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What's Next

Future + Law

Ian Lopez

Aug 22, 2018

Hey there What’s Next readers! Hope you’re keeping afloat amid the wave of legal news this week (read: Manafort). We’ve got you covered in terms of tech, with a deeper look at how your cell phone swipes and taps could be the next big thing in biometrics law. Also on deck is a debate over using crypto to make bail. And Facebook faces its "Apple" moment.

Tips? Get at me on Twitter @IanMichaelLopez or email at ilopez@alm.com.

Touch ID: Are Screen Motions the Next Big Thing in Biometrics Litigation?

Last week we touched on how banks and retailers are using biometric tech to monitor every scroll, tap and entry on phone screens and keyboards to secure their web users, often without the user having the slightest idea. This got me thinking — are privacy-minded plaintiffs attorneys going to find a way to go after this? And, if so, how?

To get a read on this, I dialed Chris Dore, an Edleson PC partner who focuses on biometrics laws. He notes that a 2017 California privacy law “references something along the lines of behavioral metrics,” while Illinois’ biometrics law — “the strongest in the books right now” — “specifically enumerates certain things that are biometric information.” And scrolling, swiping and such, he says, “would not be among them.”

“Even though this is being discussed as biometrics, it’s an evolution of that term,” Dore said. “It’s an evolving concept of what characteristics can be used to identify a person.”

This isn’t to say consumers are left without avenues of legal recourse if they feel the technology is impinging on their privacy. Dore notes “broader common law claims" could be used to curb unwanted collection. Plus, “in instances in which people are taking steps to protect their identity online” and a website continues to clandestinely collect their data, one might make a claim of deceptive conduct.

“I’ve gone to this website, I haven’t created an account, I’m incognito mode to [dodge] cookies, have taken all these steps, yet this site is still using technology that I’m unaware of with my personal information that it acquired without my consent,” Dore said, positing a hypothetical scenario. He later added, “If [collection] technology is being used without your knowledge and permission, then depending on the particular circumstances, that could be deemed deceptive conduct.”

➤ Takeaway: This technology sets up an unusual clash between privacy and cybersecurity — usually thought of as going hand-in-hand. It's hard to say just yet how that will play with consumers, or in the courts.

Photo: franz12/Shutterstock.com

 

On the Radar: Three Things to Know

To Break or Not to Break. That is the question brought before a California federal court by the U.S. government as it tries to push Facebook to break encryption on its Messenger App. At stake is whether the court can compel a private entity to tweak its products to offer the government a line for surveillance. Sound familiar? It’s essentially the core issue of the government’s fight with Apple to decrypt iPhones used by the San Bernardino shooters. Now, the DOJ and Facebook are keeping tight-lipped about the case as it proceeds under seal, though sources told Reuters that the presiding judge last week heard arguments on a government motion to hold the tech company in contempt for flat out refusal to abide by surveillance requests.

➤ Unfriendly. That’s not to say Facebook is the darling of user protection. The federal government gave its two cents on the topic, weighing in on a lawsuit brought against the social media company by housing groups accusing it of allowing advertisers to use ad targeting tools to limit audiences. The government's comments came in the form of a letter to the court, in which U.S. Attorney Geoffrey Berman for the Southern District of New York doubles down on the government’s “strong interest” in the case. The government also filed an administrative complaint from the Department of Housing and Urban Development.

➤ Crypto Culprits. Think you had a rough week? Try telling that to the guy who lost $24 million in cryptocurrency. Clearly, he’s pretty upset, and he’s aiming to hold AT&T accountable with a suit seeking some $224 million. In a case filed in U.S. District Court for the Central District of California, lawyers for cryptocurrency investor Michael Terpin allege he lost his digital dollars at the hands of fraudsters via a “SIM swap”— where scam artists get access to a number, then convince a telecom employee to load it on a SIM card. That's like a key to the city for hackers trying to access a victim’s accounts. He Tweeted last week:

 

Protocol: Out on Bail, Courtesy of Bitcoin?

Crypto advocates may not have had bail bonds in mind when thinking of the technology’s potential for innovation, but a Silicon Valley judge seems to have. U.S. Magistrate Judge Jacqueline Corley of the Northern District of California last week ordered an Italian citizen alleged to have hacked EA Sports to post a bond of $750,000 in cryptocurrency.

Interesting, right? Except the government isn’t having it. As U.S. Attorney Alex G. Tse writes in a court document, the FBI isn’t taking “cryptocurrency as a bond due to liability issues.” And it’s not just being difficult for the sake of it — Tse writes that “neither the Clerk of the Court or the United States Marshals Services has the ability to maintain digital assets as a bond.”

To be certain, the outcome of this snafu over crypto as bail is far from clear — some court documents are currently sealed. But it does underscore the government’s struggle to handle cryptocurrency. In the context of this case, NewsBTC reports the defendant planned on trading altcoins for bail, sparking government concerns that “selling a large stash of lightly traded coins could have caused severe fluctuations in their prices.”

That’s not to say the government didn’t try. NewsBTC also notes the government “reversed course” only after trying to “create a cryptocurrency wallet to facilitate the transfer.” Using audio obtained by MarketWatch of an August 13th hearing, NewsBTC reports Assistant U.S. Attorney Susan Knight said: “I had extended conversations with [the FBI's] district counsel and they refused to accept it, to have it as part of a bond and part of forfeiture.”

But why cryptocurrency? Engadget's Jon Fingas has an insightful take, writing that “to some extent, the cryptocurrency option might have been necessary.” Simply put, this is because the defendant, an Italian citizen, “wasn’t swimming in U.S. funds, in other words — this gave him an incentive to show up in court.”

Takeaway. This hacking case presents an interesting glimpse at how, despite some courts trying to work crypto payments into the judicial fabric, digital tokens may still have a way to come before being acceptable legal tender.

 

That’s it for this week! Stay tuned for What's Next!

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