World Tech Law

Apr. 5, 2007 - During its final week in session, the 109th Congress passed a measure that aims to enable the Federal Trade Commission (“FTC”) to be more effective in protecting consumers from spam, spyware, and Internet fraud on a global scale. The Undertaking Spam, Spyware, And Fraud Enforcement With Enforcers Beyond Borders Act of 2006 (the “US SAFE WEB Act”) empowers the FTC to share confidential information and investigational assistance with counterpart agencies in foreign countries. Just before the end of 2006, the President signed the measure into law. The key provisions of the measure are summarized below:

Key Provisions:

Expansion of Information Sharing and Investigation: The measure will allow to the FTC to share confidential information regarding consumer protection matters with foreign law enforcers, subject to the receipt of adequate confidentiality assurances. This new FTC authority is similar to the authority presently possessed by other US agencies and authorities, and, arguably, is needed to allow the FTC to share information with foreign agencies to help them halt fraud, deception, spam, spyware and other consumer protection law violations targeting consumers in the United States.

Expanding Investigative Cooperation: The bill will allow the FTC to conduct and participate in investigations and discovery designed to assist foreign law enforcers in appropriate cases.

Obtaining More Information from Foreign Sources: The measure will also allow the FTC to protect information provided by foreign enforcement agencies from public disclosure, where confidentiality protection was imposed as a condition of disclosure of such information by the applicable foreign agency.

Protecting the Confidentiality of FTC Investigations: The measure contains provisions that would safeguard FTC investigations in a defined range of cases. More specifically, it will (i) generally protect recipients of Commission Civil Investigation Demand (each, a “CID”) from possible liability for keeping those CIDs confidential; (ii) authorize the Commission to seek a court order in appropriate cases to preclude notice by the CID recipient to the investigative target for a limited time; and (iii) tailor the mechanisms available to the Commission to seek delay of notification currently required by the Right to Financial Privacy Act (“RFPA”) or the Electronic Communications Privacy Act (“ECPA”), to better fit FTC cases.

Protecting Certain Entities Reporting Suspected Violations of Law: This provision protects a limited category of appropriate entities from liability for voluntary disclosures to the FTC about suspected fraud or deception, or about recovery of assets for consumer redress.

Allowing Information Sharing with Federal Financial and Market Regulators: The measure adds the FTC to RFPA’s list of financial and market regulators allowed to readily share appropriate information.

Confirming the FTC’s Remedial Authority in Cross-Border Cases: The bill expressly confirms: (i) the FTC’s authority to redress harm in the United States caused by foreign wrongdoers and harm abroad caused by U.S. wrongdoers; and (ii) the availability, in cross-border cases of all remedies available to the FTC, including restitution.

Enhancing Cooperation Between the FTC and DOJ in Foreign Litigation: The measure permits the FTC to cooperate with the DOJ in connection with foreign litigation of FTC matters.

Clarification of FTC Authority to Make Criminal Referrals: The law expressly authorizes the FTC to make criminal referrals for prosecution when violations of FTC law also violate U.S. criminal laws.

Providing for Foreign Staff Exchange Programs: The bill authorizes foreign staff exchange arrangements between the FTC and associated with foreign government authorities. It also permits the FTC to accept reimbursement for its costs associated with these arrangements.

Authorizing Expenditure on Joint Projects: The measure authorizes the FTC to expend appropriated funds, not to exceed $100,000 annually, toward operating expenses and other costs of cooperative cross-border law enforcement projects and bilateral and multilateral meetings.

Gift Acceptance: Interestingly, the measure authorizes the FTC to accept reimbursement for providing assistance to law enforcement agencies in the U.S. or abroad, and to accept gifts and voluntary services in aid of the agency’s mission and consistent with ethical constraints.

Addressing Expressed Concerns: A previous bill, titled the International Consumer Protection Act of 2003 (S.1234), similarly attempted to expand the powers of the FTC to share information about cross-border fraud but was criticized by privacy advocates. Critics contended that provisions in the bill that reduced privacy safeguards, limited government oversight, and diminished legal safeguards should be removed.

The US SAFE WEB Act appears to have addressed some of these concerns. In the area of governmental oversight, it is interesting to note that the bill requires a detailed report to Congress within three years of its passage. The U.S. SAFE WEB Act also removed a provision which exempted information or material voluntarily provided relevant to possible unfair or deceptive acts or practices from the disclosure requirements of the Freedom of Information Act (“FOIA”). The receipt of foreign information remains exempt from FOIA disclosure.

