Category: Compliance

Ready for Cookie Sweep Day?

Cookie Sweep Day is coming!

The French data protection authority CNIL will conduct a “cookie sweep” this coming September 15 to verify compliance with its recommendations on cookies and tracers used to collect and store personal user information on websites. These audits will be both on-site and remote inspections, meaning that as a website owner, your premises could be subject to a visit by the authorities for non-compliance.

Continued below…

Oreo

The CNIL will feed the data crumbs it gathers into a program of website audits it will conduct in October.

The cookie sweep is not limited to France – all other EU national data protection authorities will be conducting their own sweeps as well across the Member States, to inspect and monitor cookie compliance with the ePrivacy Directive.

Should you be concerned?

To be clear, under the regulations, only certain cookies require a user’s prior consent –  in general, cookies set by third party advertising networks. In a word, if you’re monetizing your site with third party ads, you must ask users for their consent to those cookies (if you’re not already asking for prior consent for these, you should really do it, er, now).

If you’re not already aware of how it works, a user can consent by clicking a banner explaining that the site uses cookies for tracking/advertising purposes or more simply, if the user continues through deeper links within the site and the banner remains persistent.

Users must be able to withdraw consent at any time, and cookies and consents must be reset at a minimum every 13 months. The CNIL holds sites and third party advertising networks jointly liable for compliance.

What’s the risk?

If you’re running a business through ads or tracking via your site, the financial risk is moderate, depending on your size. This past January the CNIL fined Google €150,000 for having cookies set while the banner was loading instead of after consent was given. Clever folks, Google. Anyway, the risk is there.

Nota bene…

Functional cookies and web analytics cookies do not require prior consent but users must have clear and user-friendly information regarding these cookies, including information on how to opt-out.

Another important note is that sites cannot deny users access if they choose to block advertising cookies and cannot make acceptance of advertising cookies a condition of using the service.  Where a business model depends on making content or services freely available in exchange for targeted advertising via cookies, the regulations are…highly disruptive.

The CNIL has also put up an app (“CookieViz”) for users to verify cookies on their Mac, Windows or Linux device.

 

 

 

French whistleblowers get new legal protections

Palais de Justice, Nice

As of 1 February, the new French whistleblower protection law is in effect. Its provisions protects French employees of private companies from sanction or dismissal “for having reported or testified in good faith, facts constituting an offense or a crime of which he was aware in the exercise of its functions”.

A similar provision took effect to protect civil servants in France’s considerable public sector from retaliation after reporting illegal activities.

Under both laws a whistleblower who took part in any alleged offenses is  granted immunity from prosecution so long the whistleblower’s actions only amounted to an attempted offense or if the whistleblowing action prevented the crime from actually occurring. Where the whistleblower has actively taken part in some of the criminal actions but acts in time to stop the commission of the final criminal act, any sentence  decided by a court will be halved.

Why is this a landmark for France when whistleblower status has existed for decades in other countries and in the US since 1778?

Firstly, compliance with international accounting, money laundering, anti-terror laws and banking regulations — and cross-border enforcement of them — means that New York or London listed companies located in France had to find a legal way to implement a whistleblowing policy for French employees, this in spite of the lack of a local legal regime and the protestations of the CNIL, the national data privacy authority.

Secondly, it should be understood that France has a culture in which reporting of “private affairs”  to authorities is highly taboo. The chastening World War II experience (laws requiring citizen cooperation and informing to fascist Vichy and Occupation forces) meant that any institution of a new legal frame for anonymous reporting to the authorities carried a heavy burden of proving its usefulness versus possible abuse.

Thirdly, this was also an excellent opportunity for the Ecologists, part of the governing coalition to extend whistleblowing protection for environmental law violations – perhaps the most satisfying result of the change for ordinary citizens.

Unlike the US whistleblowing provisions, the new French law does not provide for pecuniary rewards for whistleblowers and the immunity from prosecution provisions only apply to to natural persons. It also allows associations to join criminal proceedings as civil parties – another advantage for environmentalists that has not existed in the past.

In any case, it is a step forward for revealing corrupt practices and protecting honest citizens.

Is Google Analytics Illegal?

Today the Norwegian data privacy authority declared that it considers the use of the Google Analytics tool by the national tax administration and the educational loan fund illegal.

Their argument is relatively clear. The public agencies apparently accepted Google’s standard terms of service which allows it to use IP addresses of tax and education fund users to provide other services. Moreover, if the user is logged into a Google services at the time, Google will also be able to identify the user.

While Norway is not an EU Member, it is a member of the European Free Trade Area and its data protection legislation closely tracks the EU’s, which makes this finding somewhat disconcerting. In fact, since IP addresses collected the agencies are sent to Google for processing, Google becomes an undeclared “data processor”, in clear violation of the law.

I can understand how this might happen since Google makes it simple (and tempting) to adopt Analytics to follow traffic on your site and people in the agencies’ IT departments therefore had a free alternative to going through a public procurement process to acquire a similar service that would properly treat the personal data.

Bottom line, there’s no free software out there. Second bottom line, hire a lawyer to train your IT department in the basics of data protection law.

