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Should Bar Associations Vet Technology Service Providers for Attorneys?

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[Originally published in GPSOLO, Vol. 36, No. 6, November/December 2019, by the American Bar Association. Reproduced with permission. All rights reserved.]

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Bar associations across the country have similar goals: advance the rule of law, serve the legal profession, and promote equal access to justice. Technology can easily support these goals. From online research and billing software, to virtual receptionist and SEO services, technology vendors improve the efficiency and accessibility of attorneys. It is no wonder then that bar associations around the country are promoting technology solutions for their members.

Despite the obvious benefits, bar associations need to be diligent about vetting technology vendors. By promoting one technology provider over another, bar associations could run afoul of advertising laws, tax requirements, and software agreements. In addition, bar associations and their members need to pay close attention to technology vendors’ cybersecurity safeguards to protect client confidences.

This article will briefly address each of these issues in turn and provide a non-exhaustive checklist of considerations before choosing a legal technology provider.

Bar Associations as Influencers

When we think of product endorsements today, we think of social media influencers, bloggers, and vloggers—not bar associations. Yet, bar associations wield incredible influence over the purchasing decisions of their members. Given this influence, bar associations should stay mindful of laws addressing unfair and deceptive advertising, such as Section 5 of the Federal Trade Commission Act (FTC Act), state false advertising laws, and state unfair trade practices acts (little FTC acts).

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What Is Happening in Children’s Online Privacy?

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Children’s online privacy has always been an important topic, but a number of recent developments around the world have many businesses taking it more seriously. In September, Google agreed to pay a record $170 million fine to the U.S. Federal Trade Commission for violating the Children’s Online Privacy Protection Act (COPPA) by illegally collecting personal information from children without parental consent and using it to profit through targeted ads. A few weeks later, China’s own version of COPPA called the “Measures on Online Protection of Children’s Personal Data,” came into force, providing further clarity on protecting children’s personal data online under China’s Cyber Security Law. On October 7, the FTC hosted a public workshop to explore whether to update COPPA, which is over 20 years old and in need of a refresh due to the emergence of new technologies. (Just think of all those smart devices, social media platforms and educational apps and technologies that were not around in 1998). Finally, the California Attorney General recently released proposed regulations to the California Consumer Protection Act, which goes into effect in January 2020, that would require a business that knowingly collects the personal information of children under the age of 13 to establish, document and comply with a reasonable method for determining that the person affirmatively authorizing the sale of the personal information about the child is the parent or guardian of that child.

Many children start using the Internet at an early age, raising privacy issues distinct from those for adults. First, children may not understand what data is being collected about them and how it is used. Second, children can easily fall victim to criminal behavior online by providing seemingly innocuous information to web users who can appropriate such information for malicious purposes. Third, children cannot give the same meaningful consent to data collection and use activities as an adult. 

In the U.S., Congress passed COPPA in 1998 to protect children’s use of the Internet—particularly websites and services targeted toward children. COPPA requires website operators to provide clear and conspicuous notice of the data collection methods employed by the website, including functioning hyperlinks to the website privacy policy on every web page where personal information is collected. It also requires affirmative consent by parents prior to collection of personal information for children under the age of 13. Recognizing that teenagers between the ages of 13 and 18 are not protected under COPPA, many individual states have made efforts to address privacy issues for this age group.

Recognizing the need to update COPPA to keep up with the times, the FTC considered the following topics at the October workshop, among others:

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The 2019 Capital One Breach Compared to the 2017 Equifax Breach: Evolving and Improving Attitudes toward Data Security, Breach Detection, and Breach Notification

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On September 7, 2017, Equifax announced that it had suffered a data breach that exposed the personal data of nearly 147 million people. Two years following the Equifax breach, Capital One also suffered a data breach nearly as massive in scope, affecting approximately 100 million users in the United States and 6 million users in Canada.

A casual observer might think that the two breaches are similar. After all, they both affected a large financial institution and encompassed over a million financial records. The similarities end there, however. Capital One implemented security measures to protect its customer data and engaged in a speedy response to an insider threat. Equifax failed to implement even basic data protection measures and was laggardly in reporting the inevitable breach.

Only time will tell what the full repercussions will be of these two breaches. But based on the facts in front of us, Capital One’s quick response to this breach will ultimately protect more customers in the long run. Comparing the circumstances surrounding the two breaches show a positive trend toward companies taking their customers’ data more seriously and mindfulness of ever-increasing consumer vigilance about their own data.

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The FTC Ramps Up Privacy Enforcement

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Following increased congressional scrutiny over its data privacy enforcement practices in 2018, the FTC has ramped up its enforcement actions in recent months, giving some real bite to current federal privacy laws:

  • On February 27, 2019 the FTC filed a complaint against the operators of lip-syncing app Musical.ly—now known as TikTok – for failing to seek parental consent before collecting the personal information of users under the age of 13. In response to the FTC’s complaint, TikTok agreed to pay a $5.7 million settlement to the agency, marking the largest-ever COPPA fine in US history.
  • Throughout March, the FTC obtained settlements against 4 separate robocall operations: NetDotSolutions, Higher Goals Marketing, Veterans of America, and Pointbreak Media. These cases charged these separate entities for violations of the FTC Act (unfair and deceptive trade practices) and the agency’s Telemarketing Sales Rule (TSR) – including its Do Not Call (DNC) provisions.
  • On March 26, 2019 the FTC announced a broad inquiry into the data collection practices of broadband companies under Section (b) of the FTC Act. The agency issued orders to AT&T Inc., AT&T Mobility LLC, Comcast Cable Communications doing business as Xfinity, Google Fiber Inc., T-Mobile US Inc., Verizon Communications Inc., and Cellco Partnership doing business as Verizon Wireless, seeking information about the collection, retention, and sharing of personal information. The FTC investigation highlights recent consumer concerns about data privacy and tracking by ISPs, following high-level acquisitions of content providers like AOL, Yahoo, and DirectTV. We are watching closely, as this may be the start of one of the first joint privacy-antitrust enforcement actions by the FTC.

These enforcement actions highlight the FTC’s role as the de facto data protection authority for the United States. Yet, the FTC’s mandate extends far beyond data privacy, and includes regulatory authority over false advertising claims, anticompetitive behavior, and merger review. While Congress continues to debate the passage of a federal bipartisan privacy bill, it behooves them to keep in mind the current staff and funding limitations of the FTC in any proposed drafts.