https://www.ftc.gov/sites/default/files/documents/cases/2011/10/111011frostwirecmpt.pdf.
315 See, e.g., Complaint at 8, United States v. Rental Research Services, Inc., No. 0:09-cv-00524-PJS-JJK (D. Minn.
Mar. 5, 2009), available at https://www.ftc.gov/sites/default/files/documents/cases/2009/03/090305rrscmpt.pdf
(alleging that defendant’s failure to employ reasonable and appropriate security measures to protect consumers’
personal information was an unfair act or practice).
316 Fed. Trade Comm’n v. Wyndham, 10 F. Supp. 3d 602 (D.N.J. 2014) (declining to dismiss the FTC’s action alleging
that defendant violated both the unfairness and deceptiveness prongs of Section 5(a) of the FTC Act by failing to
maintain reasonable and appropriate data security for consumers’ personal information), aff’d, 799 F.3d 236 (3d Cir.
2015).
317 This report references a significant number of decisions by federal appellate courts of various regional circuits. For
purposes of brevity, references to a particular circuit in the body of this report (e.g., the Eleventh Circuit) refer to the
U.S. Court of Appeals for that particular circuit.
318 894 F.3d 1221.
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to meet an indeterminable standard of reasonableness.”319 The court concluded that such an order
was unenforceable, reasoning that the order “effectually charge[d] the district court [enforcing the
order] with managing the overhaul.”320 The court further suggested that penalizing a company for
failing to comply with an imprecise standard “may constitute a denial of due process” because it
would not give the company fair notice of the prohibited conduct.321 Ultimately, while LabMD
did not decide whether inadequate data security measures may be “unfair” under the FTC Act,322
the decision is nevertheless a potentially significant limitation on the FTC’s ability to remedy
such violations of the statute.
LabMD is also a notable case because it adds to the relatively sparse case law on the FTC Act’s
“unfair or deceptive” prohibition. As mentioned, the large majority of the FTC enforcement
actions are settled, with parties entering into consent decrees.323 To the extent FTC allegations are
contested, the FTC may either commence administrative enforcement proceedings or civil
litigation against alleged violators.324 In an administrative enforcement proceeding, an
Administrative Law Judge (ALJ) hears the FTC’s complaint and may issue a cease and desist
order prohibiting the respondent from engaging in wrongful conduct.325 In civil litigation, the
FTC may seek equitable relief, such as injunctions or disgorgement,326 when a party “is violating,
or is about to violate,” the FTC Act.327 The FTC may only seek civil penalties, however, if the
party has violated a cease and desist order, consent decree, or a TRR.328 The FTC Act does not
319 Id. at 1236.
320 Id. at 1237.
321 Id. at 1235–1236.
322 Id. at 1231 (“We will assume arguendo that the Commission is correct and that LabMD’s negligent failure to design
and maintain a reasonable data-security program invaded consumers’ right of privacy and thus constituted an unfair act
or practice.”).
323 Solove & Hartzog, supra note 60, at 610 (“[V]irtually every [privacy-related] complaint has either been dropped or
settled.”).
324 15 U.S.C. §§ 45(a)(2), 45(b), 53(b).
325 Id. § 45(b); see also, FED. TRADE COMM’N, A BRIEF OVERVIEW OF THE FEDERAL TRADE COMMISSION’S
INVESTIGATIVE AND LAW ENFORCEMENT AUTHORITY (July 2008), https://www.ftc.gov/about-ftc/what-wedo/enforcement-authority (“Upon conclusion of the hearing, the ALJ issues an ‘initial decision’ setting forth his
findings of fact and conclusions of law, and recommending either entry of an order to cease and deist or dismissal of
the complaint.”).
326 Civil actions are brought under Section 13(b) of the FTC Act, codifi
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