What you don’t know about EU DATA PRIVACY law and why you need to know it today.

Outside a select group of specialists in IT law (and the even more limited and select group of data privacy law specialists), few company advisors or corporate legal departments truly understand how to be in perfect compliance with European Union data privacy regulations.

Yet nearly every company doing business in the EU has to comply.

If you’re reading this, you have probably been frustrated by the complexity of the requirements, provisions such as Safe Harbor, Model Contractual Clauses, whether to appoint a Data Privacy Officer, etc.

Some of that is about to change.  Basic compliance could soon be achieved by simply amending your company’s internal policy documents.

How? By adopting Binding Corporate Rules, aka “BCRs”.

BCRs are internal policies that any company controlling data can adopt and apply to its entire group, wherever it is doing business, and be compliant with EU Data Privacy regulations, once and for all.

Until now, BCRs were only an option for ‘controllers’ – but the European Commission’s Article 29 Working Party has adopted a document (WP195) on BCRs for data ‘processors’ (the vast majority of companies are processors, not controllers; if you have to ask, you’re most likely a processor).

Why do you need to know this today?

Because the rules the Working Party published are essentially the same as those already in effect for data controllers – meaning that you can start drafting your BCRs today and ready them for submission. As soon as we are clear that the currently non-binding document is acceptable to EU Member State data authorities, you’re good to go.

Given the pressure from the private sector to simplify data privacy compliance, I think that we’ll soon have a win-win here.

If you need more information or would like help working on your data privacy issues, click the feedback button (on the left).

 

Donald Trump on bribery scandals: US “crazy” to enforce FCPA.

On CNBC’s Squawk Box, tycoon, occasional presidential candidate, Reality TV star and bottled water purveyor Donald Trump was asked about Wal-Mart’s allegedly widespread bribery in Mexico. Having obviously thought through the arguments for and against FCPA reform, he provided the following insights:

If you want to operate in Mexico, you have to pay bribes.

This is how business is done.

This country is absolutely crazy. Every other country goes into these places and they do what they have to do. It’s a horrible law and it should be changed. We are like the policeman for the world. It’s ridiculous.

The world is laughing at us.

Let’s parse this.

1. Operating in Mexico requires paying bribes.

According to Transparency International, Mexico scores 3/10 on the bribery index (10/10 meaning little or no bribery). Empirically, Trump is 70% right. Unless a company has chosen to adhere to OECD conventions and applicable anti-corruption laws, it would likely do more business in Mexico by greasing the right hands.

2. This is how business is done. Every other country goes into “these places” (countries with high levels of corruption) and does business according to local mores, in violation of the FCPA.

Here is a list of the 10 largest FCPA fines and settlements 1977-2012:

  1. Siemens (Germany) $800 million
  2. KBR/Halliburton (US) $579 million
  3. BAE (UK) $400 million
  4. Snamprogetti (Netherlands/Italy) $365 million
  5. Technip (France) $338 million
  6. JGC Corporation (Japan) $218.8 million
  7. Daimler (Germany) $185 million
  8. Alcatel-Lucent (France) $137 million
  9. Magyar Telekom (Hungary) $95 million
  10. Panalpina (Switzerland) $81.80 million

If FCPA prosecutions are an accurate statistical measure of the willingness of foreign businesses to participate in corruption, Trump is mostly correct. Only one US company makes the list. Moreover, with nine foreign corporations on the list, it does appear that the US is the “policeman for the world” (see DOJ site for the complete list).

3. The US is crazy.

That’s probably a matter of opinion. Watching CNBC for a few days straight might make one conclude that yes, it is crazy.

4. The world laughing at the US [for enforcing the FCPA].

Foreign companies might find the US’s anti-corruption stance risible (until they find themselves caught up in it). For example, Siemens had no compunction about including bribery in its budgets, despite the fact that they were directly subject to the law.

Criminal penalties, disgorgements, fines and consent orders levied against FCPA violators are tragicomically invisible to the vast majority of the world’s population which suffers through the indignity of having to live and do business within highly corrupt economies. Monies collected by the US government or the SEC never make it back to these individuals. 

His personal life, histrionics and buffoonery aside, Trump is a strategic thinker. Perhaps his frank talk isn’t surprising given that apart from a dust-up with the SEC over financial reporting about 10 years ago (settled out of court), he has not had any notable legal troubles over a long career in real estate and the gaming industry.

In my opinion, Trump runs a tight ship, otherwise there would be more blips on the map; his views on how to do business in China, India, Mexico or other ethically-challenged countries likely have nothing to do with how deals are finally done by the Trump Organization. But he would certainly appreciate being able to compete on a level field with foreign businesses for whom bribery is simply another accounting line item.

As an aside, perhaps Trump is engaged in a bit of spin in light of his competitor and onetime enemy Steve Wynn’s unlikely use of the statute internally to oust business partner Kazuo Okada?

69 Questions: EU quizes the G on its new privacy policy.

France’s data privacy authority CNIL (acting under EU mandate) sent Google the following questionnaire in order to clarify a number of concerns on the policy’s implementation, Google’s due diligence vis-a-vis its users and compliance of the policy with EU regulations.

