The Cost of Internal Investigations
Anti-Bribery and Anti-Corruption, Business Ethics and Corporate Culture, Other

Investigations by the Justice Department (DOJ) or Securities and Exchange Commission (SEC) can cost corporations an enormous amount of money, even when those investigations are largely conducted by the corporation itself. For example, Avon Products has been the subject of an investigation since 2008 over possible violations of the Foreign Corrupt Practices Act (FCPA). The legal fees and outside counsel costs of the internal investigation related to these matters cost the company $59 million in 2009 and $95 million in 2010. The investigation is still underway and could cost the company upwards of $250 million before it is closed. Both the DOJ and SEC rely heavily on the results of internal investigations, and where companies can show that they have conducted their own thorough investigations, it increases the likelihood of reaching a favorable resolution. However, even a favorable resolution could result in large penalties and costs to the company. FCPA investigations also often lead to lawsuits from shareholders that, while rarely successful, again require retaining outside counsel and paying large legal fees.
New York Times: The High Price of Internal Inquiries (6 May 2011)
(Source: New York Times)

New Privacy Rules Issued in India
Privacy and Data Protection

Late last month, India issued new privacy rules that will significantly limit how companies handle personal information. The rules require that companies inform customers when their personal information is being collected by letter, fax, or email. Also included in the rules are provisions that require companies to make their privacy policies available to customers, to properly secure customer information, and to offer a dispute resolution process for issues arising from the collection of personal information. The new rules will apply to any personal information collected in India and any information that is collected outside of India and then transferred into the country. The rules will likely have a significant impact on outsourcing providers in India that will need to inform each customer of their data privacy policies.
Information Week: India Apodts New Privacy Rules (5 May 2011)
(Source: Information Week)

Sony Data Breach Warning
Privacy and Data Protection

Privacy Commissioner Timothy Pilgrim has announced that he will be opening his own motion investigation into the Sony Online Entertainment (SOE) data breach, after SOE advised that hackers may have obtained information stored on an outdated database, being “approximately 12,700 non-US customer credit or debit card numbers and expiration dates”. Mr Pilgrim has reiterated the importance of organisations “further limiting the amount of information they collect and store about people” and “[making] sure that information is destroyed when it is no longer needed as is required under the [Privacy Act 1988 No. 119 (Cth)]“.
Privacy Commissioner’s media release (4 May 2011)
(Source: Privacy Commissioner; Lawlex Legislative Alert & Premium Research)

Update on Search Engine Data Retention
Privacy and Data Protection

The Commission nationale de l’informatique et des libertés (CNIL) has reiterated its contention that search engines should not retain users’ data for longer than six months, unless specific consent has been given. The CNIL is particularly concerned that Yahoo has lately decided to store data for 18 months, in contradistinction to rival firms’ promises to reduce retention periods and against the EC Article 29 Data Protection Working Party’s Opinion 1/2008 on data protection issues related to search engines (4 April 2008).
CNIL’s media release (9 May 2011 – French language version available only)
(Source: CNIL; EC)

Court Finds Google in Breach of Copyright
Business Ethics and Corporate Culture, Other

PCWorld reports that the Belgian Court of Appeals has ruled that Google breaches copyrights of Belgian newspapers “by placing links to and portions of their articles on Google News”, the latest in a series of lawsuits that began in 2006. Google is reportedly required to remove all material from all Belgian newspapers in French and German, and will face a €25,000 for every day it fails to implement the judgment. Commercial copyright watchdog for the Walloon region of Belgium Copiepresse has reportedly claimed that Google News should pay affected newspapers for publishing their content. Reportedly, Google insists it has not breached any copyright law as “it only placed a link and a short introduction to the articles on Google News, as is common on the Internet”, which in fact encourages users to visit the newspapers’ websites. 
PCWorld: Google Busted for Copyright Violation in Belgium (8 May 2011)
(Source: PCWorld)