Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC offers testimony on data security and risk to consumers, (Apr 2, 2014)

By Linda O’Brien, J.D., LL.M.

In testimony before the Senate Committee on Homeland Security and Governmental Affairs today, the FTC provided an update on its efforts to protect consumers’ privacy in the face of growing data breaches and renewed its call for data security legislation.

Testifying on behalf of the Commission, Chairwoman Edith Ramirez began her prepared statement at the hearing on “Data Breach on the Rise: Protecting Personal Information From Harm” by stating that recent publicly-announced data breaches are reminders that hackers seek to exploit vulnerabilities, obtain unauthorized access to consumer information, and potentially misuse that information in ways that can cause serious harm to consumers and businesses. The more data breaches are revealed, the risk to consumers and businesses becomes clear.

The testimony highlighted the Commission’s wide-ranging efforts in the data security arena, including its enforcement of the FTC Act as well as specific statutes such as the Fair Credit Reporting Act, Children’s Online Privacy Protection Act, and the Gramm-Leach-Bliley Act to encourage companies to make data security a priority. The Commission has settled more than 50 cases alleging that companies took inadequate measures to protect consumer data. The testimony called attention to recent settlements with Fandango and Credit Karma as part of the FTC’s effort to encourage companies to adopt security in the design of their products.

Additionally, the testimony outlined the FTC’s policy initiatives related to data security issues, including workshops, seminars, and reports on a wide variety of topics that affect the collection, use, and security of consumers’ personal information. The testimony noted the Commission’s ongoing efforts to educate consumers and provide guidance to businesses about issues related to data security. The testimony also noted the FTC’s consumer website on basic computer security and business guide on data security. The FTC has also developed specific security guidance for mobile app developers.

In renewing its call for data security legislation, the testimony recommended that Congress strengthen its existing authority governing data security tools, and that it require companies in appropriate circumstances to notify consumers affected by a data breach. Specifically, the testimony called for authority to seek civil penalties to help deter unlawful conduct, rulemaking authority under the Administrative Procedures Act, and jurisdiction over non-profit entities, which are not currently subject to FTC oversight.

The Commission vote approving the testimony and its inclusion in the formal record was 4-0.

News: ConsumerProtection Privacy FederalTradeCommissionNews