On Could 17, 2023, the Federal Commerce Fee (“FTC”) introduced an enforcement motion (“Enforcement Motion”) in opposition to Illinois-based Straightforward Healthcare Company (“Straightforward Healthcare”), which operates the Premom software, for allegedly violating Part 5 of the FTC Act and the Well being Breach Notification Rule (“HBNR”). Straightforward Healthcare has developed, marketed, and distributed a cellular software referred to as the Premom Ovulation Tracker (“Premom”) that enables customers to enter and monitor numerous varieties of private and well being info. Within the grievance (“Criticism”), the FTC alleges that Straightforward 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 Straightforward Healthcare from sharing person private well being information with third events for promoting, amongst different necessities. As a part of a associated motion, Straightforward Healthcare has agreed to pay an extra $100,000 to Connecticut, the District of Columbia, and Oregon for violating their respective legal guidelines.

The newest enforcement motion in opposition to Premom follows current FTC actions in opposition to 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 gadgets that seize shopper’s delicate well being info. The motion additionally indicators the FTC’s highlight on corporations’ use of reproductive well being information, notably in menstrual cycle and fertility purposes, within the wake of the Dobbs v. Jackson Ladies’s Well being Group (“Dobbs”) resolution.

The Criticism

Based on the Criticism, the FTC alleges that, between 2017 and 2020, Straightforward 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’ information 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 Straightforward Healthcare’s privateness insurance policies over time promised customers that it might notify and acquire consent from customers earlier than utilizing its customers’ information for another functions.

The FTC alleges that Straightforward Healthcare shared Premom customers’ identifiable well being info by way of “Customized App Occasions” to 3rd events. Based on the Criticism, Straightforward Healthcare integrated into the Premom app software program growth instruments, generally known as software program growth kits (“SDKs”),  which allowed Straightforward 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 Straightforward Healthcare gave these corporations (together with third-party advertising and analytics companies, a few of which had been international corporations) broad latitude to make use of such information as they noticed match by agreeing to their normal phrases of service.

The FTC additionally alleges that Straightforward Healthcare did not implement cheap 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 adjustments within the privateness insurance policies and phrases and situations of the SDK publishers, and failing to interact in audits or compliance evaluations relating to the information assortment and privateness practices of third-party publishers. The FTC additionally discovered that Straightforward Healthcare did not implement compliance with their very own privateness guarantees to customers.

The Proposed Order

The Proposed Order states that Straightforward Healthcare should pay a civil penalty of $100,000 to the federal authorities. Along with the civil penalty, the Proposed Order prohibits Straightforward Healthcare from participating in sure practices, requires it to inform people as required below the HBNR, and requires it to interact in numerous actions designed to bolster its compliance program. Particularly, the Proposed Order consists of the next prohibitions and necessities:

• Completely prohibits Straightforward Healthcare from sharing customers’ private well being information with third events for promoting;
• Requires Straightforward Healthcare to acquire person consent earlier than sharing private well being information with third events for different functions;
• Requires Straightforward Healthcare to retain customers’ private info for under so long as vital to satisfy the aim for which it was collected;
• Prohibits Straightforward Healthcare from making future misrepresentations about its privateness practices;
• Requires Straightforward Healthcare to adjust to the HBNR’s notification necessities for any future breach of safety;
• Requires Straightforward Healthcare to hunt deletion of information it has shared with third events;
• Requires Straightforward Healthcare to ship and submit a shopper discover explaining the FTC’s allegations and the settlement; and
• Requires Straightforward Healthcare to implement complete safety and privateness packages that embrace 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 gadgets 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 lately introduced that it might be searching for touch upon proposed adjustments to the HBNR that embrace clarifying the rule’s applicability to well being apps and different comparable applied sciences.

Furthermore, the Administration and the FTC have elevated scrutiny on corporations that share delicate reproductive well being info within the wake of the Dobbs resolution final spring reversing the constitutional proper to abortion. For the reason that launch of the Dobbs resolution, the Administration has labored to bolster protections for delicate well being information associated to reproductive well being care by way of a mixture of regulation enforcement and coverage initiatives, together with a earlier FTC enforcement motion in opposition to Flo Well being Inc., the developer of a fertility monitoring app, along with dedication from the FTC to guard customers from corporations that misuse reproductive well being information.

Digital well being corporations and different organizations throughout the well being care business ought to pay attention to current enforcement actions, consider whether or not the HBNR applies to their enterprise, evaluate and replace insurance policies and compliance with FTC requirement, and proceed to watch FTC enforcement actions and different developments relating to the HBNR. That is notably necessary for corporations that target girls’s well being.

For extra info or recommendation relating to the applicability of the Enforcement Motion to your group, please contact the skilled(s) listed under or your common Crowell & Moring contact.