On Might 17, 2023, the Federal Commerce Fee (“FTC”) introduced an enforcement motion (“Enforcement Motion”) towards Illinois-based Simple Healthcare Company (“Simple Healthcare”), which operates the Premom software, for allegedly violating Part 5 of the FTC Act and the Well being Breach Notification Rule (“HBNR”). Simple Healthcare has developed, marketed, and distributed a cell software known as the Premom Ovulation Tracker (“Premom”) that enables customers to enter and observe numerous sorts of private and well being info. Within the criticism (“Criticism”), the FTC alleges that Simple Healthcare deceived customers by disclosing customers’ delicate well being information with third events and did not notify customers of those unauthorized disclosures in violation of the HBNR. The proposed order (“Proposed Order”), which was introduced by the U.S. Division of Justice on behalf of the FTC, imposes a civil penalty of $100,000 and prohibits Simple Healthcare from sharing person private well being information with third events for promoting, amongst different necessities. As a part of a associated motion, Simple Healthcare has agreed to pay a further $100,000 to Connecticut, the District of Columbia, and Oregon for violating their respective legal guidelines.
The newest enforcement motion towards Premom follows latest FTC actions towards GoodRx Holdings, Inc. for violating Part 5 of the FTC Act and the HBNR and BetterHelp, Inc. for violating Part 5 of the FTC Act, which seems to be half of a bigger effort by the FTC to watch the practices of internet sites, apps, and linked units that seize shopper’s delicate well being info. The motion additionally indicators the FTC’s highlight on firms’ use of reproductive well being information, notably in menstrual cycle and fertility functions, within the wake of the Dobbs v. Jackson Girls’s Well being Group (“Dobbs”) determination.
The Criticism
In accordance with the Criticism, the FTC alleges that, between 2017 and 2020, Simple Healthcare repeatedly and falsely promised Premom customers in in its privateness insurance policies that (1) it might not share well being info with third events with out customers’ data or consent; (2) to the extent that the corporate collected and shared any info, it was non-identifiable information, and that its use of third-party analytics software program recognized a person solely by IP tackle; and (3) the corporate would solely use such information for its personal analytics or promoting. The FTC states that Simple Healthcare’s privateness insurance policies over time promised customers that it might notify and procure consent from customers earlier than utilizing its customers’ information for every other functions.
The FTC alleges that Simple Healthcare shared Premom customers’ identifiable well being info by means of “Customized App Occasions” to 3rd events. In accordance with the Criticism, Simple Healthcare integrated into the Premom app software program growth instruments, often known as software program growth kits (“SDKs”), which allowed Simple Healthcare to trace and analyze Premom customers’ interactions with Premom and switch its app customers’ information—together with information about customers’ fertility and pregnancies—to the writer of every SDK. The Criticism states that Simple Healthcare gave these firms (together with third-party advertising and analytics companies, a few of which had been overseas firms) broad latitude to make use of such information as they noticed match by agreeing to their customary phrases of service.
The FTC additionally alleges that Simple Healthcare did not implement affordable privateness and information safety measures, together with failing to adequately assess the privateness dangers of third-party SDKs that had been integrated into Premom, failing to watch modifications within the privateness insurance policies and phrases and situations of the SDK publishers, and failing to have interaction in audits or compliance critiques concerning the info assortment and privateness practices of third-party publishers. The FTC additionally discovered that Simple Healthcare did not implement compliance with their very own privateness guarantees to customers.
The Proposed Order
The Proposed Order states that Simple Healthcare should pay a civil penalty of $100,000 to the federal authorities. Along with the civil penalty, the Proposed Order prohibits Simple Healthcare from partaking in sure practices, requires it to inform people as required below the HBNR, and requires it to have interaction in numerous actions designed to bolster its compliance program. Particularly, the Proposed Order contains the next prohibitions and necessities:
- Completely prohibits Simple Healthcare from sharing customers’ private well being information with third events for promoting;
- Requires Simple Healthcare to acquire person consent earlier than sharing private well being information with third events for different functions;
- Requires Simple Healthcare to retain customers’ private info for less than so long as obligatory to satisfy the aim for which it was collected;
- Prohibits Simple Healthcare from making future misrepresentations about its privateness practices;
- Requires Simple Healthcare to adjust to the HBNR’s notification necessities for any future breach of safety;
- Requires Simple Healthcare to hunt deletion of information it has shared with third events;
- Requires Simple Healthcare to ship and put up a shopper discover explaining the FTC’s allegations and the settlement; and
- Requires Simple Healthcare to implement complete safety and privateness packages that embody sturdy safeguards to guard shopper information.
Takeaways
As mentioned in a previous consumer alert, the FTC issued a coverage assertion in September 2021 to affirm that well being apps and linked units that gather or use customers’ well being info should adjust to the HBNR. Along with the coverage assertion, which seems to have considerably expanded the HBNR’s scope, the FTC not too long ago introduced that it might be in search of touch upon proposed modifications to the HBNR that embody clarifying the rule’s applicability to well being apps and different related applied sciences.
Furthermore, the Administration and the FTC have elevated scrutiny on firms that share delicate reproductive well being info within the wake of the Dobbs determination final spring reversing the constitutional proper to abortion. For the reason that launch of the Dobbs determination, the Administration has labored to bolster protections for delicate well being information associated to reproductive well being care by means of a mix of regulation enforcement and coverage initiatives, together with a earlier FTC enforcement motion towards Flo Well being Inc., the developer of a fertility monitoring app, along with dedication from the FTC to guard customers from firms that misuse reproductive well being information.
Digital well being firms and different organizations throughout the well being care business ought to be aware of latest enforcement actions, consider whether or not the HBNR applies to their enterprise, assessment and replace insurance policies and compliance with FTC requirement, and proceed to watch FTC enforcement actions and different developments concerning the HBNR. That is notably necessary for firms that concentrate on ladies’s well being.
For extra info or recommendation concerning the applicability of the Enforcement Motion to your group, please contact the skilled(s) listed beneath or your common Crowell & Moring contact.
