Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

FTC to Hold Workshop on Consumer Harm Suffered by Data Breaches

Author: Scarinci Hollenbeck, LLC

Date: October 24, 2017

Key Contacts

Back

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.

FTC To Hold Workshop On Consumer Harm Caused by Data Breaches
Photo courtesy of Joshua Sortino (Unsplash.com)

FTC Oversight of Data Breaches

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.”

Prior to the workshop, the FTC is soliciting feedback on the following questions:

  • 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.

    No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

    Scarinci Hollenbeck, LLC, LLC

    Related Posts

    See all
    Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know post image

    Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know

    For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]

    Author: George McGowan

    Link to post with title - "Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know"
    Estate Planning for Digital Assets Under New Jersey Law post image

    Estate Planning for Digital Assets Under New Jersey Law

    As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]

    Author: Marc J. Comer

    Link to post with title - "Estate Planning for Digital Assets Under New Jersey Law"
    The Role of Representation and Warranty Insurance in M&A Transactions post image

    The Role of Representation and Warranty Insurance in M&A Transactions

    In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]

    Author: George McGowan

    Link to post with title - "The Role of Representation and Warranty Insurance in M&A Transactions"
    You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What? post image

    You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?

    Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]

    Author: George McGowan

    Link to post with title - "You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?"
    Why Every Business Should Conduct an Annual Insurance Coverage Review post image

    Why Every Business Should Conduct an Annual Insurance Coverage Review

    Most New Jersey business owners purchase insurance policies, file them away, and assume they are protected if a claim arises. Without a regular insurance coverage review, many companies discover gaps only after a lawsuit, cyberattack, property loss, or other significant event occurs. An annual insurance coverage review can help businesses identify potential risks, ensure their […]

    Author: George McGowan

    Link to post with title - "Why Every Business Should Conduct an Annual Insurance Coverage Review"
    Demand Letters & Cease and Desist Letters: When to Send One (and When Not To) post image

    Demand Letters & Cease and Desist Letters: When to Send One (and When Not To)

    Businesses and individuals often encounter situations where another party breaches a contract, fails to pay a debt, or continues harmful conduct. In many such disputes, a precisely drafted demand letter or cease-and-desist letter serves as a powerful legal tool. It can frequently resolve the dispute and avoid litigation. While demand or cease-and-desist letters can resolve […]

    Author: George McGowan

    Link to post with title - "Demand Letters & Cease and Desist Letters: When to Send One (and When Not To)"

    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.

    Let`s get in touch!

    * The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.
    “If you would like to submit a file, please email it directly to info@sh-law.com.

    Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!