FEDERAL TRADE COMMISSION: CYBER SECURITY ENFORCEMENT

The Federal Trade Commission has become the data security policeman for the United States. This is because the United States government. has not developed data security standards for most industries. The feds have put together data security laws for health records and for financial information. But, Congress has been very to slow to put together standards that would apply over all industries and businesses.

So, the Federal Trade Commission stepped in to fill the void. The Federal Trade Commission has aggressively brought enforcement actions against companies that have failed to reasonably protect the data of their customers.

The FTC took an act that was passed over a century ago, in 1914, and decided to apply it to cyber security issues. The FTC justifies its enforcement actions under Section 5 of the FTC Act. The FTC considers unreasonable data security breaches to be “unfair” trade practices.

Section 5 of the Federal Trade Act addresses illegal “unfair or deceptive acts or practices in or affecting commerce.”

The FTC has been so effective in its enforcement actions that most companies buckle and agree to consent degrees rather than litigation.