FTC Says Failure To Protect Private Info Is An Unfair Business Practice
from the out-come-the-fines dept
Earlier this week, we noted that the issue of companies leaking or exposing all sorts of private data was nothing new -- and wondered why it wasn't considered negligence. Apparently, that might be changing. The FTC today said that they had fined BJ's Wholesale Club for revealing private data and said very clearly that "inadequate data security can be an unfair business practice." It seems like they might have a lot of fines to give out these days, if the last few months of headlines concerning has been any indication. Of course, while the statement today says this is the "first time" inadequate data protection is being viewed as a potential unfair business practice by the FTC, that's not true. Last year, we wrote about the FTC fining Tower Records over a nearly identical issue. In that case, Tower's computer system had been hacked. Of course, this raises the inevitable question: at what point is the company liable? A determined hacker will find a way to break in to almost any system. Does it always make sense to blame the company for inadequately protecting the data? It seems like the FTC may face a very fine line here. There are some cases where companies are clearly negligent in protecting data, but in cases where the company is hacked, how does anyone determine if the company made a reasonable effort to protect the data or not?