KKR adds cyber-risk score to its assessment of companies (Bloomberg, 11 April 2014) – How important is cybersecurity to investors? The private equity firm KKR (KKR) just provided its own answer to that, adding a cyber-risk score to its assessment of the companies in its portfolio. About a year ago, KKR officials decided they needed to find a way to understand the current state of security at the companies they were invested in, as Chief Information Office Ed Brandman tells it. That goal might sound simple, but how to get there wasn’t obvious for a diverse set of 90 companies across a range of industries and regions. KKR worked with BitSight Technologies to come up with what amounts to a credit score for cyber risk. BitSight, based in Cambridge, Mass., collects Internet traffic flowing to and from tens of thousands of companies. Its staff members analyze risky behavior, such as communications with spam networks or servers known to be controlled by hackers and cybercriminals, to come up with a score for cyber risk on a scale from 250 (worst) to 900 (best). Subscribers to the service use it to help assess the security at third parties with whom they may share sensitive data and to benchmark their own performance, says Stephen Boyer, chief technology officer at BitSight. Bitsight did the same for 70 of KKR’s private equity holdings-excluding some in the portfolio that KKR was about to sell or had just bought.

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Article 29 WP Opinion on anonymization (Opinion 05/2140, 10 April 2014) – (from Executive Summary): In this Opinion, the WP analyses the effectiveness and limits of existing anonymisation techniques against the EU legal background of data protection and provides recommendations to handle these techniques by taking account of the residual risk of identification inherent in each of them. The WP acknowledges the potential value of anonymisation in particular as a strategy to reap the benefits of ‘open data’ for individuals and society at large whilst mitigating the risks for the individuals concerned. However, case studies and research publications have shown how difficult it is to create a truly anonymous dataset whilst retaining as much of the underlying information as required for the task. In the light of Directive 95/46/EC and other relevant EU legal instruments, anonymisation results from processing personal data in order to irreversibly prevent identification. In doing so, several elements should be taken into account by data controllers, having regard to all the means “likely reasonably” to be used for identification (either by the controller or by any third party). * * *

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Cities reluctant to reveal whether they’re using fake cell tower devices (ArsTechnica, 25 March 2014) – For some time now, the American Civil Liberties Union (ACLU) has been on a quest to better understand the use and legality of “stingrays.” These devices, which are also known as international mobile subscriber identity (IMSI) catchers, or fake cell towers, can be used to track phones or, in some cases, intercept calls and text messages. The “Stingray” itself is a trademarked product manufactured by a Florida-based company, the Harris Corporation. (It has since come to be used as a generic term, like Xerox or Kleenex.) Harris is notoriously secretive about the capabilities of its devices and generally won’t talk to the press about their capabilities or deployments. Earlier in March, the ACLU filed a motion for public access request , requesting documents and information related to stingray use by nearly 30 Florida police and sheriff’s departments. Among the responses published for the first time on Tuesday was the curious reply from the city of Sunrise, Florida, a town of about 88,000 people, just northwest of Miami. Through its lawyers, Sunrise officially denied the request , noting that the city would neither confirm nor deny “whether any records responsive to the Request exist and, if any responsive records do exist, cannot and will not public disclose those records.” (In a footnote, the lawyers also cited this Ars story from September 2013 detailing stingrays and other related surveillance devices.) The ACLU published its response to the city’s denial on Tuesday. As the ACLU points out in a Tuesday blog post , the city of Sunrise has already published an invoice from Harris on its own website dated March 13, 2013, showing that the city paid over $65,000 for a stingray. That document clearly states, in all-caps on each page, that “disclosure of this document and the information it contains are strictly prohibited by Federal Law.”

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Court rules that kids can be bound by Facebook’s member agreement (Venkat Balasubramani, 4 April 2014) – The status of kids’ ability to form contracts via online terms of service was somewhat uncertain over the last several years, with a few Facebook-related rulings raising questions. A group of minor plaintiffs who opted out of the Fraley v. Facebook Sponsored Stories settlement brought suit for violation of their publicity rights under an Illinois statute. A recent ruling shuts out their claims, and gives some clarity to the online contracting landscape for minors. The key question in front of Judge Seeborg was whether the contract at issue between minors and Facebook – essentially granting a publicity rights release—was one of the narrow types of contracts with minors that were void, or if the contract was merely voidable under California Family Code 6701, et seq. * * * With the caveat that this is just a district court ruling, and plaintiffs will continue to attack these terms in far-flung jurisdictions, this is a very helpful ruling for Facebook in that it removes some uncertainty as to a big category of potentially lucrative users: users who are old enough to not pose COPPA-problems but those who haven’t yet reached the age of majority. Networks for the most part took a don’t-ask/don’t-tell type of approach with this group, but were hesitant to enter into deeper economic and legally uncertain relationships.

