Federal Trade Commission Can Sue for Data Breaches

In what can be considered a major victory for the government and Internet users a New Jersey Court has ruled the Federal Trade Commission can sue for data breaches. The decision went against Wyndham Worldwide Inc. owner of Wyndham Hotels.

U.S. District Court Judge Esther Salas ruled that the FTC can hold companies responsible for failing to use reasonable security practices. The lawsuit came after Wyndham suffered a data breach resulting in the loss of data for thousands of credit cards and $10.6 million in fraud losses.

Wyndham, trade groups and even the U.S. Chamber of Commerce challenged whether the FTC had the authority to enforce data security standards under the unfair and deceptive practices provisions of the FTC Act. The judge said; yes they do.

The ruling is  considered a landmark by legal experts. It was a test of the FTC’s authority to enforce the data security standards on U.S. companies. The FTC has has used its authority in the past to force settlements from companies that suffered data breaches.

Breaking It Down

We need to see more of this. Like most Americans, black people travel and use hotels and restaurants and we pay with our credit cards. No we are not the only ones affected, but we should be paying attention when we see this sort of activity. Americans have few places to turn to when data is lost. I am glad that the FTC is at least trying. We can’t get Congress to agree on the weather outside and getting a data security law passed is nowhere on the horizon. We should thank the judge for her ruling and the FTC for acting on these data breaches. Hopefully this is not an isolated event.