A Sign of Things to Come? Many observers have speculated that, with the political shift in Congress, we will see enhanced legislative focus on prior issues in the coming years. The new year is already off to an contemplative start in this regard. The same day that President Bush signed to US SAFE WEB Act into law, he also signed the Veterans Benefits, Health Care and Information Technology Act of 2006. This act is a comprehensive measure, which among other key provisions, directs the Veterans Affairs Department to notify veterans promptly in the case of a data breach and to provide fraud alerts, data breach analysis, reports to Congress, credit monitoring and identity theft insurance.

On March 30, 2007, the House of Lords denied an author permission to appeal a ban on her book, the publication of which was stopped on the grounds that it violated the privacy of the main subject.. The publication of “Travels With Loreena McKennitt: My Life As A Friend”, was halted when Loreena McKennitt, a Canadian songwriter and singer known for being particularly protective of her personal privacy, won an injunction, blocking the publication of certain passages in the book on the grounds that the publication of the passages would violate her right to a private life under the European Convention on Human Rights (“ECHR”).

Ms Kennitt was successful in cases brought in the High Court and in the Court of Appeal. Thereafter, Niema Ash, the author of Travels with Loreena, sought permission to appeal the injunction to the House of Lords. In a step hailed by privacy advocates, the House of Lords denied Ash permission to appeal, bringing the end of to a case that marks further evolution on the development of a right to privacy under English law.

Prior to the writing of the book and the resulting dispute, McKennitt and author Ash had been friends and spent a lot of time together. During this time, Ash, apparently, was gathering information for her book, which ultimately exposed a lot of details about conversations that Ash and McKennitt had shared.. McKennitt originally sought an injunction against the publication of the entire book but was unsuccessful. She then narrowed her challenge to particular portions of the book. The passages of Ash’s book that McKennett had challenged contained details about very personal aspects of her life, including her personal relationships, the death of her fiancé, accounts of her emotional vulnerability and a discussion of a property dispute in which she was involved. McKennitt argued that Ash’s book revealed private details about intimate personal matters that she was entitled to keep private.

Ash, on the other hand, contended, that, as she spent a lot of time with McKennitt, the accounts that she had proposed including in her book were as much about her own experiences as they were those of McKennitt. She also pointed to the ECHR, emphasizing the right to freedom of expression that was guaranteed to her by Article 10 of the ECHR.

In ruling in favor of McKennitt, the Court of Appeals maintained that, as the focus of the book was McKennitt and not Ash, the rights of McKennitt must prevail over those of Ash. In denying Ash the right to appeal, the House of Lords appears to have been saying that the Court of Appeals got it right.

Analysts have been watching the case closely, suggesting that it might be a milestone in the development of the right to privacy under English law. The present case was one a few recent trials that have tested the bonds and limits of the concept of a privacy law of this nature, under English law. Traditionally, English law has not recognized a cause of action for breach of privacy. As such, in recent years, famous persons seeking to protect their private lives have sought legal redress by effectively extending the existing tort of breach of confidentiality to accommodate the principle the right to private life as exists in Article 8 of the ECHR. In bringing her case, McKennitt also relied upon this Article.

Other public figures have enjoyed similar successes in reliance upon Article 8 of the ECHR. Prince Charles, for instance, won a case recently preventing the publication of notes he sent to friends relating to the handing over of Hong Kong to China. Also, Michael Douglas and wife Catherine Zeta Jones are presently involved in another case that, when resolved should lead to further clarification of the right to privacy.

It will be interesting to observe how the right to privacy develops hereafter. Privacy advocates are contending that the McKennitt case will have strong implications and are cautioning tabloid editors to take note that courts will protect public figures when they have a reasonable expectation of privacy - just as long as there is not a serious public interest in the content at issue being made public. Others have taken a more restrained approach, contended that this is more of a special case because McKennitt has been especially protective of her own privacy rights and the information that was made public was a result of what she thought were private conversations with whom she thought was a friend. Other celebrities who voluntarily place themselves out in the public eye may be less able to claim that they had a reasonable expectation of privacy, when for example, a reporter writes about their behaviors when out in public venues.