Appeals Court Affirms FTC Authority Over Corporate Data-Security Practices

August 24, 2015 – In The News
The Wall Street Journal

Scott L. Vernick was quoted in The Wall Street Journal article, “Appeals Court Affirms FTC Authority Over Corporate Data-Security Practices.” Full text can be found in the August 24, 2015, issue, but a synopsis is below.

On Monday, the U.S. Court of Appeals for the Third Circuit ruled that the Federal Trade Commission (FTC) could move forward with a lawsuit against Wyndham Worldwide Corp., alleging the hotel chain is partially responsible for three breaches in which more than 600,000 credit- and debit-card numbers were stolen by hackers.

In a time where Congress has yet to pass comprehensive data security legislation, the FTC has sought to fill the void. While most of the FTC’s prior actions have resulted in settlements, Wyndham chose to contest the claims made by the agency.

Monday’s ruling was a “watershed event” that solidified the FTC’s position as a cybersecurity cop, said Scott Vernick, a noted privacy attorney. But “companies acting in this space already have factored in that the FTC is here to stay,” he added.

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