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Law firms are pressed on security for data (NYT, 26 March 2014) – A growing number of big corporate clients are demanding that their law firms take more steps to guard against online intrusions that could compromise sensitive information as global concerns about hacker threats mount. Wall Street banks are pressing outside law firms to demonstrate that their computer systems are employing top-tier technologies to detect and deter attacks from hackers bent on getting their hands on corporate secrets either for their own use or sale to others, said people briefed on the matter who spoke on the condition of anonymity. Some financial institutions are asking law firms to fill out lengthy 60-page questionnaires detailing their cybersecurity measures, while others are doing on-site inspections. In some cases, banks and companies are threatening to withhold legal work from law firms that balk at the increased scrutiny or requesting that firms add insurance coverage for data breaches to their malpractice policies. The vulnerability of American law firms to online attacks is a particular concern to law enforcement agencies because the firms are a rich repository of corporate secrets, business strategies and intellectual property. One concern is the potential for hackers to access information about potential corporate deals before they get announced. Law enforcement has long worried that law firms are not doing enough to guard against intrusions by hackers. Despite the concern, it’s hard to gauge just how vulnerable law firms are to attacks from hackers. There are few rules requiring firms to make public any breaches, and because the firms have little direct interaction with consumers, there is no need for them to publicly report a hacking incident the way a bank or a retailer would. In 2012, Mandiant, a security consulting firm, put out a report estimating that 80 percent of the 100 largest American law firms had some malicious computer breach in 2011. Actual reports of confidential information hacked from a law firm computer system and later winding up on some overseas server are rare, however. Representatives for several large law firms, all of whom declined to discuss the topic publicly, said privately that the threat assessments from the F.B.I. and consulting firms were overstated. The law firm representatives said hacker attacks were usually email “phishing” schemes seeking to access personal information or account passwords, the kind of intrusions that have become commonplace and are easily contained. But Vincent I. Polley, a lawyer and co-author of recent book for the American Bar Association on cybersecurity, said many law firms were not even aware they had been hacked. He said a lot of law firm managers were in denial about the potential threat. “A lot of firms have been hacked, and like most entities that are hacked, they don’t know that for some period of time,” said Mr. Polley. “Sometimes, it may not be discovered for a minute or months and even years.” [ Polley : The referenced book is “The ABA Cybersecurity Handbook: A Resource for Attorneys, Law Firms and Business Professionals”, available here .]

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Nature publishing group requires faculty authors to waive ‘moral rights’ (Chronicle of Higher Ed, 31 March 2014) – Faculty authors who contract to write for the publisher of Nature, Scientific American, and many other journals should know that they could be signing away more than just the economic rights to their work, according to the director of the Office of Copyright and Scholarly Communication at Duke University. Kevin Smith, the Duke official, said he stumbled across a clause in the Nature Publishing Group’s license agreement last week that states that authors waive or agree not to assert “any and all moral rights they may now or in the future hold” related to their work. In the context of scholarly publishing, “moral rights” include the right of the author always to have his or her name associated with the work and the right to have the integrity of the work protected such that it is not changed in a way that could result in reputational harm. “In many countries, you can’t waive them as an author,” Mr. Smith said. “But in the Nature publishing agreement you are required to waive them, and if you are in a country where a waiver is not allowed, you have to assert in the contract you won’t insist on those rights.” Mr. Smith first questioned the details of the Nature Publishing Group’s license agreement on his blog on Thursday. Calling the moral-rights stipulation “bizarre” and an attack “on core academic values,” he wrote that in some countries authors are forbidden to waive those rights. “The United States is something of an outlier in that we do not have a formal recognition of moral rights in our copyright law, although we always assert that these values are protected by other laws,” he wrote. His comments were part of a longer post noting that the powerful scholarly publisher has apparently begun enforcing at Duke a requirement that authors at institutions with open-access policies secure waivers exempting their work from those policies.

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