By: Laura Ames
More and more Americans are turning to mobile health and fitness applications, but many worry about the lack of regulations would ensure that developers of these products keep user information secure and private. The Federal Trade Commission (“FTC”) recently addressed this concern with a policy statement (“Statement”) including app developers among the entities who must follow certain notification procedures after security breaches. However, many question the Statement’s practical effects and whether the FTC had the authority to issue it.
Health App Trends
Mobile health and fitness apps have gained popularity in recent years, and the COVID-19 pandemic only accelerated this growth. In fact, the United States led the world in health and fitness app downloads as of October 2020 with 238,330,727 downloads that year alone. Even with this increased usage, a recent poll showed that over 60% of U.S. adults felt at least somewhat concerned regarding the privacy of their health information on mobile apps. These worries appear to be well-founded. Flo Health Inc., the developer of a menstrual cycle and fertility-tracking app, currently faces a consolidated class action alleging the company disclosed users’ health information to third parties without users’ knowledge. This is not an isolated concern. A recent study of over 20,000 health and fitness apps found that a third of these apps could collect user email addresses and more than a third transmitted user data to third parties such as advertisers.
The Original Health Breach Notification Rule
Congress enacted the Health Information Technology for Economic and Clinical Health (“HITECH”) Act as an investment in American health care technology. Subtitle D of this Act delegated authority to the FTC to promulgate breach notification requirements for breaches of unsecured protected health information. In 2009, the FTC issued its Health Breach Notification Rule (“HBNR”) covering vendors of personal health records (“PHR”) and PHR-related entities who experienced a security breach. The HBNR requires these entities to notify affected individuals and the FTC. Crucially, the HITECH Act defines a PHR as an electronic record that can be drawn from multiple sources.
The FTC has never enforced the HBNR, but the possibility for changes to the rule has been on the horizon for some time. In 2020, the FTC requested public comments on the HBNR, which functions as a part of their rulemaking process, saying that it was merely a periodic review of the rule. However, before that comment period ended, the Commission issued a policy statement that turned heads.
The FTC Makes a Bold Move
On September 15, the FTC issued a statement with two of the five Commissioners dissenting. The FTC’s stated goal was to clarify the HBNR and put entities on notice of their security breach obligations. The FTC explained that the HBNR is triggered when “vendors of personal health records that contain individually identifiable health information created or received by health care providers” experience a security breach. The first major revelation was that the FTC considers developers of health apps or connected devices as health care providers because they provide health care services or supplies.
Additionally, the FTC stated that it interprets the rule as covering apps that are capable of drawing information from multiple sources, like through a combination of consumer inputs and application programming interfaces (“APIs”). The statement gave two examples of apps that are covered under this understanding. First, an app that collects information directly from users and has the capacity to draw information through an API that enables syncing with a user’s fitness tracker. Second, an app is implicated if it draws information from multiple sources even if the health information only comes from one source. For example, if a consumer uses a blood sugar monitoring app that draws health data only from that consumer’s inputs but also draws non-health data from the phone’s calendar, that app is covered by the HBNR.
Additionally, the FTC sought to remind entities that a breach is not limited to cybersecurity intrusions but also includes unauthorized access to information. Under this interpretation, companies that share information without a user’s authorization would also be subject to the Rule. Although the FTC had not previously enforced the Rule, this Statement also served as signaling the FTC’s willingness to do so. It mentions that businesses could face potential civil penalties of $43,792 per violation per day.
Obviously, these clarifications could subject many app developers and other companies to the FTC’s rule. However, in the eyes of some, including the two dissenting Commissioners, this statement is not a mere clarification but a fundamental policy change. It could not only lead to potential confusion but could also be a breach of the FTC’s statutory authority and rulemaking process.
Critiques and Larger Questions
Some legal experts argue that this statement represents an expansion of the HBNR that could lead to further confusion for app companies and others. The two dissenting FTC Commissioners go further than potential confusion in their statements.
Commissioner Christine S. Wilson argued that this Statement both short-circuits the FTC’s rulemaking process and also improperly increases its statutory authority by expanding the definitions of terms without legislative approval. Commissioner Noah Joshua Phillips agreed that this statement’s first problem is its issuance in the middle of a request for public comment. Wilson pointed out that the FTC’s own business guidance for dealing with the HBNR directly contradicted the statement by saying that “if consumers can simply input their own” health data on a business’ site, for example, a weekly weight input, then the business is not covered by this rule. Wilson also expressed concerns that this interpretation of “health care provider” was a potentially slippery slope. For instance, does Amazon qualify as a health care provider given that users can purchase Band-Aids and other medical supplies through its phone app?
In the coming months, we might see the FTC forcing app developers to notify customers of data disclosures, but the debate around this statement also reveals larger questions concerning health care at the moment. Fundamental questions that once might have seemed easy to answer, such as who qualifies as a health care provider, are growing murkier. In the wake of COVID-19’s effects on telehealth and health technology in general, it seems unlikely that health care will phase out of this continued intermingling with technology. If that is the case, then legislation and regulations surrounding health care will continue to have to scramble to catch up with this rapid technological evolution.