FTC Broadcasts Enforcement Motion In opposition to Ovulation Monitoring App Premom

On Might 17, 2023, the Federal Commerce Fee (“FTC”) announced an enforcement motion (“Enforcement Motion”) in opposition to Illinois-based Straightforward Healthcare Company (“Straightforward Healthcare”), which operates the Premom utility, 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 utility referred to as the Premom Ovulation Tracker (“Premom”) that permits customers to enter and observe varied kinds of private and well being info. Within the grievance (“Criticism”), the FTC alleges that Straightforward Healthcare deceived customers by disclosing customers’ delicate well being knowledge with third events and did not notify shoppers 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 knowledge 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 Connecticutthe District of Columbiaand Oregon for violating their respective legal guidelines.

The newest enforcement motion in opposition to Premom follows latest 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 observe the practices of internet sites, apps, and related gadgets that seize shopper’s delicate well being info. The motion additionally alerts the FTC’s highlight on firms’ use of reproductive well being knowledge, notably in menstrual cycle and fertility purposes, within the wake of the Dobbs v. Jackson Girls’s Well being Group (“Dobbs”) determination.

The Criticism

Based on the Complaintthe 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’ data or consent; (2) to the extent that the corporate collected and shared any info, it was non-identifiable knowledge, and that its use of third-party analytics software program recognized a person solely by IP handle; and (3) the corporate would solely use such knowledge for its personal analytics or promoting. The FTC states that Straightforward Healthcare’s privateness insurance policies over time promised shoppers that it might notify and procure consent from customers earlier than utilizing its customers’ knowledge for some other functions.

The FTC alleges that Straightforward Healthcare shared Premom customers’ identifiable well being info by means of “Customized App Occasions” to 3rd events. Based on the Criticism, Straightforward Healthcare integrated into the Premom app software program growth instruments, referred to as software program growth kits (“SDKs”),  which allowed Straightforward Healthcare to trace and analyze Premom customers’ interactions with Premom and switch its app customers’ knowledge—together with knowledge about customers’ fertility and pregnancies—to the writer of every SDK. The Criticism states that Straightforward Healthcare gave these firms (together with third-party advertising and marketing and analytics corporations, a few of which had been overseas firms) broad latitude to make use of such knowledge as they noticed match by agreeing to their commonplace phrases of service.

The FTC additionally alleges that Straightforward Healthcare did not implement affordable privateness and knowledge safety measures, together with failing to adequately assess the privateness dangers of third-party SDKs that had been integrated into Premom, failing to observe modifications within the privateness insurance policies and phrases and circumstances of the SDK publishers, and failing to interact in audits or compliance opinions concerning 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 shoppers.

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 underneath the HBNR, and requires it to interact in varied actions designed to bolster its compliance program. Particularly, the Proposed Order contains the next prohibitions and necessities:

• Completely prohibits Straightforward Healthcare from sharing customers’ private well being knowledge with third events for promoting;
• Requires Straightforward Healthcare to acquire person consent earlier than sharing private well being knowledge with third events for different functions;
• Requires Straightforward Healthcare to retain customers’ private info for less than so long as crucial to meet 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 publish a shopper discover explaining the FTC’s allegations and the settlement; and
• Requires Straightforward Healthcare to implement complete safety and privateness applications that embrace sturdy safeguards to guard shopper knowledge.

Takeaways

As mentioned in a previous client alertthe FTC issued a policy statement in September 2021 to affirm that well being apps and related gadgets that accumulate or use shoppers’ 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 announced that it might be in search of touch upon proposed modifications 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 firms that share delicate reproductive health information 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 knowledge associated to reproductive well being care by means of a mix of legislation enforcement and coverage initiatives, together with a earlier FTC enforcement motion in opposition to Flo Health Inc.the developer of a fertility monitoring app, along with commitment from the FTC to guard shoppers from firms that misuse reproductive well being knowledge.

Digital well being firms and different organizations throughout the well being care trade ought to pay attention to latest enforcement actions, consider whether or not the HBNR applies to their enterprise, evaluation and replace insurance policies and compliance with FTC requirement, and proceed to observe FTC enforcement actions and different developments concerning the HBNR. That is notably vital 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.