FTC to Hold Workshop on Consumer Harm Suffered by Data Breaches
The Federal Trade Commission (FTC) recently announced that it plans to hold a workshop on informational injury in December 2017. Given that the consumer harm that results from cyber-attacks and data breaches significantly impacts businesses’ liability in government actions and private lawsuits, we are closely monitoring the FTC’s policies in this arena.
When launching a data security investigation, the FTC relies on Section 5(a) of the Federal Trade Commission Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce.” The statute broadly defines unfair practices as those that “cause or [are] likely to cause substantial injury to consumers…not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition.”
Under President Barak Obama, the FTC broadly interpreted its authority under the FTC Act to bring data breach enforcement actions. To date, the agency has brought more than 500 privacy and data security-related cases. Shortly after being appointed, Acting FTC Chairman, Maureen Ohlhausen, suggested that the agency may narrow its focus. In a speech, Ohlhausen stated that she intended to “work to ensure that our enforcement actions target behaviors causing concrete consumer harm and that remedies are tied to consumer harm.”
FTC Seeking to Define Consumer Injury
In the workshop, the FTC plans to address a range of issues related the injury consumers suffer when their information is improperly used or disclosed. The issues include “how to best characterize these injuries, how to accurately measure such injuries and their prevalence, and what factors businesses and consumers consider when evaluating the tradeoffs involved in collecting, using, or providing information while also potentially increasing their exposure to injuries.”
What are the qualitatively different types of injuries from privacy and data security incidents? What are some real-life examples of these types of informational injury to consumers and to businesses?
What frameworks might we use to assess these different injuries? How do we quantify injuries? How might frameworks treat past, current, and potential future outcomes in quantifying injury? How might frameworks differ for different types of injury?
How do businesses evaluate the benefits, costs, and risks of collecting and using information in light of potential injuries? How do they make tradeoffs? How do they assess the risks of different kinds of data breach? What market and legal incentives do they face, and how do these incentives affect their decisions?
How do consumers perceive and evaluate the benefits, costs, and risks of sharing information in light of potential injuries? What obstacles do they face in conducting such an evaluation? How do they evaluate tradeoffs?
Comments must be submitted to the FTC before October 27, 2017. The workshop will be held on December 12, 2017, in Washington, D.C. It will also be webcast on the FTC’s website.
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
FTC to Hold Workshop on Consumer Harm Suffered by Data Breaches
Author: Scarinci Hollenbeck, LLC
FTC to Hold Workshop on Consumer Harm Suffered by Data Breaches
The Federal Trade Commission (FTC) recently announced that it plans to hold a workshop on informational injury in December 2017. Given that the consumer harm that results from cyber-attacks and data breaches significantly impacts businesses’ liability in government actions and private lawsuits, we are closely monitoring the FTC’s policies in this arena.
When launching a data security investigation, the FTC relies on Section 5(a) of the Federal Trade Commission Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce.” The statute broadly defines unfair practices as those that “cause or [are] likely to cause substantial injury to consumers…not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition.”
Under President Barak Obama, the FTC broadly interpreted its authority under the FTC Act to bring data breach enforcement actions. To date, the agency has brought more than 500 privacy and data security-related cases. Shortly after being appointed, Acting FTC Chairman, Maureen Ohlhausen, suggested that the agency may narrow its focus. In a speech, Ohlhausen stated that she intended to “work to ensure that our enforcement actions target behaviors causing concrete consumer harm and that remedies are tied to consumer harm.”
FTC Seeking to Define Consumer Injury
In the workshop, the FTC plans to address a range of issues related the injury consumers suffer when their information is improperly used or disclosed. The issues include “how to best characterize these injuries, how to accurately measure such injuries and their prevalence, and what factors businesses and consumers consider when evaluating the tradeoffs involved in collecting, using, or providing information while also potentially increasing their exposure to injuries.”
What are the qualitatively different types of injuries from privacy and data security incidents? What are some real-life examples of these types of informational injury to consumers and to businesses?
What frameworks might we use to assess these different injuries? How do we quantify injuries? How might frameworks treat past, current, and potential future outcomes in quantifying injury? How might frameworks differ for different types of injury?
How do businesses evaluate the benefits, costs, and risks of collecting and using information in light of potential injuries? How do they make tradeoffs? How do they assess the risks of different kinds of data breach? What market and legal incentives do they face, and how do these incentives affect their decisions?
How do consumers perceive and evaluate the benefits, costs, and risks of sharing information in light of potential injuries? What obstacles do they face in conducting such an evaluation? How do they evaluate tradeoffs?
Comments must be submitted to the FTC before October 27, 2017. The workshop will be held on December 12, 2017, in Washington, D.C. It will also be webcast on the FTC’s website.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
