IAPP CIPP-US Exam Questions

Federal preemption is a doctrine in law that allows a federal law to take precedence over or to displace a state law in certain matters of national importance (such as interstate commerce). The doctrine is based on the Supremacy Clause of the Constitution, which declares that federal law is the ''supreme law of the land'' and that state judges are bound by it. There are two types of federal preemption: express and implied. Express preemption occurs when Congress expressly states that a federal law is intended to preempt certain types of state legislation. Implied preemption occurs when a state law conflicts with federal law because it is impossible to comply with both at the same time, or because it interferes with the objectives of the federal law, or because the federal government has fully occupied the field of regulation.

The U.S. Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act is an example of express preemption. The Act regulates commercial email messages and establishes requirements for senders and penalties for violations. The Act also explicitly preempts any state law that ''expressly regulates the use of electronic mail to send commercial messages'', except for state laws that prohibit falsity or deception. This means that states cannot pass laws that impose greater obligations on senders of email marketing than the federal law, such as requiring opt-in consent or providing additional opt-out mechanisms. Therefore, the CAN-SPAM Act is the correct answer to the question.

The other options are not examples of federal preemption. The Payment Card Industry's (PCI) ability to self-regulate and enforce data security standards for payment card data is not a federal law, but a private sector initiative. The U.S. Federal Trade Commission's (FTC) ability to enforce against unfair and deceptive trade practices across sectors and industries is not a preemption of state law, but a concurrent power that can coexist with state consumer protection laws. The California Consumer Privacy Act (CCPA) regulating businesses that have no physical brick-and-mortal presence in California, but which do business there, is not preempted by any federal law, but is a state law that applies to entities that meet certain criteria of collecting or selling personal information of California residents.Reference:Federal preemption,What is Federal Preemption?,Federal preemption Definition & Meaning,preemption,Preemption legal definition of Preemption, CAN-SPAM Act, IAPP CIPP/US Study Guide, Chapter 2.

The CCPA applies to any business that collects personal information of California residents, regardless of where the business is located1.The CCPA defines personal information broadly as any information that identifies, relates to, describes, is reasonably capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household2.This could include business contact information, such as name, email address, phone number, or job title, if it is linked to a specific individual3.Therefore, Otto should tell the Board that business contact information could be considered personal information governed by CCPA, and that the company may need to comply with the CCPA requirements, such as providing notice, honoring consumer rights requests, and implementing reasonable security measures4.Reference:

CIPP/US Practice Questions (Sample Questions), Question 124, Answer C, Explanation C.

IAPP CIPP/US Certified Information Privacy Professional Study Guide, Chapter 6, Section 6.2, p. 181-182.

California Consumer Privacy Act (CCPA), Section 1798.140, Subsection (o).

CCPA Compliance Checklist for Businesses, Section 2, Subsection (a).

The Clarifying Lawful Overseas Use of Data (CLOUD) Act, enacted in 2018, updates the legal framework for federal law enforcement to access electronic data held by U.S. service providers, even when the data is stored outside the United States. The act resolves jurisdictional issues that arise in cross-border data requests and facilitates international cooperation for law enforcement purposes.

Key Provisions of the CLOUD Act:

Data Access for Law Enforcement:

The CLOUD Act allows U.S. federal law enforcement to compel U.S.-based service providers (e.g., Microsoft, Google) to provide access to data stored abroad using a valid warrant or subpoena, provided the request complies with applicable laws.

International Data Sharing Agreements:

The CLOUD Act enables the U.S. to establish bilateral agreements with other countries to streamline access to data for law enforcement purposes. These agreements ensure that U.S. and foreign law enforcement can access data without violating each other's sovereignty or privacy laws.

Conflict with Foreign Laws:

The act includes mechanisms for providers to challenge data requests that conflict with the laws of the country where the data is stored, providing safeguards for compliance with foreign privacy laws like the General Data Protection Regulation (GDPR).

Explanation of Options:

A. Codify a treaty with the EU that permits the cross-border transfer of personal information from the EU to the United States in compliance with the GDPR: This is incorrect. The CLOUD Act is not specific to the EU or GDPR compliance. Instead, it focuses on law enforcement access to data stored abroad.

B. Update the legal mechanisms through which federal law enforcement may obtain data that service providers maintain in a foreign country: This is correct. The CLOUD Act directly addresses law enforcement's ability to compel data access from U.S. providers, regardless of the data's physical location.

C. Establish baseline privacy obligations that U.S. companies must comply with for personal information, even if stored in a foreign country: This is incorrect. The CLOUD Act is focused on law enforcement access to data, not privacy obligations for companies.

