With cyber breaches being one of the newest threats to companies and consumers, it is not surprising that the powers that be are pushing for change. A recent court ruling gave the Federal Trade Commission more power to hold companies accountable for lacking cybersecurity. While many think this is a step in the right direction, some are wondering if the FTC's new authority may mean more lawsuits.
The decision to allow the FTC to handle cybersecurity matters comes after a lawsuit brought on by the FTC against a hotel chain. A breach of the hotel chain's cybersecurity resulted in millions of dollars in fraudulent charges on consumer credit cards. The court ruled in favor of the FTC which lead to a decision to give the commission free range in determining what is and is not 'fair' trade practice.
The FTC's newfound power alone is not likely enough to lead to an increase in lawsuits against companies. However, unlike credit card companies, many companies don't have solid regulations to follow when it comes to cybersecurity. It's this lack of regulation that has many worried the FTC will have so much leeway when deciding who is responsible that everyone will be.
Like credit card companies, other companies in health care and finance, as well as a few other areas, have regulations on cybersecurity. The concern over the FTC's reach is mainly for commercial companies. While it is unknown if more stringent regulations will be put in place for commercial companies, you can bet the FTC's new power has decision makers scrambling.
For business owners, adequate cybersecurity has never been more important. With the FTC's reach extending further into the business world, protecting your consumers is in your best interest. If you have concerns about your consumers' protection or your business's obligations, speaking to a trusted attorney may help.
Source: Pittsburgh Post-Gazette, "FTC ruling will lead to more cybersecurity suits, lawyers say," P.J. D'Annunzio, Sept. 15, 2015