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Thursday, June 24, 2010

FTC Announces Settlement with Twitter and Article 29 Working Party Issues Opinion on Behavioral Advertising

By Mehmet Munur

Today, the FTC announced its settlement with Twitter on the charges relating to the 2009 security breach involving the comprise of a Twitter employee’s account. The FTC settlement specifically highlighted Twitter’s failure to put in place common sense security procedures, such as hard to guess passwords, expiring passwords, and restricting administrative controls to only employees that needed them. Under the settlement, Twitter will be barred from making misleading statements on security, privacy, and confidentiality of information for 20 years and it will need to go through biennial third-party security audits for 10 years. You may read more about the settlement from the FTC website.

Unrelated to the FTC settlement, the Article 29 Working Party released an opinion on behavioral advertising. A29WP reiterated that the behavioral advertisers and the cookies or other devices they used were governed by Article 5(3) of the E-Privacy Directive. The use of such devices and any information that may be deemed personal information will also be governed by the Data Protection Directive. Thus, the A29WP pushed for opt-in consent for the use of such technology. Additionally, the opinion stated that “to keep data subjects aware of the monitoring, ad network providers should: i) limit in time the scope of the consent; ii) offer the possibility to revoke it easily and iii), create visible tools to be displayed where the monitoring takes place.” The A29WP is also soliciting comments as to the ways of achieving opt-in consent without burdening web users with too many notices. You may read the full text of the opinion here.


Sunday, June 20, 2010

Supreme Court Reverses 9th Circuit on the Employee Electronic Communications Case

by Mehmet Munur

On June 17, 2010, the Supreme Court of the United States held in a unanimous opinion that the unauthorized search of a state employee’s text messages on his employer provided text-messaging pager did not violate the employee’s Fourth Amendment rights. The Supreme Court reversed the 9th Circuit, which we had previously blogged. However, the Supreme Court decision was very narrow, assuming instead of deciding whether the employee’s expectation of privacy was reasonable. Nevertheless, the Court still highlighted the importance of clear communication of employee policies as well as their consistent implementation.

The case arose from Ontario Police Department’s review of text messages by a member of its SWAT team, Jeff Quon. The Police Department provided its employees with two-way text messaging pagers in order to make it more efficient for dispatchers. When Officer Quon and others went over the allotted character limit, they paid for their overage charges. An understanding formed between the employees and their supervisors that the employees would have to pay the charges unless they wanted their text messages audited to determine whether the use was personal or business related. Then, Lieutenant Duke got tired of collecting bills and decided that the text messages should be audited to determine whether they were being used for business or personal use. A review of the transcripts by the city officials showed that some of the text messages were personal. This resulted in an internal investigation to determine whether the pagers were being used during work hours for personal use.

As a result of this investigation, Sergeant Quon and four other officers filed a complaint against the Chief of Police, the City of Ontario, and Arch Wireless under the Stored Communication Act (“SCA”) and the Fourth Amendment, among others. The 9th Circuit reversed the district court on the SCA claim. The Supreme Court reversed the 9th Circuit.

The Supreme Court started out with the discussion of the 4th Amendment jurisprudence, including the case of O’Connor v. Ortega, where the Court had discussed the importance of considering the operational realities of the workplace in determining the reasonableness of the expectation of privacy. However, instead of expanding on the O’Connor case, the Court simply assumed that Officer Quon had a reasonable expectation of privacy. This approach was likely due to the politics of the Court and the difficulty of obtaining a unanimous decision, their difficulty in understanding the technology, and their hesitation to make laws based on passing technologies. This is clear in the following section of the opinion:

The Court must proceed with care when considering the whole concept of privacy expectations in communications made on electronic equipment owned by a government employer. The judiciary risks error by elaborating too fully on the Fourth Amendment implications of emerging technology before its role in society has become clear. In Katz, the Court relied on its own knowledge and experience to conclude that there is a reasonable expectation of privacy in a telephone booth. It is not so clear that courts at present are on so sure a ground. Prudence counsels caution before the facts in the instant case are used to establish far-reaching premises that define the existence, and extent, of privacy expectations enjoyed by employees when using employer-provided communication devices.

Rapid changes in the dynamics of communication and information transmission are evident not just in the technology itself but in what society accepts as proper behavior. As one amici brief notes, many employers expect or at least tolerate personal use of such equipment by employees because it often increases worker efficiency. Another amicus points out that the law is beginning to respond to these developments, as some States have recently passed statutes requiring employers to notify employees when monitoring their electronic communications. At present, it is uncertain how workplace norms, and the law’s treatment of them, will evolve.

Even if the Court were certain that the O’Connor plurality’s approach were the right one, the Court would have difficulty predicting how employees’ privacy expectations will be shaped by those changes or the degree to which society will be prepared to recognize those expectations as reasonable. Cell phone and text message communications are so pervasive that some persons may consider them to be essential means or necessary instruments for self-expression, even self identification. . . .

A broad holding concerning employees’ privacy expectations vis-à-vis employer-provided technological equipment might have implications for future cases that cannot be predicted.
Citations omitted.

While the Supreme Court declined to decide on the law’s treatment of workplace norms and the use of technology, it still highlighted the important intersection of technology, workplace policies, and their administration in the following sentence:
employer policies concerning communications will of course shape the reasonable expectations of their employees, especially to the extent that such policies are clearly communicated.
Therefore, despite the narrow holding, the Court recognizes that employers cannot expect to write policies that decrease the expectations of privacy, then act in contradictory ways to increase these expectations, and still expect to end up with decreased expectations of privacy in the workplace. Thus, it is crucial that employers, whether government or private, draft clear policies on the use of technology for personal reasons, communicate them clearly, and execute them consistently.

The Court then moved onto the O’Connor criteria and held that Fourth Amendment was not violated. “The search was justified at its inception because there were “reasonable grounds for suspecting that the search [was] necessary for a noninvestigatory work-related purpose.” Due to the costs involved in using the pagers, the city of Ontario had a legitimate interest in conducting the search. “As for the scope of the search, reviewing the transcripts was reasonable because it was an efficient and expedient way to determine whether Officer Quon’s overages were the result of work-related messaging or personal use.” Therefore, the search was reasonable under the O’Connor plurality.

The case is City of Ontario v. Quon, No. 08–1332 (U.S. June 17, 2010).