D. Prohibit foreign companies from using the personal information of U.S. citizens without their consent: This is incorrect. The CLOUD Act does not regulate foreign companies or impose consent requirements for using personal information.

Reference from CIPP/US Materials:

CLOUD Act (18 U.S.C. 2713): Establishes legal mechanisms for cross-border data access and international agreements.

IAPP CIPP/US Certification Textbook: Discusses the CLOUD Act's impact on cross-border data requests and its interaction with global privacy laws.

When storing biometric data, such as fingerprints, organizations in the U.S. must comply with state-specific biometric privacy laws if they operate in states that regulate biometric information. The most prominent of these laws is the Illinois Biometric Information Privacy Act (BIPA), but similar laws also exist or are developing in other states, such as Texas and Washington.

Key Considerations for Storing Biometric Data:

Illinois Biometric Information Privacy Act (BIPA): BIPA (740 ILCS 14) is a leading and highly influential state law regulating the collection, storage, and use of biometric information. It requires organizations to:

Obtain informed, written consent before collecting biometric data.

Establish a publicly available policy governing the retention and destruction of biometric data.

Use a reasonable standard of care to protect biometric data from unauthorized access or use.

Prohibit the sale or transfer of biometric data without consent.

California and Biometric Data: While California's California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA) provide general protections for personal information, including biometric data, they do not have the specific consent and handling requirements that BIPA does. Nevertheless, California residents have rights related to access, deletion, and the sale of biometric information.

Explanation of Options:

A. The Privacy Rule of the HITECH Act: The HITECH Act applies to the protection of protected health information (PHI) under HIPAA. While the Privacy Rule regulates healthcare-related information, it does not apply to Jane's biometric data used for remote authentication unless it is tied to PHI. This scenario is unrelated to healthcare, so this answer is incorrect.

B. The California IoT Security Law (SB 327): California's IoT Security Law primarily focuses on ensuring security requirements for connected devices. It does not regulate the collection or storage of biometric information. This is not relevant to the question.

C. The applicable state law such as Illinois BIPA: This is correct. State biometric privacy laws, such as Illinois BIPA, explicitly govern the collection, storage, and use of biometric data like fingerprints. Organizations like Jones Labs must ensure compliance with such laws, including obtaining consent and properly securing and destroying biometric information.

D. The federal Genetic Information Nondiscrimination Act (GINA): GINA prohibits discrimination based on genetic information in employment and health insurance. However, it does not regulate the storage of biometric data like fingerprints. This is not applicable to this scenario.

Best Practices for Compliance:

Jones Labs should:

Understand the applicable state biometric laws: If Jane resides in Illinois or other states with biometric laws, Jones Labs must comply with those specific legal requirements.

Obtain informed consent: Ensure that employees like Jane sign a written consent form before storing their fingerprints for authentication.

Secure biometric data: Use strong encryption and other security measures to protect the biometric information.

Define retention and destruction policies: Clearly establish how long biometric data will be stored and how it will be destroyed after its purpose is fulfilled.

Reference from CIPP/US Materials:

Illinois Biometric Information Privacy Act (BIPA): Sets the standard for biometric privacy regulations in the U.S.

California Consumer Privacy Act (CCPA): Protects personal information but does not specifically regulate biometric data like fingerprints with the same rigor as BIPA.

IAPP CIPP/US Certification Textbook: Discusses the emergence of state-specific biometric privacy laws and their applicability in different scenarios.

Under the EU-US Data Privacy Framework (DPF), organizations that participate in the framework must provide individuals with a way to resolve complaints and disputes about how their personal data is handled. Specifically, organizations are required to offer an independent recourse mechanism to ensure compliance with the principles of the framework. This mechanism enables individuals to bring their complaints forward and have them addressed through an impartial and accessible process.

The independent recourse mechanism is critical to the DPF as it reinforces accountability and builds trust in cross-border data transfers. Organizations must select a third-party dispute resolution provider (such as an alternative dispute resolution body or a regulatory body) and disclose this mechanism in their privacy policies. The mechanism must be provided free of charge to the individual.

Explanation of Options:

A . An independent recourse mechanism: This is the correct answer, as it is explicitly required under the EU-US Data Privacy Framework for resolving disputes and complaints related to data privacy.

B . A copy of the individual's personal data: While data access rights are part of broader privacy regulations (e.g., GDPR), this is not specific to the EU-US DPF's requirements regarding complaint handling.

C . A description of the organization's data processing policies: While transparency about data processing is an important requirement under the DPF, it does not address the need for a formal dispute resolution mechanism.