On Could 17, 2023, the Federal Commerce Fee (“FTC”) introduced an enforcement motion (“Enforcement Motion”) in opposition to 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 cellular software referred to as the Premom Ovulation Tracker (“Premom”) that permits customers to enter and observe varied 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 knowledge with third events and didn’t 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 Simple Healthcare from sharing person private well being knowledge with third events for promoting, amongst different necessities. As a part of a associated motion, Simple Healthcare has agreed to pay an extra $100,000 to Connecticut, the District of Columbia, and Oregon for violating their respective legal guidelines.

The most recent 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 observe the practices of internet sites, apps, and related gadgets that seize client’s delicate well being info. The motion additionally indicators the FTC’s highlight on firms’ use of reproductive well being knowledge, significantly in menstrual cycle and fertility purposes, within the wake of the Dobbs v. Jackson Ladies’s Well being Group (“Dobbs”) determination.

The Criticism

Based on 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 could 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 deal with; and (3) the corporate would solely use such knowledge for its personal analytics or promoting. The FTC states that Simple Healthcare’s privateness insurance policies over time promised shoppers that it could notify and procure consent from customers earlier than utilizing its customers’ knowledge 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. Based on the Criticism, Simple Healthcare integrated into the Premom app software program improvement instruments, generally known as software program improvement kits (“SDKs”),  which allowed Simple 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 Simple Healthcare gave these firms (together with third-party advertising and analytics companies, a few of which have been international 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 Simple Healthcare didn’t implement cheap privateness and knowledge safety measures, together with failing to adequately assess the privateness dangers of third-party SDKs that have been integrated into Premom, failing to observe adjustments within the privateness insurance policies and phrases and situations of the SDK publishers, and failing to have interaction in audits or compliance evaluations concerning the information assortment and privateness practices of third-party publishers. The FTC additionally discovered that Simple Healthcare didn’t implement compliance with their very own privateness guarantees to shoppers.

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 underneath the HBNR, and requires it to have interaction in varied 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 knowledge with third events for promoting;
• Requires Simple Healthcare to acquire person consent earlier than sharing private well being knowledge with third events for different functions;
• Requires Simple Healthcare to retain customers’ private info for less than so long as vital 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 knowledge it has shared with third events;
• Requires Simple Healthcare to ship and submit a client discover explaining the FTC’s allegations and the settlement; and
• Requires Simple Healthcare to implement complete safety and privateness applications that embody sturdy safeguards to guard client knowledge.

Takeaways

As mentioned in a previous shopper alert, the FTC issued a coverage assertion in September 2021 to affirm that well being apps and related gadgets that gather 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 not too long ago introduced that it could be in search of touch upon proposed adjustments 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. Because the 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 Well being Inc., the developer of a fertility monitoring app, along with dedication 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 business ought to pay attention to current 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 significantly vital for firms that target girls’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.