The EU’s Article 29 Working Party (grouping Member State data protection authorities) stated that it further needs to clarify the consequences of the policy for users; specifically different levels of users, such as whether or not they have a Google Account, are non-authenticated, or simply passive users of Google’s services through Google APIs via other websites and/or applications (advertising, analytics, etc.).

Many of the questions seem to point in the direction of Competition Law concerns. It’s hard to imagine that the EU would be posing the same questions about Yahoo!’s privacy policy (which to my eyes, looks compliant).

The CNIL asked Google to provide written responses by April 5. Under EU law, responses are confidential unless Google consents to their release.

 

NGO on FCPA reform: fines should compensate victims.

The SERAP (Socio-Economic Rights and Accountability Project) has added its voice to the calls for FCPA reform.

In a press release, the Nigerian NGO proposes that the US DOJ and SEC allocate a percentage of funds from fines exacted on corporations to aide the actual victims of corrupt government officials and agencies.

SERAP argues that since the FCPA and other anti-corruption laws do not provide for civil actions (apart from under the the Alien Torts Act) and moreover since there is little possibility of recovering damages in the country where the corruption occurred, the US government should share civil penalty and disgorgement proceeds with the victims.

Last week the DOJ replied to the US Chamber of Commerce’s reasonable pleas to “restore balance” and provide clarity on the law (their letter is here) by agreeing to discussions. The DOJ owes a similar response to SERAP. While the NGO lacks the backing of the hundreds of large corporations represented by the USCC, its argument is one that needs to be taken seriously.

SERAP provides some guidance on how civil penalty and disgorgement proceeds should be distributed in a systematic and fair manner to NGOs and the US Congress should invite them to testify in hearings on FCPA reform. That’s probably unlikely though since we probably won’t see any substantial progress on the issue until after the US presidential elections this November.

Updated: The FCPA Professor blog examines this issue in further depth.

 Photo: Rory Mullholland

What to make of the EU reaction to Google’s new privacy policy?

Yesterday’s letter from the French National Commission on Information Technology and Freedoms (CNIL) points out some very specific problems in Google’s widely publicized new privacy policy, which comes into effect 1 March.

While the new policy is exemplary in its clear language, the issues the CNIL enumerates are not so arcane as to concern only specialists in data privacy law.

In sum, the CNIL wants Google’s privacy policy to explain 1) which Google services will collect and/or process personal data, 2) the specific personal data which will be collected and/or processed by each service and 3) how Google will inform the individual of her/his rights regarding access, correction, etc. for the personal data held by each service.

While all this sounds like formalities, complying with EU data privacy law is all about formalities. Google should know this better than anyone today, especially considering the level of expertise they have in data privacy matters.

As it is, Google has (for simplicity’s sake, one would surmise) used a negative definition of what it will not do with an individual’s personal data. From a philosophical point of view, this is a bit like the difference between Civil and Common Law conceptions of liberty. For Civilists, a right doesn’t exist unless it is enumerated. Civilists like things written down.

I think that we’ll likely see more PR pushback from Google in the next few weeks until their global data privacy counsel can talk his colleagues and clients into conceding that their new policy could use a few links to deeper explanations to be compliant with EU law. Google wants to be a good European, after all.

The Opinion 10/2004 on More Harmonised Information Provisions is basic but useful guidance on how to draft a compliant privacy policy statement. Well worth looking at.

 

The human factor: Dassault nEUROn drone blueprints stolen.

In an incident right out of a Bond film, Le Parisien newspaper reported Wednesday that documents related to Dassault Aviations’s nEUROn stealth drone were stolen at Paris’ Gare du Nord train station.

The theft was carried out using a common pickpocket distraction technique where one of the executives carrying the documents quit a ticket queue (and left his briefcase) to come to the aid of his travelling companion who was being harassed by a vocal young man. When he returned, his briefcase was obviously gone, probably on its way to a competitor.

Dassault Aviation PR says no sensitive documents were taken.

This scenario is ripe for addition to a training deck on document management and how to behave in public. It’s a shame for Dassault but I’m sure their compliance department is having fun debriefing all concerned.

Photo: Dassault Aviation.

Lasers to Iran: U.S. Export Regulations are serious business.

According to Just Anti-Corruption, U.S.-based PRC Laser has been fined $42,000 by the U.S. Commerce Department for shipping an industrial laser to Iran through a 3rd party based in Dubai. The laser itself sold for $39,000.

If the material had been more sensitive, the company could have been banned from exporting its products and perhaps excluded from making any sales to the U.S. government.

As has been noted on previous occasions on this site, a terrifically weak link in regulatory compliance is a third party distributor. If PRC laser had ever visited Dubai, they would likely have noticed the huge amount of business that Iran does there and was likely doing with their “end customer”. Iran is in fact one of the UAE’s largest trading partners and Iranian-owned businesses dot the industrial zones around the city-states.

As an old law professor once put it to this writer, “before you make the deal, walk the land.”

Photo: PRC laser.