In an effort to provide clarity on it its revised Children’s Online Privacy Protection Rule (“Rules”), the FTC recently published a list of Frequently Asked Questions (“FAQs“) with information on how to comply. The FAQs should provide helpful guidance to operators of commercial websites and other online services (such as mobile apps) that are either directed to children under 13 or otherwise collecting, using and/or distributing information from children. The Rules, which implement the Children’s Online Privacy Protection Act (“COPPA”), were amended by the FTC in December 2012 in an effort to “keep up with changing technology”. The Rules appear to be a regulatory priority: on May 15th, the FTC sent letters to 90 companies highlighting the changes and warning that new compliance measures may be necessary — including changes in privacy and data retention policies, notices, and parental consent mechanisms.
Apr 23
Court Rules Against Digital Music Resale Service
Can you legally re-sell digital goods like the music files you’ve downloaded from iTunes? That was the question in Capitol Records, LLC v. ReDigi Inc., 2013 WL 1286134 (S.D.N.Y. Mar. 30, 2013). The court held that the resale of copies of digital music files, as facilitated by the defendant’s technology, was not permissible. The Court also found that, because the resale of digital music via ReDigi’s online marketplace involved the making of unauthorized copies of digital files, ReDigi was liable for copyright infringement. Here’s a summary.
Apr 18
Drive-By Storing: Google Agrees to Pay $7 Million to Settle Street View Privacy Case
According to a recent settlement, in addition to images of the world’s roads and buildings, Google’s special Street View vehicles may have also collected personal information from users on unencrypted business and personal wireless networks.
Apr 16
Frankfurt Kurnit Named One of the Hottest Midsize Law Firms
Please excuse the quick commercial, but we are very pleased to report that the National Law Journal just named Frankfurt Kurnit to its 2013 Midsize Hot List – a list of 20 of the nation’s top midsize law firms. We’re so thrilled with this honor that we wanted to share it with our readers. Here’s what the National Law Journal had to say about us.
Apr 12
New York State Sales Tax for Online Retailers Survives Constitutional Challenge
On March 28, 2013, the New York Court of Appeals rejected challenges by major online retailers and upheld the constitutionality of a New York Internet sales tax statute. See Overstock.com v. NYS Dept. Taxation & Fin., Nos. 33 & 34, NYLJ 1202593915304, at *1 (Ct. of App., Decided March 28, 2013). The case was a consolidation of two lawsuits, one brought by Amazon.com and another by Overstock.com, each of which argued that a New York statute violated the U.S. Constitution’s Commerce Clause and Due Process Clause by requiring online retailers to collect sales taxes on purchases made by New York residents if the retailers have agreements with New York based affiliates (i.e., independent sites that link to a retailer in return for a commission or other consideration).
Mar 07
Use of Competitor’s Names as Advertising Keywords Does Not Violate Rights of Publicity, Says Wisconsin Court of Appeals
Is the use of a competitor’s name in keyword advertising a violation of his or her right of publicity? This issue was recently addressed by a Wisconsin appellate court in Habush v. Cannon, 2013 WL 627251 (Wisc. App. Ct. Feb. 21, 2013). The case arose after one personal injury law firm, a defendant in the case, purchased names of a competing law firm’s partners as advertising keywords on several search engines. In purchasing the advertising keywords, the defendant firm was able to assure that people searching on those search engines for the plaintiffs’ names would be shown sponsored links identifying the defendant’s website. In granting the defendant’s motion for summary judgment, the Court found that this usage is distinguishable from putting a competitor’s name or image in an advertisement or on a product. Accordingly, the Court held that the defendants’ use of the keywords did not constitute the kind of “use” prohibited by Wisconsin’s right of publicity statute. The Court classified this use of the plaintiffs’ names as a “non-visible” use because consumers could not actually see the plaintiffs’ names in the defendant’s ads, but declined to extend its holding to all “non-visible” uses and instead restricted itself to Internet keyword search terms specifically. In its analysis, the Court analogized the circumstances to the placement of billboards near a competitor’s store because such a strategy does take advantage of the plaintiffs’ names and reputation but does not violate the Wisconsin right of publicity statute.
By Glen Westerback and Adam Nelson
Feb 13
FTC Sanctions Ad Network for History Sniffing
In December, an FTC order barred Epic Marketplace, Inc. from continuing a practice known as history sniffing. The technology employed by the company allowed them to track sensitive information including certain medical and financial information for millions of consumers. According to the terms of the settlement, the company must cease those practices and destroy any information collected previously and, upon FTC request, submit to auditing of data collection practices, consumer data complaints, and the company’s terms of use agreements for three years. The settlement also bars Epic Marketplace from making future misrepresentations regarding the collection of such information.
Feb 13
Court Invalidates Zappos’ Browsewrap Agreement
In early 2012, Zappos, a division of Amazon, was the victim of an enormous customer data breach affecting 24 million records. Class action attorneys filed cases against the online shoe retailer citing multiple breaches of contract and privacy violations. Zappos’ Terms of Use (TOU) contained an arbitration provision, which may have saved the company from the plague of the class action bar, but it didn’t. In what may become a trend, a federal district court in Nevada found the TOU invalid for two reasons.
Feb 08
FTC Releases Best Practices for Mobile Privacy and Fines Mobile Service Provider $800,000
The Federal Trade Commission (FTC) issued a staff report on Friday recommending ways for participants in the mobile ecosystem to improve their mobile privacy disclosures. The report includes guidance tailored for key commercial players involved in the mobile area, including platforms (such as Apple’s iOS and Google’s Android), app developers, certain third parties (such as ad networks and analytics companies), and trade associations. The report is based, in part, on feedback the FTC received at a May 2012 workshop, as well as other panel discussions and written submissions. Similar recommendations from California’s Attorney General were released last month.
Jan 14
California Releases New Mobile App Privacy Recommendations
California’s Attorney General recently released a set of official privacy recommendations for consideration by mobile app developers, mobile ad networks and related industry players. The recommendations, published in a report entitled, “Privacy on the Go: Recommendations for the Mobile Ecosystem,” include development and disclosure recommendations that encourage participants in the mobile app ecosystem to consider privacy at the outset of the app design process and to focus on minimizing surprises to users from unexpected privacy practices. Although some of the recommendations are already required by existing law, most of them are provided for purposes of educating the industry and promoting privacy best practices. This report comes on the heels of recent enforcement actions initiated by the California Attorney General against mobile app producers, as well as a recent FTC report critical of mobile app privacy practices.
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