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Financial Services Law Insights and Observations


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  • FTC, HHS say tracking technology may impermissibly disclose personal health data

    Privacy, Cyber Risk & Data Security

    On July 20, the FTC and U.S. Department of Health and Human Services for Civil Rights issued a joint letter cautioning hospitals and telehealth providers of the risks related to the use of online tracking technologies within their systems that may impermissibly disclose consumers’ personal data to third parties. Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, said “when consumers visit a hospital’s website or seek telehealth services, they should not have to worry that their most private and sensitive health information may be disclosed to advertisers and other unnamed, hidden third parties.” According to the letter, recent research has highlighted concerns about the use of technology to track users’ online activities and sensitive data including, health conditions, diagnoses, medications, medical treatments, frequency of visits to health care professionals, and where an individual seeks medical treatment. The FTC warned that the impermissible disclosures of personal data can result in identity theft, financial loss, discrimination, and more. The letter included a reminder that under the FTC Act and the FTC Health Breach Notification Rule, even if they are not covered by HIPAA, hospitals and telehealth providers remain obligated to protect against impermissible disclosures of personal health information.

    Privacy, Cyber Risk & Data Security Federal Issues FTC FTC Act Consumer Protection Health Breach Notification Rule Department of Health and Human Services

  • FTC, DOJ sue maker of health app over data sharing

    Federal Issues

    On May 17, the DOJ filed a complaint on behalf of the FTC against a health app for violating the Health Breach Notification Rule (HBNR) by allegedly sharing users’ sensitive personal information with third parties, disclosing sensitive health data, and failing to notify users of these unauthorized disclosures. According to the complaint, users were allegedly repeatedly and falsely promised via privacy policies that their health information would not be shared with third parties without the user’s knowledge or consent, and that any collected data was non-identifiable and only used for the defendant’s own analytics or advertising. The FTC charged the defendant with failing to implement reasonable measures to address the privacy and data security risks created by its use of third-party automated tracking tools and for sharing health information used for advertising purposes without obtaining users’ affirmative express consent. Under the HBNR, companies with access to personal health records are required to notify users, the FTC, and media outlets in certain situations, if there has been an unauthorized acquisition of unsecured personal health information. The defendant also allegedly failed to impose limits on how third parties could use the data and failed to adequately encrypt data shared with third parties, thus subjecting the data to potential interception and/or seizure by bad actors.

    The proposed court order would require the defendant to pay a $100,000 civil penalty, and would permanently prohibit the company from sharing personal health data with third parties for advertising and from making future misrepresentations about its privacy practices. The defendant would also be required to (i) obtain user consent before sharing personal health data; (ii) limit data retention; (iii) request deletion of data shared with third parties; (iv) provide notices to users explaining the FTC’s allegations and the proposed settlement; and (v) implement comprehensive security and privacy programs to protect consumer data. The defendant has also agreed to pay a total of $100,000 to Connecticut, the District of Columbia, and Oregon (who collaborated with the FTC on the action) for violating state privacy laws with respect to its data sharing and privacy practices.

    Federal Issues Privacy, Cyber Risk & Data Security FTC DOJ Consumer Protection Health Breach Notification Rule Enforcement Connecticut District of Columbia Oregon

  • FTC bans health vendor from sharing consumer info with advertiser

    Federal Issues

    On February 1, the DOJ filed a complaint on behalf of the FTC against a telehealth and prescription drug discount provider for allegedly violating the FTC Act and the Health Breach Notification Rule by failing to notify consumers that it was disclosing their personal health information to third parties for advertising purposes. As a vendor of personal health records, the FTC stated that the company is required to comply with the Health Breach Notification Rule, which imposes certain reporting obligations on health apps and other companies that collect or use consumers’ health information (previously covered by InfoBytes here).

    According to the complaint filed in the U.S. District Court for the Northern District of California, the company—which allows users to keep track of their personal health information, including saving, tracking, and receiving prescription alerts—shared sensitive personal health information with advertisers and other third parties for years, even though it allegedly promised users that their health information would never be shared. The FTC maintained that the company also monetized users’ personal health information and used certain shared data to target its own users with personalized health- and medication-specific advertisement on various social media platforms. The company also allegedly: (i) permitted third parties to use shared data for their own internal purposes; (ii) falsely claimed compliance with the Digital Advertising Alliance principles (which requires companies to obtain consent prior to using health information for advertising purposes); (iii) misrepresented its HIPAA compliance; (iv) failed to maintain sufficient formal, written, or standard privacy or data sharing policies or procedures to protect personal health information; and (v) failed to report the unauthorized disclosures.

    Under the terms of the proposed court order filed by the DOJ, the company would be required to pay a $1.5 million civil penalty, and would be prohibited from engaging in the identified alleged deceptive practices and from sharing personal health information with third parties for advertising purposes. The company would also be required to implement several measures to address the identified violations, including obtaining users’ affirmative consent before disclosing information to third parties (the company would be prohibited from using “dark patterns,” or manipulative designs, to obtain consent), directing third parties to delete shared data, notifying users about the breaches and the FTC’s enforcement action, implementing a data retention schedule, and putting in place a comprehensive privacy program to safeguard consumer data.

    Federal Issues FTC Enforcement Privacy, Cyber Risk & Data Security Advertisement Consumer Protection FTC Act Health Breach Notification Rule Dark Patterns

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